dealing with buyer's agents
Although about 50% of our mere posting MLS® System listings sell directly to the buyer without any buyer's agents involved, preparing yourself to negotiate and interact with buyer's agents is a very important element of a successful private sale.
We have included this information to help you better understand exactly what your role in the sale of your property is, and what the basic rules are when it comes to working with buyer's agents.
As a Private Seller, you Take on the Role of the Listing Agent
Becoming the Vendor and the Salesperson.
When you sell your home you take on two roles. First as the seller, you become what is called the Vendor. Just like any other vendor, you must keep your shop/home in order during the sale. Appearing organized and at ease will go a long way in providing for a better experience with your buyers when they come to check out your home.
Your second role is that of salesperson. As the salesperson and the home owner, you already know pretty much everything there is to know about the property. And if you think about it - there is probably no one better to show your property to prospective buyers than you anyway, so create a positive vibe and have a bit of fun while you do it!Click to Expand
Interacting directly with buyers is one of the things many of our customers really enjoyed throughout the process of selling their own home. The truth is - using a traditional full service real estate agent actually puts up a BIG barrier right between you and your buyers, while the agents do the negotiating. With our system, you talk directly to the buyers without the high-priced middle men/women in the way, allowing you and the buyer to work out a deal that's right - for both of you.
And when the sale gets serious and it comes to writing up an offer with a buyer, both parties can easily be protected with simple clauses in the contract that indicate that the offer is subject to the approval of both parties' lawyers.
So when it comes right down to it, who should you trust to show your most valuable asset to prospective buyers? The point here is that selling your property For Sale By Owner doesn't have to be super complicated. Being prepared and friendly during the process will set you off on the right foot, and dramatically increase your chances of a successful sale.
Common Things Agents May Tell You to Try to Get You to List with Them
The bottom line is - agents don't really want you to be successful...
Let's face it, successful private sellers is the last thing the Real Estate industry wants, and there are many stakeholders whose commissions are lost every time a Canadian home owner chooses not to list their property with a real estate agent in Canada.
The key word in the above statement is "list". When you choose not to "list" your home with an agent, you take control of the process, and the agents no longer have it.
Because of this, there is a very good chance that you will be contacted by agents who will try their best to cast doubt on your chances of success, hoping that you will change your mind and list with them - after telling you all about the scary pitfalls of selling on your own.Click to Expand
There is an ongoing aggressive marketing campaign throughout Canada, whose prime objective is to instill fear in homeowners about what can happen when you dare to try and sell your own home without their assistance.
There's a lot of money at stake here - and selling systems like ours are helping an ever growing number of sellers tap directly into their portion of those "new found" commission savings.
This is why many agents will tell private sellers that our system doesn't work, or that there are many disadvantages when listing through a flat fee program like the one For Sale By Owner Inc. offers. The truth is that most of our sellers simply want to have their property shown on the REALTOR.ca website, AND the Local Real Estate Board, and there is NO difference in how our listings show up there.
So if you are like the vast majority of our customers, and you want to get listed on REALTOR.ca via your actual Local Real Estate Board, we can help you as long as your property is located in one of the provinces we offer the service in - currently throughout Alberta, BC, Saskatchewan, Manitoba, Ontario, New Brunswick, and Nova Scotia.
The Truth About Mere Postings in Canada
The act of selling your property For Sale By Owner has been made much easier by a few different key factors.
The first and most important factor is technology. Technology is now providing sellers with many of the tools they need to successfully sell their own home. From websites (like ForSaleByOwner.ca) that market the home, to the computers, smart phones, hand-held tablets, social media sites, email and text alerts that buyers now use to access the listings and easily connect with the sellers, technology alone is the major reason why so many people are able to now consider selling on their own.
The second major factor is that back in 2010, following negotiations with the Federal Competition Bureau, the real estate industry made it possible for private sellers to utilize the power of the MLS® System by allowing access to the various local Real Estate Board's MLS® System, and the national Canadian website at www.MLS.ca, and its successor, www.REALTOR.ca, through a Mere Posting.Click to Expand
A Mere Posting is defined, by the Canadian Real Estate Association (CREA) as "A listing on an MLS® System in respect of which the Member (Broker or REALTOR®) has chosen or agreed not to provide services to the Seller, other than submitting the listing for posting on the Member's Board's MLS® System." Many years later, companies are now offering discounted and flat fee listing services, and there are more options than ever before for sellers to get their property listed on the REALTOR.ca website.
For Sale By Owner Inc. has been offering flat fee REALTOR.ca posting services since 2013, working with thousands of sellers and fine tuning our selling system. The system we have today is the result of many months of continuous feedback from customers, and it is superior at generating sales leads for sellers than ever before.
Now this year, our Flat Fee Selling System is by far the best priced alternative to the traditional "old-school" and very costly full service real estate service providers throughout Canada, with more and more sellers using our website to sell their property without the assistance of an agent each month.
How Your Property Appears on REALTOR.ca
As mentioned above, most of our sellers simply want to have their property shown on the REALTOR.ca website, and there is very little difference in how our listings show up there.
The main difference is that our listings contain a statement in the description that lets buyers know that there is more information about the listing if they follow any of the specified links on the REALTOR.ca listing page.
We include this statement because the REALTOR.ca rules dictate that we cannot show the seller's contact information on the REALTOR.ca listing page, and the goal is to get the buyers to click on these buttons so that they can contact you directly, and learn all about your property with the simple click of a button.Click to Expand
All of the buttons mentioned in the statement takes buyers to your ForSaleByOwner.ca listing where they can find your name and contact information, view all of your photos, read your full property description, view a video or audio voice over if you've loaded one to our system, view your open house schedule, and see the full property specs, including room dimensions if you've taken the time to provide them.
This is why our system works so well, and it is the main reason that so many of our properties sell directly to the buyer without any buyer's agents involved, saving our customers thousands more on about half of the sales our system generates each month!
You can view detailed screenshots of how this works by viewing our "How FSBO & REALTOR.ca are Linked Together" page.
REALTOR.ca - Stats and Information About the Website
More Traffic, More Leads, More Sales.
According to the 2019 REALTOR.ca Insights Report, the REALTOR.ca website received:
- 50 million REALTOR.ca visitors
- 291 million REALTOR.ca total visits
- 983 million property views (an average of 112,000 property views per hour!)
- $166 billion average total value of REALTOR.ca listings at any given time
- 303,000 listings on REALTOR.ca at any given time
- 92% residential leads
- 8% commercial leads
This astonishing traffic is made up of agents using the website to locate available properties, and more importantly, the general public while in the process of buying or selling a property.
This is the main reason why our customers want to get on the REALTOR.ca website, and our Flat Fee Selling System allows you to leverage that enormous traffic by putting your property in front of the millions of people who visit REALTOR.ca looking for a home or business to purchase.
Our flat fee postings appear on REALTOR.ca exactly like all other full service real estate agent postings, with the main difference being that a link to our seller's name and contact number is actually available to the buyers on our custom broker landing pages, rather than just the typical listing Broker/Agent contact info found on the full service agent listings that appear on the site.
Our flat fee postings are also directly connected to your ForSaleByOwner.ca listing, where buyers who found your listing on REALTOR.ca are given even more information, including open house schedules, printable brochures, more pictures, video, audio, and a link to your own website if you have created one for the sale of your home.
This gives our sellers the added advantage of attracting a buyer direct, who has not already chosen to work with a buyer's agent. This translates into more sales occurring directly between buyers and sellers, putting thousands of dollars back in the pockets of sellers, right where it belongs.
Our system also provides buyers with a "Street View" Google mapping function that allows them to view most of our customers' properties, and the surrounding neighborhood, as if they were standing out in the street, right in front of the home. It's a great feature that gives buyers a real feel for your property, and the surrounding neighborhood and community.
Negotiating with Buyer's Agents
What should you do if you are contacted by a Buyer's agent? Here are a few things to consider:
The number one thing you need to know is that there are NO posted minimum or maximum percentages for commissions payable to agents throughout Canada - period. How much a seller pays an agent to sell their home is completely up to the seller. There are however, known commission rates that are typically paid to them, and they vary from province to province. Simply put, you are in control of the negotiations when it comes to what you are willing to pay to an agent, if you are approached by one who claims to have a buyer for your property. Armed with this knowledge, here are a few more points to consider.
A) Set the maximum commission or finder's fee you are willing to pay to a buyer's agent who contacts you with a potential buyer.Click to Expand
The value that an "agent with a buyer" has to each individual seller is based on several factors. Many sellers see the value in an agent who is bringing the buyer, and are willing to pay up to about "half" of what the normal commission would have been, if they had listed the property with a full service agent. Since there are no actual commission "rates" for selling real estate in Canada, it is completely up to each individual seller to decide how much value an agent has to them, if that agent has a buyer who wants to, and will, complete the purchase of their property. The key thing to remember here, is that YOU are in complete control of the negotiations, and that YOU alone decide what commission, if any, you are willing to pay.
Most buyer agents will insist on pre-determining what the commission will be if a sale to their client is completed. This is actually better for you, because you don't want any surprises from the buyer's agent regarding what their expectations are commission-wise after the property has been shown.
If a buyer's agent presents you with a contract, make sure it identifies the buyer by their first and last names, and exactly what the commission agreed upon is, expressed by a percentage, or a specific dollar amount. On this note, if any buyer tries to negotiate with you behind the back of the buyer's agent who introduced you to the seller, and you have signed an agreement with the buyer's agent, you will still be responsible to pay the agreed upon commission to the buyer's agent if that specific buyer(s) completes the sale behind the back of the agent.
B) Sign only for that one client or a specific time period.
Do not sign a contract that links you to a buyer's agent for the entire time your home is listed. Sign only if the contract stipulates that the contract is based on this one potential buyer (the buyer's names must be included in the contract).
You can also agree to sign a contract that stipulates that the buyer's agent has a set period of time (usually 48 - 72 hours) to bring you a buyer, or the contract is null and void. That way, you are only committed to that buyer's agent for the length of time you agreed to.
C) Ask lots of questions.
When you are selling without an agent, you should have a list of questions that you will ask potential buyers to ensure that they are serious about buying a property. The same should apply when speaking with a buyer's agent.
Questions like - Has the client been pre-approved for a mortgage? Do they have to sell their existing home before buying another one? Are they familiar with the area? How long have they been looking for a property with that buyer's agent?
Asking these questions will help you to determine how much effort the buyer's agent has put into working with the buyer(s), and you can use this information to quickly assess how much commission you need to offer the buyer's agent to get them to show your home to their buyer(s).
D) The sale.
In the case where there is a buyer's agent involved in the sale, once you and the buyer's agent have come to an acceptable agreement, the buyer will make an offer through the buyer's agent, which he/she will present to you. At this point, you can counter or accept the offer. Regardless of whether you accept the offer or counter it, make sure that you have included a clause that stipulates that your lawyer must approve the offer, as a condition of accepting it fully. Typical wording for this can be as follows: "This offer is subject to the seller's lawyer's approval within 48-72 hours of the time of the offer".
In order to complete the sale of your property, you may need to provide your buyer with a sales contract that is acceptable for your province. We have supplied the sales contracts in select provinces, namely AB, BC, MB, NB, NL, NS, ON, PE, & SK. Some buyers will come prepared with their own paperwork and sales contract, and some buyers will come with a buyer's agent.
Whether or not there is a buyer's agent involved in the sale, once you have worked out the sales agreement with the buyer directly, or the buyer's agent, your next move is to get it to your lawyer without delay so your lawyer and the buyer's lawyer can work out the details, and move the sale forward in a timely and professional manner.
commissions - tips & Information
Here are tips about real estate commissions you may want to give some serious thought to.
When you are selling your property privately, the total commission you would "normally" pay to a full service real estate agent is about $17,500 on a $400,000 property.
This amount is calculated using the formula of 7% payable on the first $100,000 of the sale price, and 3.5% on the balance of the selling price - which is $300,000 in this example. So the total commission is $7,000 on the first $100,000, and $10,500 ($300,000 x 3.5% = $10,500) on the remaining $300,000 for a total of $17,500 commission payable by you, the property owner.
Don't forget, you also have to pay sales tax on real estate commissions, so you will have to pay $875 if you're selling in Alberta, right up to $2,275 in tax for Ontario's taxation on commissions - for a grand total of between $18,375 to $19,775 in fees to sell a $400,000 property.Click to Expand
With our selling system, there is about a 50/50 chance that you will be dealing directly with a buyer who has contacted you about your property without the assistance of an agent, which means you will be paying ZERO commissions. This scenario allows you to use an even greater portion of the commission savings in your price negotiations with the buyer(s), which can be very helpful in completing your deal.
Some sellers who are creative in their sales approach even use a portion of these commission savings as incentive for the buyer to contact them directly, by offering "cash back at closing" or similar savings, to any buyer who completes the purchase of the property without a buyer's agent. Our system has a special place where sellers can indicate what level of cooperation they are willing to extend to agents in the "Buyer Agent Friendly" settings. Many of our sellers use this space to let buyers know that they are willing to provide cash back at closing, or other pricing incentives to encourage the buyers to deal directly with them.
And now, with the increase in the use of the Internet and technology to find a property, there is a growing trend among buyers to use a friend, a friend of a friend, a business associate, or a family member who is a real estate agent to represent them once they have found the home they are looking for on sites like REALTOR.ca and ForSaleByOwner.ca.
You can reduce the chances of this happening to your sale by letting buyers know right upfront that they will benefit financially, instead of an agent, if they contact you directly.
There are no rules in private sales that dictate what you as the seller can do, or can't do, when it comes to providing incentive to a buyer. Be creative, think outside of the box, and keep in mind that buyers who are looking for a property on their own are often expecting some kind of reward for working out the purchase with you, without the help of a buyer's agent. So don't be afraid to share in the savings - your buyers will love you for it, and everybody wins!
don't give up
The biggest obstacle private sellers face is "losing their confidence". This can happen after listening to the horror stories many agents will throw at them, and this is exactly what the industry wants to happen to you.
Remember, the face of Real Estate has changed in the age of computers and the Internet, and you now have a very good chance of selling your own property with the assistance of technology, and websites like ForSaleByOwner.ca and REALTOR.ca.
If you ever need a boost in your confidence level during the sale cycle, or if an agent has told you something that you would like clarification on, please feel free to contact us on our toll-free number anytime at 1-800-831-3726 extension 101.
Thank you for taking the time to read this important information, and good luck with the sale of your property!
See what you can save when you sell through us.
See what you can save when you sell through us.
ENTER SELLING PRICE
(Based on 6% on first $100,000 and 3% on balance)