Selling quandary, Do you hire an agent ..... or do the deal on your own?
Be prepared to pay when hiring an agent
Linda Mondoux, The Ottawa Citizen, October 20, 2007
Everywhere you turn, the talk is about buying or selling property. It’s hard to watch TV without seeing someone flipping a house for huge profits or raking in megabucks as a real estate agent to the rich. And it seems postcards offering a free home appraisal arrive in your mail box on a weekly basis.
What do you do? If you’re thinking about selling, you’d better act quick. According to the Canadian Real Estate Association, home sales activity is well on its way to reaching record levels this year, with 8.1 per cent more houses forecast to be sold through the Multiple Listing Service.
And prices, it says are also expected to reach records – 10.4 per cent higher across the country.
Prices vary across Canada, as they do across cities and across neighbourhoods, where location rules. Which is why moving a house from Kanata to Westboro could add $200,000 to its value.
According to the national association, the average price for a residential home listed on MLS in 2007 is forecast to be $305,900, with the highest price in British Columbia at $429,700. In Ontario, the prices are forecast to rise to $302,300, jumping to $316,700 in 2008.
Not only is your home the biggest investment you will likely ever make – or, as in the case of the financial Duddy Kravitz, who was obsessed with the maxim “A man without land is nobody,” the investment you dream about – what you do with it can have a major effect on the Canadian economy.
According to a study prepared for the Canadian Real Estate Association by Altus Clayton, the resale housing industry generated 158,000 jobs in Canada and injected an average of $15.3 billion annually into the economy between 2004 and 2006. That’s because every time a house is sol, there is a buying spree – from new furniture and appliances to hiring efficient movers.
An average of $34,200 in additional consumer spending was generated each time a house sold, according to the report. That’s up from $24,697 in the previous two-year period.
Selling houses is serious business. And whether you choose to sell your home yourself or hire the services of a real estate agent, you need to do your homework. But where to start?
It has been estimated between 70 and 80 per cent of people looking to buy a home first turn to the Internet. “The Internet is the most wonderful thing that happened in real estate,” says veteran real estate agent Lynn Forrest.
The most popular website is mls.ca, where real estate agents market their clients’ properties. Online since 1996, the site receives an average of three million unique visitors each month, according to the Canadian Real Estate Association. The Internet has opened up a universe of research options that benefit buyer and seller.
Include a link to a virtual tour of the home of your dreams. You watch as the cameral moves through the house, showing you every nook and cranny. Some sites offer tips on how to prepare a house for viewing. Other offer mortgage calculators.
In Ottawa, people looking to buy are also stopping by the website of Grapevine Home Marketing Consultants to see what’s for sale by owner. Grapevine, one of several home marketing companies, has been assisting owners to sell their homes since 1990, going online with listings in 1996.
While the number of homes sold privately is only a fraction of sales generated through the Multiple Listing Service – the number of homes sold through Grapevine in 2006 was 1,390, about the same as what sold on MLS in a month – more people are choosing to go it alone.
Lorraine Brownrigg, the owner of Grapevine, says listings are up 20 per cent in 2007.
“Primarily, people want to save the commission, says Ms. Brownrigg. “They also like to have control over appointments – so there are no surprise viewings”.
Grapevine offers several packages, with the most popular being the “Sign and Internet” at $295. With that, clients get a For Sale sign on their lawn and an Internet listing on the Grapevine site. Sellers also receive downloadable material, including a home market manual and negotiation worksheets.
For the not-so-brave, you can pay $695 for the premium package, what Ms. Brownrigg calls the “prep work” that a real estate agent would do before listing a home for sale. The package includes an in-home consultation with a professional broker and a market evaluation using MLS comparables to arrive at a selling price.
Reaction to Grapevine by agents has been mixed. But Ms. Brownrigg says most agents are willing to work with the by-owner sellers. For example, if an agent’s client wanted to put an offer on a Grapevine home, the agent would negotiate a commission with the seller – usually 2.5 per cent, which is half of what is typically paid when both buyer and seller have an agent.
Ms. Browrigg, who said 66 per cent of homes listed with Grapevine in 2006 were sold, says selling privately is definitely not for everyone, because the seller is basically “on their own.” Some people have the time and knowledge to do it themselves, but many don’t.
It’s the wealth of expertise and services that a professional agent can offer that the real estate industry has been pushing through its current TV advertising campaign, and that Diane Hatfield, president of the Ottawa Real Estate Board, emphasizes every chance she gets.
She rates the move to an ever-increasing level of professionalism as the single most important trend in the real estate industry during the past decade.
“It’s time people realized that realtors are a very professional group,” she says. “They are highly educated and required to take credits to renew their license every two years. They are also highly regulated. The days when it seemed that anybody could sell real estate are gone.”
Brian Vo could have used the knowledge of a professional when he recently tried to sell his Westboro home. A neighbour down the street had just sold his home in a few days with the help of Grapevine. So Mr. Vo decided to follow suit. But it didn’t take long before the price had to be reduced – from $599,000 to $529,000 – because he found his location, across from a funeral home, was a negative for many people.
“I had a few agents call with clients, but when they heard where it was, the viewings were cancelled,” he said, adding that he had no idea that a funeral home was considered bad luck.
Penny Torontow, a sales agent with Keller Williams Solid Rock Realty, says pricing is often a problem with by-owner sales.
“More often, the sellers are trying to save a buck, so they often will price it too high,” she says. “Then you have the buyer looking for a deal, so there’s a big gap between the seller and the buyer. That’s where we come in.”
She agrees consumers today are move savvy, thanks to the Internet and the plethora of TV shows on house selling. But the result, she says, is that some “think they can do what the professionals do.”
For the professionals – the real estate agents – that means “you have to make yourself valuable.” And for many agents, that means offering more sophisticated services, such as virtual tours and hiring decorators and stagers to help homeowners prepare their house for sale.
Ms. Forrest, who teams up with her husband, John, at Royal LePage, has been staging homes for the past five years. Her clients receive a free consultation from a decorator, who will suggest fix-ups such as a fresh coat of paint, and even some new furniture. She keeps spare furniture and artwork in her basement she will lend to clients in need of a mini home makeover.
“We try to make our homes as buyer-friendly as possible.”
While people are selling their own homes might have learned a trick or two about staging from TV, Ms. Forrest says it’s the knowledge and advice professionals provide through the sales process – from negotiating to the all-important home inspection – that makes agents so valuable. “If you’re selling your own home and the wiring is no good, we know how to rectify the situation.”
And that’s why, Mr. Forrest says, “there will always be a need for realtors”. |
