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Nearly Half of Canadians interested in selling homes privately

Nearly half of Canadians interested in selling homes privately, says poll
By Ross Marowits, The Canadian Press

MONTREAL - Nearly half of Canadians would consider selling their homes privately but very few are aware of changes implemented several months ago that make that task easier, a new survey suggests.

While 45 per cent of Canadians would consider bypassing realtors to sell privately with the advice of a real estate lawyer, only 11 per cent were aware of and understood changes to getting on the Multiple Listing Service , according to an Environics poll sponsored by the TitlePlus program.

"What these findings show us is that there is an appetite among Canadians to conduct the sale of their home privately," says TitlePlus vice-president Ray Leclair.

TitlePlus title insurance is offered by Lawyers' Professional Indemnity Co. as protection for title matters, survey, fraud, other legal issues and legal services provided by the real estate lawyer when you buy your home. In Quebec, it doesn't offer coverage for notary work. Coverage is for professional liability or title insurance but not both.

Even though its product is available for homes sold by realtors, Leclair said it is concerned that people won't do their homework as the interest in private sales grows.

Real Estate agents have historically sold most homes in Canada. But new rules agreed to in October make it easier for homeowners to use a real estate agent only to get their property listed on Canada's premier real estate portal without paying for a full package of realtor services.

The change was made after Canada's competition bureau argued that the old rules stifled competition and raised the price of selling a home.

The Canadian Real Estate Association doesn't tabulate how many more private sale listings have been added in the past few months, but it doubts the easier access will dramatically divert business away from its trained agents.

"I suspect that people really still want to rely on a professional and they want to rely on the resources that a realtor brings to the table," Wayne Moen, the incoming president of CREA said from Edmonton.

The Internet, cellphones and a more hands-on approach by younger consumers are changing the industry. But he said realtors offer clients valuable experience in negotiating, marketing and access to data to establish the best price and expose the property to the most sellers.

Some realtors fear increasing private sales will impact their livelihoods by reducing commissions. But Moen said he believes any change will take time and not be dramatic.

"Your home is a greater and greater part of personal net worth and I just don't think people are willing generally to roll the dice and do it on their own. There are just too many factors involved and too many things that could go wrong."

Realtors currently operate on the principle that selling agents will split the standard five per cent commission with the buyer's agent. Yuval Fish, an advocate for private home sales, hopes flat fee MLS listings will encourage more Canadians to sell their properties on their own.

"I'm pretty sure that there's going to be a huge increase in the amount of people who would want to try it and see if they can try and do it themselves," said the spokesman for PropertySold.ca, an alternative listing service that also provides advice on selling homes privately.

Getting on the MLS requires the participation of a realtor or broker licensed to practice within the province where the property is being sold. It's simple and can cost as little as $109.

But selling a home privately takes more than just pegging a sign on the front lawn. It requires time, perseverance and a knack for selling.

"There's a lot of people who don't know how to negotiate. They are intimidated when somebody calls in and wants to see the home. Those are the kind of people who probably need assistance," Fish said.

For thousands of others, it�™s a doable proposition even though just 25 per cent are successful, he said. The key is obtaining exposure, pricing appropriately and knowing your market.

Fish suggests sellers list on as many websites as possible including the MLS, hire a good real estate lawyer and avoid overpricing.

Don't be afraid to seek help by hiring experts to conduct an appraisal, title search and competitive market analysis, he adds. Most sellers will have to fork over up to about $1,500 including the listing and advertising, but can save thousands in the process.

The average Canadian home sells for $340,000, which would attract a commission of $17,000.

While sellers would ideally like to avoid all commissions, offering a commission or fee to buyers�™ agents could increase traffic by providing an incentive to reluctant realtors, Fish said.

Most agents won't agree to show the home to their clients if they have no skin in the game. Others may not even notice private sales because they refer to an internal MLS system that doesn't include private listings.

Ross Marowitz, The Canadian Press
Friday, June 03, 2011

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