Saverio Manzo and Rosalie Jones are sold on selling their own homes privately — as long as they get some hand-holding from a pro.
Not a good idea, argues Alan, a retired teacher who asked to remain anonymous. He tried to go it alone, called in an agent mid-process, and says he got an extra $100,000 as a result.
Ever since the Competition Bureau forced the Canadian Real Estate Association to ease access to its Multiple Listing Service in 2010, many homeowners are trying to bypass agents or save on commissions.
The alternate options have multiplied, the results vary, and the evolution is ongoing.
Companies such as Property Guys and ComFree are booming, but if you think real estate agents are endangered, think again. Toronto Real Estate Board membership is 34,000, up 30 per cent in five years.
Andre Zupancic, broker of record at Sutton Group Icon Realty, is one agent who embraced change. He still does traditional work, but is also a principal behind ByOwnerSale.ca.
“We’re a private, for-sale-by-owner company,” he says. “The difference is, we have realtors involved in the process.”
ByOwnerSale.ca, which handled 166 deals in the GTA last year, satisfied Manzo and Jones, even though they paid commissions on their recent sales: 2.5 and 1.49 per cent, respectively.
“It’s not for everyone, but I put in 30 or 40 hours and saved $18,000,” says Manzo, a small-business management consultant, who is renting a downtown condo with his girlfriend and will likely buy again soon.
He spoke with three firms before picking ByOwnerSale.ca. His Leaside bungalow was listed on MLS for a flat fee of $99, and he opted to pay a half-per-cent commission for help, beginning with listing-price advice and culminating in a nine-party bidding war eight days later. He also paid 2 per cent to the winning bidder’s agent.
“Two-and-a-half per cent is way better than the 5, 6 and 7 we’ve once paid,” says Manzo, who went through four previous transactions the old way.
“Anyone of average intelligence can do this, especially with access to an agent, who answers questions early in the morning or after 9 at night. Andre pretty well held my hand in setting up the bidding process and seeing it through.”
Unlike Manzo’s flat fee, Jones paid an initial commission of 0.99 per cent. She also paid a ½ per cent to have Zupancic handle the negotiations. But showings were arranged for her and she saved plenty when the buyer arrived without an agent.
“I overpaid when I bought my house a few years back, so this erases a bad memory,” says Jones, who runs a lakeside Richmond Hill snack bar.
But, even after hearing about Manzo and Jones, Alan is thankful he aborted his attempt to sell privately the home he owned for 30-plus years.
“Maybe I chickened out when agents started showing up and I realized I was going to have my own bidding war,” says the ex-teacher. “I got stressed and called an agent friend I knew. He hired cleaners, switched some furniture, did an open house. I got nearly $100,000 more than I expected, so the 6-per-cent commission was a deal.”
Bosley broker and TREB president Richard Silver says tales like Alan’s are common and that it’s tough to generalize about how the new era is playing out.
He says it’s a myth that alternative companies and open MLS access are siphoning business. “TREB had its second-best year ever in 2011,” he says, adding that it’s a bonus for some agents that private listings are now on MLS.
Manzo thinks Alan’s logic might be backward.
“I’d be more inclined to get an agent’s help in a slow market, with only one or two bidders,” he says. “With eight or nine, two might try lowballing, but the competitive market will take over.”
Some agents who spoke off the record said Property Guys, ComFree and ByOwnerSale are here to stay, but smart agents are becoming more creative with service, and a bit more flexible on commissions.
“It’ll be interesting to see how this shakes out when we get a slowdown,” one veteran agent says. “Much change has happened, but only in a strong market.”
Either way, smart buyers, sellers and agents can capitalize, insiders say.
Zupancic, meanwhile, is still working on his hybrid model.
“Listen, I’m an agent. I’m not going to throw stones at agents,” he says. “Realtors serve a purpose, but there are situations where it works well for all concerned when people sell privately. We’re trying to provide the best of both worlds. We’re trying to help people figure what will work for them, to find their own comfort zones.”
Absurd listing prices: If you don’t price it right, you won’t get traffic. Let a house sit on the market too long at an absurd price and you’re dead. If you can’t do the basic homework yourself, professional advice is available for a fee.
Clutter and mess: You might not need a home stager, but you’ll cost yourself big dollars if you don’t do a big clean-up. A handyman can be a great investment. Do touch-up paint and repairs. Wash the windows. Cut the lawn. Empty the garage. Minimize furniture and personal effects. Clutter is a turnoff.
Rarely home: That lawn sign and MLS listing are useless if nobody’s available when buyers or home inspectors want to see your home. Also, unless you like having weirdoes or thieves over to visit, screen your potential viewers.
Greed: Just because you’ve cut out the seller’s commission doesn’t mean you can expect buyers’ agents to work for free. Buyer-agent commissions can be negotiable, but if you don’t offer anything, you’re kissing off a huge part of the potential market.
Legal limbo: People who want to buy your home will expect you to be prepared to accept and evaluate offers. Have your lawyer lined up well in advance and available for when offers come in.