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youngandthrifty looks at for sale by owner in Canada. How to sell your own home and what to watch out for. Is Do It Yourself (DIY) real estate all its cracked up to be?

Just like my post about Investors Group and mutual fund advisors may enrage financial advisors, I think this post about not necessarily needing realtors may enrage a lot of realtors/ real estate agents.

So please accept my apologies in advance.

Because of the higher home costs (and subsequently higher commission costs) in Canada, more and more Canadians are opting to sell their home themselves.  However, this may prove difficult because the main way more and more Canadians are searching for their homes is through the Multiple Listing Service (this is how we found our current home).  The handy MLS is sponsored by the Canadian Real Estate Association.

Many Canadians are choosing to save $20,000+ (in some cases, even more) because of the high costs of real estate agents.  This is especially so for markets that have pricey homes like Vancouver.  For example, on a $500,000 home, the real estate commission will cost $21,000 for the seller.  As mentioned in an earlier post, the commission that a real estate agent receives is split between the buying and the selling real estate agent.  Of course, the real estate agent has to pay for their overhead and expenses, including payment to the real estate company (e.g. Re/Max or Sutton).

Do It Yourself Real Estate

With an increasing number of people choosing to DIY investing (e.g. through index funds or ETFs), it is no surprise that people are interested in DIY real estate.  However, this can be more difficult for the seller than one would think.  There is a high amount of resistance from the real estate agents, real estate boards to support people who are selling their own homes.  For obvious reasons, a real estate agent would most likely NOT take their client to an open house of a person who is selling their own home.


Because they won’t get any commission from the selling homeowner.  This is why it can be very difficult for someone to successfully sell their own home, especially when real estate agents are turning a blind eye to these homes.

This is much the same for real estate agents who opt for lower commissions, like that of 1% Realty (where the maximum commission they get is 1%, instead of the typical 7% on the first $100K and 3.5% on the remaining balance… but at the same time, you can get a full MLS listing).

In addition, people who are on their own in terms of selling their home may not have access to the Multiple Listings Service.  However, if they pay a small fee (usually in the range of $250-$500, they can get their home listed in the MLS).

In my own experience, my boyfriend and I looked at MLS regularly ourselves.  We had a real estate agent WANT to show us around and she was quite upset that we found a place without asking her to tag along (because that means she lost out on some potential commission).  Instead of using her, we employed dual agency with the selling realtor to save commission costs.  However this is risky and my be rife with conflict of interest, so definitely proceed with dual agency options at your own risk!

Canadian DIY Real Estate Websites

There are more and more Do It Yourself Real Estate companies out there, and the quality and attention to detail from these companies is pretty remarkable.  For example, certain companies take care of everything for you, including the custom signage (you just need to hammer it into the ground pretty much) and the legal documents you need to finalize your transaction.

These websites are great in that they could potentially save you tens of thousands of dollars.  The downside is because everyone uses real estate agents, there isn’t much selection for independently sold homes.

Here are some of the bigger DIY real estate websites:

  • ComFree has an easy to use website interface.  It includes homes for sale in all of the provinces across Canada and lets you choose which geographical area your home is in.  It is indeed very professional looking.  They have been around since 1997 and claim to have helped sell 100,000 homes in Canada.  As part of their commission free package, they include detailed information on sale transactions in your area (so you know roughly how much homes in your neighbourhood sell for) and even a customized “FOR SALE” lawn sign.  They even have marketing support at least 12 hours of the day.  How’s that for attention to detail?
  •  Property Guys also has an easy to use interface (especially if you are looking to buy a property, IMO) because you can “save” your searches and it has a cute legend which tells you if the house is an income property, if it is eco friendly, or if the price was recently reduced.  They even have an “Offer Maker Tool” in case you’re shy with negotiations and don’t want to do it face to face.  They also have lawn signage and offers access to Realtor.ca (aka Multiple Listings Service)- though I would assume you would need to pay an additional fee for this.
  • For Sale by Owner has many different sites, the main one is for homes for sale in the US.  For the one in BC, it is very simple and just includes homes listed for sale by owners, how big the home is/ was, and how many square footage that is.

One word of caution- if you are planning to “DIY” to sell your own home, make sure you do not DIY when you close the sale.  Lawyers and notary public are so important for this process.

Readers, what do you think?  Do you think this trend for DIY real estate will catch on?

Article comments

Gary Jones says:

Just a note, comFree is no longer in business. They changed into a regular brokerage, charging astronomical fees and you still have to pay a commission. One of the biggest players in Canada in for sale by owner sales seems to be now TradeCasa.com. They are totally commission free, quite similar to Zillow in the United States. They seem to have listings in every province and every state. I listed my home in Burlington, ON, with them back in August, 2021. Got inquires right away and sold in 2 days. Did not pay a red cent in commissions. You should update this article. Cheers. Gary.

Cindy Hughes says:

The last paragraph of this article is so important. I have sold three homes myself and bought one condo privately. It is not that I don’t like realtors, it is just that I am the one who gets up at 6 am to pay mortgage interest and keep things maintained so I feel I should be allowed to represent the properties myself. When I sell a vehicle I don’t call someone else either. If you find a buyer who really wants your home, the next step is a lawyer. You shouldn’t fill out paperwork without one — I wouldn’t even want to sign paperwork from a realtor without a lawyer. Lawyers don’t generally charge more for making up the Offer and seeing the deal through, same goes other way/ reviewing the Acceptance and seeing it through. One lawyer told me if they are in charge of the paperwork from the beginning they know it gets done right. Apparently they sometimes have to fix things realtors put in/miss in contracts. For all my deals once the buyer and I verbally agreed on the aspects of price, inclusions, and possession date the buyer went to their lawyer who put me on speaker while he/she confirmed the Offer details. They then sent it to my lawyer, and once possession date came all the paperwork was handled. My lawyer confirmed the transaction by noon on the big day and the keys got handed over.

You do have to do your market research before selling and the first house I sold was definitely the easiest because there were few houses in that price range. It sold in 48 hours. Second house took over three months. And the third took just under three months. I think the hardest part these days is the bazillion different places to advertise. When I sold my first house I put up a lawn sign and put an ad in the local Classifieds. By my third there were so many options but no main option. I didn’t want to use mls because if I eventually decided to use a realtor I didn’t want to go through the ‘days on market’ type price penalties so many sellers endure. I can add one more option to this diy website list and that is listingpanda.ca. When I sell again I will start there.

Zardoz says:

Realtors are parasites of a crooked system.

Nasrin says:

I’m happy that other choices w I’ll have to be a house owner

KKing says:

We have sold and bought several properties on our own, we have one up for sale now in Calgary. DIY is not for everyone and not for every property. I think the Canadian Real Estate Board is so worried and they spend so much time lobbying in Ottawa to keep their industry tight knit, they need to embrace FSBO as in most cases people will use Realtors / Brokerage firms if it is the right thing to do. The house we are currently trying to sell has only ever been on the market once, it has been privately bought and sold 3 times. The real estate industry needs to change and evolve as more and more people are turning to the internet. You go anywhere in the world to by anything and prices are never fixed, real estate fees shouldn’t be either as everything should be negotiable. We have no problem paying a buyers agent if they have done some work.

RL says:

I think if people become more dissatisfied with selling through realtors, more will go on board to sell themselves. A realtor can really shine when they can turn a hard property into a good sale. It happened to us twice. Hats up to those two ladies. But good realtors are not that easy to find. With a bad realtor, you go through hell. You have to monitor them every step of the way, at the end you still have to pay them commission. With a realtor, the offer tend to be low. A little crack on the wall, for them it is structural damage. Buyers occupy realtor time like it is all free, actually sellers pay for the buyers time. Do you think the realtor will want to sell for the highest price so they get more commission. No they rather sell it quick and move on. The best way to sell it quick is to sell it cheap. We sold one house ourselves, asking for $89000, sold it for $85000. Realtor suggested to list it as $64900. When the deal is done, the realtors thank the buyers, wish them luck, thank their staff, but they do not thank the sellers. We always consider selling ourselves first. Just a couple of days ago, we discovered our realtor put our nice bathroom photo from our listing onto her other listing as well. Let her know, 2 days later still no reply. We called the office and talked to the owner to asked her to take it off. Strange. We had another realtor shove the contract for us to sign. She put a price on it without discussing with us first.

rosamond brunet says:

Thoughtful post . I learned a lot from the information , Does someone know if I could possibly locate a template UT UAR Form 19 version to type on ?

Ash says:

We also have a free listing service where you can post your listing beside real live MLS listings linked from REALTOR.ca. Our site is 199forsalebyowner .com

Lehhko Team says:

If you are looking for an alternative to MLS, FSBO, Craigslist and Kijiji, give Lehhko a try. We are a Canadian startup which and our platform is free to use for a limited time and you will get excellent exposure on a beautiful interface.

Stay tuned as we develop the platform to become the leader in for sale by owner online marketing.

Fred says:

Kyle, you can go to Canadian Tire, buy a $2.99 for sale sign and stick it in your front lawn, and I guarantee you will sell your home but I also know you wouldn’t sell for the top dollar. Let me ask you a question. Would anyone know a house is for sale if they don’t know about it? Who do you think will see your for sale sign or your listing from these for sale by owner websites? Your neighbor and another 5% of the people who are on the web looking at for sale by owner websites. How can you possibly reach an excess of 5 million people?

Properly marketing your property costs money.

You say there is more incentive for me to sell someone’s home fast but you neglected the fact that it is a homeowners single biggest investment so wouldn’t you say there is a bigger incentive for the homeowner to hire a professional to market their house to a larger group of people so they don’t mess on hundreds of thousands of dollars?

let me ask you another question. Would you be able to sell your Picasso painting at a garage sell? Absolutely, but would get more money for that Picasso painting at the garage sell or an organized art dealership that would showcase your painting to millions of people?

Kyle says:

I appreciate the humble and logical tone of your reply Fred – thanks for being reasonable in a world full of keyboard warriors who aren’t! That being said, we both know your Picasso example isn’t relevant. What you’re seeking to do when you sell your house is get your house in front of as many eyeballs as possible so that it can go for as high as the market will bear right? There are lots of ways to do that, and you can get listed on MLS for much much cheaper than what “full service” Realtors charge, so that’s not really a valid argument either. I disagree with your incentives argument. You’re right, my home is the only home I’m looking to sell, tens of thousands, if not hundreds of thousands of dollars depend on me getting it right, whereas a professional has dozens of homes selling at any one time, and the commission difference on flipping a home relatively quickly vs getting top dollar is often negligible relative to making the sale and moving on to the next property. Properly marketing a home does cost money, the question really is how do we determine value relative to money when commissions are such a flawed way of doing things.

Fred says:

FSBO is very appealing but only to those who are not actually in Real Estate professional. With our current market condition it is a no a brainer to many to sell their home themselves but there are several drawbacks. This is solely my take on it:
1. If your house is listing with comfree or any other FSBO site that market the property on realtor.ca or MLS, agents will never show those houses simply due to the commission structure. It is usually 1% or asks to call the seller directly. Agents would rather show a house with 2.5% commission as opposed to 1% or worst calling the seller.
2. Your house will be in the market for a long time which means you will receive some offers but not what you intend to sell for.
3. You get what you pay for. There are agents who would charge 1.5% commission and 2.5% for co-operative brokerage. So 3.5%. And what do you think you would get for that. They would list it on MLS and go back to their phones and continue on playing video games and hope for the best. You will end up selling your home but no for the highest price. Real Estate agents core responsibility is to MARKET your property but I highly doubt they would do any marketing for 1 or 1.5%.
I work in a team of 30 agents and a well known brand in GTA. Our commission is 4% + 2.5% for co-operating brokerage. That is 6.5% commission and I understand that’s a huge junk of your net profit, but our job as a real estate agent is to sell your property for the highest price. Let me put it into perspective. You list your home for 549,000 with for sale by owner websites. You will end up selling your house in 30 to 60 days. You end up selling for 600,000 which seems pretty good right. Well, a good competent real estate agent with solid marketing plan will get your home sold for 750,000. That is 150,000 over what you end up selling. If you had paid 6.5% commission that would translate into $48,750, however you would still make at least $100,000 more because you hired a reputable real estate agent who knows how to market your property.

On the surface it may look like you saved 20 to 25,000 but in reality you lost close to 100,000.

What I claim here I see it on a daily basis. Some folks list their property with 1% agent and they think they got a good deal. If you really think about it, why is the agent listing your property for 1%? 1% of 500,000 is 5,000 but if he markets your property in ONLY ONE paper it would cost him 4,000. That doesn’t make any sense. They charge 1% because they don’t have any money.

And lastly if an agent can’t even negotiate a good commission for himself what makes you think he would bring the most money for you when selling your home?

Again, you get what you pay for; nothing less nothing more.

Think about it.

Kyle says:

Fred – You have more incentive to sell my home quickly then to worry about getting top dollar for it. It’s basic math – check out Freakonomics for more details.

Mari says:

So true what you say. Lol

Jana says:

I disagree with a few things here. I am a homeowner who used a full brokerage last year and because of that, going to sell it myself this year. 1. the house is worth what the house is worth. If the realtor sells it for a lot more then what the market value is, the bank will not advance a mortgage for that amount once it is officially appraised. The realtor is not able to bump up the market value by $30k or so just because they are marketing it. 2. the listing agents barely show up to showings so they do not market anything. And they insist on the owners not being there. This leaves the buyers and their realtor wandering through the house without any direction and “will get back to you” for any buyer questions. And leave a key in the front door, like one of them did. 3. yes, maybe it will sell faster but only because the price is lowered prematurely. Anybody can sell by lowering the price. I would argue if I lower the price by the $30k I could sell it with the plastic For Sale sign too. This is just my experience. I am sure there are hard working agents out there but maybe they are more rare then I thought. I believe now that they are more appropriate for the high end properties where one needs the staging and marketing due to the very specific group of buyers. But for the average family home, I do not see the benefit of full service brokerage.

Fsbo Advisor says:

Comfree and Property guys are not the only players in this space.
We’ve listed over 3000 fsbos for the diy seller. Therealtycommission.com costs only $199 to list until sold and is far less expensive than these other fsbo companies.

Terri Who says:

There is good and bad people in every industry, not just in the real estate game. I’m in the process, just considering it at this point, of selling my home myself. I have bought and sold 10 plus properties in the last 15 years or so, haven’t counted the number, guess I should! My comments regarding realtors would be: some are good at their job and actually care about their clients, however, sadly, in my experience the majority don’t give a damn and are just out for the highest commission they can make on the deal. I am extremely upfront with the potential realtors that I interview before deciding on which one to hire to either sell or when I am looking to buy a property. I tell them that this whole deal is all about money, you making your commission and me making as much money as I can. Most of them are amazed and don’t know how to respond to my bluntness and straightforwardness (is that even a word?).
I also know a fair amount about the whole process of selling, having done it so many times. For me the pics. that go up on realtor.ca or any other place the property is being advertised are VERY important. They are what is going to get people into the house, the second most important thing is the write-up that goes along with the pics. Of course there is also the staging of the property, both inside and out, etc. Having spent probably in the region of $100,000’s of money to realtors in the past I am looking forward to seeing how selling my present home myself is going to go and am looking forward to saving the commissions that would go to a realtor. Will let you know how it goes. I am in B.C.

Kyle says:

That’s a really interesting insight Terri. If I was a Realtor I’d love if a client was that upfront with me. I agree with you about presentation being super important. Please let us know how it goes! IF you live in BC you must be looking at a pretty decent chunk of change I would think!

Lisa says:

Hi Terri, I am also in BC and am thinking about listing my condo on my own. I unfortunately don’t have as much experience as you. I would be interested to know how you made out with this. I’m pretty scared to be honest.

Elmo says:

We just sold our house through property guys and saved a ton of money on the listing side. The purchaser was brought to us by a Relator and we agreed to pay them a reasonable commission. All and all I would do this again in a heartbeat. I would even venture out to try and just get the house listed on MLS and skip the added $1400 property guys charged. We found that realtors once we agreed to pay a commission were more than happy to sell our home.

Dana says:

How much did you end up paying them?

Glen says:

Seriously a “Professional Realtor’. The number one example of an oxymoron. One “course” does not make you a professional.

Even the Canadian Advertising Standards has brought charges against the associations advertisements on TV for false and misleading information.

Of course not all Realtors have this low level of incompetents mentioned by others. However, 10 minutes reading listings would suggest the majority. I’ve even seen an RV listed as a house by a Remax realtor in Drayton Valley.

Any average person could handle doing their own listing on the realtor.ca website. But since the realtor.ca site is run by the realtor’s association we have to find work arounds.

After all they have a vested interest in those rediculas fees being collected.

Lila George says:

Real estate agents definitely offer a valuable service. I have had luck with an agent in the past, but I agree that with rising house prices the fees are getting very steep. Thanks for the info on the free listing site Prelist.org. I am checking out the site right now, and it is just what I am looking for as a first-time private lister! And, you can’t beat the price…FREE!

Jean says:

Hi Jean,

Parasite realtor here… The MLS was built by the realtors and is paid for by the realtors. If you want to build your own system and pay for it, go ahead. Oddly enough that complicated system is why I have been schooled, and keep refreshing courses every year. (which is also mandatory)

Now most realtors will pussy foot about and try to be the nice, nice, but screw you. I am not a parasite, I work hard for my clients and any of them will tell you that.

Good day.

Kyle says:

Please explain what is so complicated Jean. I mean that sincerely – not sarcastically. I would like to know what makes the MLS so complicated that the average person couldn’t use it?

Jean says:

Hi Young, to begin, I think you shouldn’t apologize to Realtors. They are the ones that should apologize for existing. The problem in Canada is, THE BIG PROBLEM is, that being a small country (yes, that’s the truth), there are monopolies in all the aspects: from telecomm companies to Real State.

I think COMPETITION is necessary here. MLS and the Realtor association is a monopoly and needs regulation and COMPETITION. The system is too complicated for DIY in both directions and that’s the realtor’s trap. Is almost impossible to DIY in such complicated market. That’s the reason I am going to sell my property (losing a lot of money) to rent and begin to save. I’ll never-on-my-life “buy” a property in Canada again (nor me nor all people I can influence). Back home (Europe) everybody rents and is happy. Realtors are o more than parasites/predators of other’s efforts.

Sam says:

I really do think that if you do your research, have a REALISTIC price in mind and know how to present your house best to sell it, you can sell your house without an agent. My wife and I were first time sellers last year and took a chance listing with Prelist, thinking we would try it and then list with an agent if we had no bites after a few weeks, and our house sold in just over a week. It was completely free, we never ran into issues and we had complete control over the entire process. It is worth checking out if you were thinking of trying to list yourself.

My wife Sylvia and I purchased our Kanata bungalow 16 years ago, after sitting down with a Remax agent who was recommended to us. After asking what we were looking for – “a 1600 to 1800 sq.ft. bungalow” the agent showed us over a dozen two storey homes? We bought a sale by owner bungalow, which we found ourselves. If you are selling your home privately, and are reading this message, believe me there are people like us looking for your home. We have just recently listed with PropertyGuys.com to sell our home, and plan to work with them offering sale by owner services. George M.D.MacKenzie – Kanata, Ontario.

Mari says:

Wish you were in BC

Haze says:

@GDS don’t you mean “house-depot” hahaha 😀

GDS says:

Furthermore, many have noticed I think that ever since houses have become very over-proced, real-estate agencies, the banks, the media…have been told to call them “Homes”. As this increases percieived value. The same scheme McDonalds used to disquise a crappy hamburger as a “Sandwhich”. The use of multiple-syllable adjectives is also used to confuse consumers into paying more…”anri-lock-brakes”, “salt-free water”, “Peel-and-eat-shrimp”, etc etc etc. there is not a house in Canada worth more that 80,000 $. And for those 450,000$ houses made of drywall and particleboard….call Home Depot and ask how many parking lots do you need to pile 450,000$ worth of worthless drywall. It is about 8 parking lots of your typical Walmart in land area. So think before you waste all that money in a loosing asset like a 4X overproced shoe-box just so you and your fat one can watch TV commercials all night eating chips and ice-cream and hoping the love lasts.

Gillian says:

We have sold every home we own on our own and probably saved over 100000 dollars in the process. Yes we get harassed by agents but we enjoy the ride, it may be a longer ride…but we enjoy it. We have sold over 6 homes and we are in our 60’s and selling one at the moment. The only issues we have ever had was when it came to purchasing a home and having to use an agent. We were lied to and actually almost missed out on one purchase as the agent wanted the home himself. If you asked me take a chance and enjoy the ride!!

Kyle says:

Think about how much those compounded savings have grown to Gillian! Good for you.

Oli says:

@Young – you’re smart that you didn’t sign any agreements with the Realtor who wanted to show you around. I hope her getting “quite upset” didn’t turn too ugly.

I had a buyer’s agent get upset with me once when I tried to list my condo for $0 buyer agent commission (I was hoping to find buyers looking themselves directly w/o agents). She used some pretty colorful language with me on the phone when I crossed out her commission while responding to her offer. After that, I never saw another counter offer from her again. I was pretty sure the buyer was really interested and it was just the beginning of our back and forth so I was surprised that I didn’t hear back. The buyer ended up being a friend of an acquaintance on facebook and I reached out to him a month later. I admit I did go out of my way to look him up because I was so appalled with the whole situation.

It turns out he never saw my counter offer from his agent, but it was too late because he already bought another place. So the agent pretty much ripped up my counter without showing it to her client. I thought about reporting her, but I knew she would only get a slap on the wrist at best, so I didn’t bother. Talk about an insane system and unethical industry!

Heather says:

Another notable addition to your list of DIY sites is HomeWebo! They offer single property websites for home owners looking to save and sell on their own! Each site has multiple template flexibility, is mobile-friendly, and gives the seller detailed stats on site traffic and visitors. Each website is equipped with a contact form and sellers receive instant notifications when interested buyers reach out.
Single property websites are great advertising, because interested buyers can be linked directly to the property, without having to search through cluttered sites with many listed properties. And a dedicated URL looks great on a For Sale sign and other print materials!

tom germann says:

I have been a realtor for almost 10 years now. I ask all listing appointments if they would like to try to sell privately for a few weeks or months (if they have the time). They always say no, even though I give a lot of good suggestions on how they could do it. Not everyone has the time.
But Realtors have not always been around. Go back 100 years and most sales were private.
As long as the DIY knows what they are doing.
Commissions are flexible these days and I show buyer clients ALL available property as they are signed under buyer agency.
In Ontario, when I sign the contract all the bases are covered for my clients and myself.
The last problem is all the part time realtors out there who still have full time jobs. For whatever reason they are in the business for a few months or a year or maybe even two. If all they want is the write offs for tax time I wish they would focus on their full time job.
Some of their offers and listings have been BAD.
Sorry just my 2 cents!

Kyle says:

Sounds like a really ethical strategy Tom. Pretty tough to say you aren’t worth it when you plainly gave them the option I guess.

Haze Hartwig says:

Here is the link for the stat amongst others.
http://www.realtor.org/sites/default/files/Highlights-NAR-2012-HBS-2012-11-12.pdf the stat about interviewing realtors is on page 9.

Granted its NAR which is US based I would be surprised if Canada didn’t follow trends near the same. (I am based out of Vancouver)

Haze Hartwig says:

As a full time realtor based in Vancouver, I have a lot of respect for the DIY sales people. I can understand the attraction of saving the money instead of having a professional sell it for you. However one has to wonder after all the work through showings, keeping track of the past views, following up, promotion, etc. are you saving the money or are you earning it?

I was reading up through many of the comments and it appears that quite a few of you have run into (to put it bluntly) lazy jackasses in the realty industry. A good way to avoid this is to do 2 things:

1. Interview a few realtors, a recent stat stated that 66% of home owners only speak to 1 realtor. That is crazy talk.

2. Find out if they have an exit clause, if you hire someone and they are not doing the job up to your standards shouldn’t you be able to fire them?

Kyle says:

That makes a lot of sense Haze. Just out of curiousity, where did you read that stat? I’d like to read into that a bit more. Thanks for the insightful comment!

Doug Morton says:

There is little doubt someone with the knowledge and experience could sell their home privately. But this can be a complicated process which is why a Realtor is needed, not to mention you get the added exposure from other agents and the MLS. Of course if you want to save money you can opt to list with 1 (or 2%) realty but a lot of agents in my town will opt not to show those properties until the very last moment.

Still if you opt to list yourself make sure places and websites like comfree have a big enough market in your area. THe majority of people looking to buy tend to use the MLS so smaller areas a lot of residents won’t even know about public selling websites like comefree

Carol Day says:

Who Needs Realtors When you can List your Home Yourself?
Hmmm, who needs a roofing company when you can look up online how to shingle, who needs a plumber. Heck, who needs a surgeon when you can cut yourself open yourself? Anyone who would ask who needs a realtor has no idea of how little they know of the process. It is not to say that one cannot list and sell one’s own house, hot area, hot market etc some people can. After 6 years full time in the business, I still ask realtor advice when buying or selling myself–I listed my own property but was happy to pay someone else to work with the buyers.

Oli says:

Carol, why do you list it yourself but use someone else to do the showings and negotiate with the buyers?

Commissions on sales are the main source of earnings of real estate agents and brokers. The rate of commission varies according to whatever the agent and broker agree on, the type of property, and its value. The percentage paid on the sale of farm and commercial properties or unimproved land is typically higher than the percentage paid for selling a home.

dieta says:

Understand First How Agents Are Paid. Splits vary among brokers, depending on policy and production. A top-producing agent who closes 100 transactions a year is paid more, a higher split, than an agent who closes one deal every couple of months. Only licensed real estate brokers can receive a commission. Brokers have written agreements employing agents and, in turn, pay the agents, typically as independent contractors. Commissions paid by a seller are divided with about half going to the listing side and the rest to the selling side; it’s not always a 50/50 division.

I hope this trend for DIY real estate will catch on, the internet is certainly making it easier. When we bought our last house, our agent did nothing more than unlock the door. The agent did not have any more information on the house than what we had already read on MLS.

young says:

@Kanwal Sarai- I agree- the internet is making it much easier. I really think its hit or miss who you get as a realtor. There are some who seem to do a lot and some who do so little.

Carol Day says:

A detailed pricing analysis should be done for buyers and sellers by realtors and unfortunate that you found someone who did nothing but unlock a door. also keep in mind that any information put on mls is collected by realtors and the (and they can be liable for error both by lawsuit and ethical violation unlike a private seller) and those who data input and maintain the system are all paid for by realtors. there is a high cost to being in real estate, and i don’t know why this was kept quiet for so long. I have been disclosing more of this to my clients in the last year, for example that one 1/4 page ad in Homes and Land that fit two was costing me $395, the half page in our local real estate section is 2k per month. I am preparing to release a more formal disclosure of costs in the near future. In Ontario in the Toronto area and Peterborough area the average realtor sells 4 homes per year. If that is all they are selling they are just ‘getting lucky” and not likely a full time realtor. I can see that the experience level here would be in question, and likely the quality of the service and advice

young says:

@Carol Day- Wow, I had no idea!! Thanks for sharing.. I think sharing your costs is a good idea.

Sugel says:

When selling a house with the help of a real estate agent, that 6 percent real estate commission can eat into any profit the seller might receive from the sale. In today’s depressed real estate market, that fee could even result in an overall loss. Even with the funny accounting used when people sell their homes — the accounting that doesn’t consider all the costs of owning and selling a home as part of the cost basis — in a bad market, it’s difficult to show even a fake profit.

young says:

@Sugel- Is that what the commission is where you are? Is the 6% not tiered?

I don’t know about in Canada, but in the US it always seems like the FSBO houses are on the market a lot longer, too.

VanLarry says:

Way back when I was a little boy, my parents choose the DIY route for a 2nd home we owned.

This was back in the 80s. No MLS website to search. Common way to get information was the local real estate paper. There was also a home show tv listing that was popular in Vancouver. If you were lucky enough to own a computer with a modem, there was also a bbs listing done by the local real estate paper.

Anyways, during the time my parents did their DIY, no realtor would bring their clients to view our house. Our big forsale sign would often be knocked down or pulled and thrown onto the street. Ads that we taped onto lamp posts were often torn the next day.

In the end, we never did sell that house. We rented it out for quite a long time, going through alot of people. We finally sold it, this time through a realtor, in 2003.

From that, in my most humble opinion, not only will your local realtor community shun you, they will do all the dirty tricks on you.

young says:

@VanLarry- MLS has revolutionalized the real estate industry- I can understand the need for realtors without MLS but with MLS (if you’re looking for property anyways) it is very helpful. Mind you, a realtor has “inside” information on the property through MLS (like what the last buyer bought the house for etc.).

I agree that the realtors will shun you. There was a documentary recently on TV talking about how realtors called to threaten this person doing DIY and told them to use a realtor “or else”.

Carol Day says:

I have really mixed feelings about the access to the mls site by private sellers. It was created by realtors and is paid for by realtors in order to help get exposure for our clients but the cost is millions per year. We don’t need to go into an IBM store to learn of the inventory, because of the IBM website but we still need advice on the specs, features and are not allowed to sell our resale computers on their site, nor is apple or dell etc allowed access to their site. I am very interested in the documentary you mention, and would like to see it. What was it called? thanks Carol

young says:

@Carol Day- But realtors have access to more detailed information on MLS right? Like what the house sold for before etc.

SavingMentor says:

I used to think this way too and I actually bought our current house through private sale. It worked relatively well.

However, for the amount of effort and, more importantly, stress involved I no longer thing it is worth it for busy people. True it’s a lot of money, but the clincher for me is that people coming into a private sale do expect you to split the cost savings with them. I know, because I was one of them and that was one of our biggest bargaining points.

I think if the cards fall right, you can definitely do very well for yourself with DIY – but I no longer think taking the chance is worth it. I may change my mind on that again because I’m only barely over the fence. Time will tell.

young says:

@SavingMentor- I think if I were retired and had a fixed income and had the luxury of time, DIY real estate/ private sale would be the way to go. However, I agree, that as busy working people, it would be difficult to show the home when you’re working etc.

I was just going to mention Freakonomics Echo! It seemed pretty cut-and-dry from that article. I bought my house from a couple that was selling privately. None of us used a realtor, we had a local lawyer draw up the paperwork, and it cost me a very minimal amount for closing costs. We have both been very happy with the whole transaction.

Nick says:

I probably wouldn’t do DIY unless the market was going crazy. I might “try” it for a few months, but everything I’ve read here in the states says that realtors help prep, stage and promote the place so well compared to a diy-er that much, if not all, of the commission is made up by higher sales price.

I’m not sure that I buy it completely – I find it hard to believe it can make THAT much of a difference. But I’m not completely sold on DIY real estate.

young says:

@Nick- That’s true- but oftentimes the realtors (at least many here in Vancouver anyway) do not do much to prep, stage, or promote. My BF’s parents are working with a realtor right now who isn’t bothering to prep or stage or anything.
I guess there are good ones and there are bad ones. Some put in more effort and some put in less effort.

Years ago I used to think this was the way to go, but experience has made me wiser. Not only is your home shunned by the realtor community, but potential buyers expect to share the windfall savings – there is a two tiered price structure out there – listed homes and private sales. So your upside is often less than you envision.

Then my thinking evolved to “well, if it’s a super hot market, then for sure DIY.” But I no longer think that, since a really good realtor can squeeze so much from a multiple offer situation that s/he will often cover much of the commission costs.

Finally, mortgage lenders view private transactions dimly, and it can be challenging to get an approval – especially if there is some ‘hair on your deal’ already.

If you feel strongly about the cost issue, ask your realtor to discount her listing commission. It’s not usually wise to discount the selling commission since the realtors will tend to direct their clients elsewhere first.

So in sum, while I would not argue strongly and say you are wrong Y and T, my own view is different – again, based on a lifetime of experience in the personal finance industry.

Keep up the great work ! Cheers, Ross

young says:

@RossTaylorMoney- Very very true- about the multiple offer situation- so it depends on how good the market is of course. Some realtors can cause bidding wars, and those realtors are probably worth their weight in gold 🙂

It can be scary to DIY and there are a lot of drawbacks (like the ones you have mentioned, which are extremely valid), but I think some people may prefer to DIY, probably because they have been burned by realtors in the past, or they are averse to salespeople (I myself am not one to be swayed by sales pitches, I don’t think).

Thanks for your insight- really appreciate it!

Carol Day says:

I agree you have outlined many of the potential risks here. There is a 1% company in town and he has had a listing that has sat for about a year. it is a rooming house and with the zoning headaches and all the due dilligence that would be expected from our professional standards it is just way too much work and liability to take on for free or almost free. I have done private offers as a favour to past clients but would never do do on a property like this. usually the listing realtor would be responsible and paid for doing much of the diligence re the property but not in this, it’s a “mere posting” so that leaves the buyer’s rep to do it all. And you are quite right, lenders are super cautious about a private sale because they know that no one bound by professional standards and liability has evaluated the property and priced it. They only know what the seller has told them, and a seller may not know what they don’t know and miss things. Banks know this too.

I’ll try FSBO next time I sell real estate. There are more fixed fee agents now so that might be the way to go as well.

young says:

@retirebyforty- So it sounds like in the US, the FSBO is picking up, I suppose. 🙂

When I sold my first house years ago I used Comfree. It worked really well and it didn’t cost me a bundle. As far as staging goes, my Grandma and I did it. I sold my house for well over the list and I didn’t have to pay a Realtor half of that. It was great.

young says:

@Miss T- Great to hear your experience with Comfree! Your grandma sounds really helpful and handy- you sound like you have great family to influence your financial decisions in your life 🙂

Simple Rich Living says:

Definitely will seriously consider to sell it myself when I cross that path one day. I have a co-worker who once said that he would never do something like that as he knows nothing about the housing market. Me on the other hand, I am driven to learn if it’s not overly complicated and it saves me money.

young says:

@SRL- That’s true. I think I would probably TRY the DIY route and if that didn’t work I would go the realtor route. There are lots of drawbacks to selling it yourself though, but hopefully that changes.

Echo says:

We had a 1% Realty start-up in Lethbridge and from what I’ve heard, their listings get less showings because the other Real Estate agents are pissed off that they won’t get a regular commission if their buyer chooses that house. As we know from Freakonomics, Real Estate agents are influenced by incentives. What incentive do they have to show you a home listed by 1% Realty?

As you pointed out, that’s the problem with many financial advisors who would rather put their clients in high MER mutual funds than direct them to invest in low cost index funds and ETF’s.

young says:

@Echo-Yup, when a realtor shows a home listed by 1% realty, they pretty much have zero incentive. It’s a broken system really 🙁 Hopefully there’s enough momentum that this changes somehow (or maybe I should have gone into real estate LOL).

Carol Day says:

re maybe should have gone into real estate. After 6 years full time I can tell you its not an easy gig at all nor is it cheap. My costs last year to be in business (and Im not a put a sign up, stick it on mls and disappear realtor) were in the 36k range. That is more than I ever took home as a nurse working for $23 per hour. The cheaper companies stay in business by listing cheap (which attracts buyer “leads” to them) and then they take the buyers and sell big company listings that pay a good commission. The stat i was told is out of 5000 people who start the courses, at the end of the courses and two years in business there are 36 left. If it were easy, the survival rate would be alot higher i suspect.

young says:

@Carol Day- I guess I should have made that statement in context, referring to Vancouver. The housing prices in Vancouver are incredulous and I’m sure realtors make a pretty penny of selling homes here.

Aloysa says:

I know people who saved quite a bit by listing their houses themselves. It did take longer for them to sell as agents have a better exposure to the markets. But what they were able to save outweights all the benefits agents can offer.

young says:

@Aloysa- Definitely, it would take longer, it would be more stressful, and it would take much more effort. Some people are willing to do this though to maybe see that they can do it (and do it successfully) 🙂

Robert Harrington says:

As a TOP OFFICE and award winning owner and managing broker of a small brokerage in the Fraser Valley I can assure all of you that the present real estate business model retains ALL of the original 1919 Realtor Business model and the real estate rules are constantly tweaked to keep it an Amway style Multi level Marketing business with three legs or up lines to pay.

The useless office, which only exists to produce more fee paying Realtors, The local real estate boards, which were originally created as a printing and catalogue distribution center and now only serves as a very expensive web site upload service with extra helpings of skewed stats AND last but not least, the Real Estate Council who makes you purchase Licenses and useless courses from Real Estate Boards and the Real Estate Associations..HEY just like Amway again.

So you are paying an average of 40K for just an intro service which anyone can do and the overpriced and SLOW uploaded info from the real estate boards website only captures the MLS listed homes and not al the market.

MLS listings are slow because listings are only uploaded when they are open..the whole real estate industry is a conspiracy against the public as your agent cannot do anything substantive for you as you have to call your lawyer if anything out of the ordinary pops up.

Real Estate transactions are about to be replaced with an APP as technology leaps ahead and this should have happened 5 years ago however the Industry clamps down HARD on any meaningful internet based service.

Kyle says:

Really interesting perspective Robert. Thanks for sharing.

irene fraser says:

times are changing and their commission is outrageous. a 4 month course does not a professional make. they often give people advice that is incorrect yet they are supposed to be governed by a code of ethics, which is not policed. in addition they re privy to insider knowledge which often puts them in a conflict situation. they often use this to their own gain and there seems to be no accountability. also many have other jobs, whereas years ago they could not take other jobs and I believe this rule should come back. I would never use an agent, would rather use a lawyer to do the offer and anything else. you mention that real estate agents avoid houses for sale that don’t have realtors, that may have been in the past but now this generation is on line all the time, are well informed, and they do look at everything

Haze Hartwig says:

That they are a changing, you are correct. A 4 month course does not make a professional. The people that take and pass the course can do it within a year at their own pace.

It is interesting that you use the term “they” as if you know all the realtors. I am a realtor. Have we met? Most realtors also sign papers to deal with those conflicts or avoid them by representing only 1 party.

It is correct that years ago a realtor was only allowed to hold that one career full time. This is actually a common discussion within the industry.

Many realtors will still show a home that is not on the MLS, in fact I do personally all the time. There are contracts which are signed with buyers and realtors for just such a reason. It appears that you have had some bad dealings with some realtors in the past and are misinformed about some issues. Try to keep in mind that there is no “they”, there is only what you have met until this point.