In the real estate industry we call home owners that market their property for sale on their own FSBO’s or For Sale by Owners. The obvious main goal of a FSBO is to save money on real estate commissions. In the past few years we have seen more For Sale By Owners, especially in the lower price points and in the neighbourhoods outside of city cores. There are a few reasons for this increase including an opening up of the MLS system, perception of a Realtor’s role and the market conditions.
Recently the MLS ( Multiple Listing Service) was opened up to the public, meaning a FSBO could list their property on the MLS (still through a Realtor and Brokerage) but could manage the selling process on their own without offering a co-operating broker a commission for finding a buyer. The reality is, Realtors will work with a buyer client for months, sometimes years so naturally a Realtor would like to be paid for their efforts. For this reason, Realtors may not work with you and bring their qualified buyers to your home. FSBO’s also tend to overprice their property, but a Realtor knows the true value and will introduce their client only to properly priced properties.
Realtors are often placed in the same category as a used car salesperson – perception has it that Realtors are rolling in the dough for very little effort. Over the past few years the real estate market has been booming making a Realtors job look easy with properties listed on the MLS selling hours or days after being put up for sale. What people do not realize is that there is a lot that goes on behind the scenes when selling a property and a lot of liability as well. It’s a full time job and people do not realize this: a Realtor’s job includes setting the price, marketing the property, manage appointments, negotiate the contract and ensure a smooth closing. We are talking about huge amounts of money when buying or selling a home and in most cases this is the largest purchase someone will make in their lifetime. Working with a Realtor as a buyer is a free service so there is really no benefit to the buyer not to as the buyer is protected by their own Realtor. As Realtors we live and breathe real estate so for us selling or buying a property is second nature: we know the questions to ask and what to look for.
The nice thing about working with a Realtor is that the seller doesn’t pay for the service unless the property sells. In the case of a FSBO, each time they engage a lawyer for assistance, they are charged an hourly rate regardless of whether the home sells or not. In the end, there are FSBO that sell their property on their own but about 80% of FSBO’s do end up listing and selling with a Realtor.