If real estate agents are so expensive compared with many lower-cost alternatives now available to Canadians, why do the majority of home sellers still use them?
With 15 years at the helm of PropertyGuys.com, a private-sale marketing company, I’ve met hundreds of people trying to sell their homes and I’ve learned they tend to share some common fears. But most of these fears are based on misunderstandings of how real estate transactions actually work.
Here are seven of the most common worries and misperceptions I’ve come across and why you shouldn’t be worried about them at all.
1) It’s too complicated
First, buying and selling real estate doesn’t need to be complicated.
I believe that real estate is a simple function of “supply and demand” – nothing less and nothing more. Agents do little to influence supply or demand, other than going with the flow.
Unfortunately, most advertising campaigns by traditional agents or their associations attempt to convince you to be afraid of selling without an agent. This message gets even stronger (but no truer) when it is introduced by your best friend, daughter, son or long-lost uncle.
They’ll say they just want to save you from making a bad financial decision. Don’t believe them.
2) Without an agent you’ll be alone
Many programs out there today offer some level of personalized service and expertise comparable to the ones that most agents deliver. Most alternative providers recognize that you’ll probably want to have your hand held throughout the process as much as possible. Many providers are able to deliver that type of service to you.
3) Legal issues
Agents aren’t lawyers. Like many sellers, you may fear the legal pitfalls you’ve heard you’ll encounter as a result of not using an agent (you’ve probably largely heard this from agents).
Since a lawyer will need to close your transaction anyway, it only makes sense to engage them to handle any real legal fears that you may have along the way. After all, they are the real legal experts who can most easily provide you with proper guidance and advice for a mere fraction of what an agent costs.
4) Choosing your price
Many sellers fear that they will somehow price their home incorrectly (too low or too high). To alleviate this fear, many private sellers now turn to appraisers who can offer a more robust and less biased approach (appraisers aren’t paid a percentage of the sale price).
5) Lack of exposure
Missing out on exposure for your home is a very common concern among would-be private sellers. But it shouldn’t be. These days, you can get your property posted onto REALTOR.ca and a board’s multiple listing service (MLS) via brokers who charge only hundreds of dollars rather than tens of thousands (a result of the recent intervention of the Canadian Competition Bureau).
6) Too busy to take calls
For those who are afraid of missing calls from potential buyers because they are too busy – or don’t want to be harassed by aggressive agents – some private sellers are now using answering services which allow you to better manage your contacts and your showings.
7) Agents won’t show their buyers your property
That’s not true. While you may choose to avoid listing with agents, that doesn’t mean you can’t agree to pay them for bringing you a buyer. The biggest difference here is that a buyer agent is obviously going to want to secure an agreement on their fees in advance of introducing your property to their buyer.
As more alternative real estate companies pop up, I believe the most widely adopted services will be those that help sellers alleviate their fears (both real and perceived). It will be a mix of high tech but won’t be lacking in high touch. Real estate will always be a “people” business.
I concede that there will always be sellers willing to pay top dollar for the services agents provide regardless of the available alternatives.
But as more Canadians realize their fears are unfounded, it won’t be 90 per cent who choose that route.
Walter Melanson is Director of Partnerships and a principal of PropertyGuys.com Inc. The views he expresses are his alone.