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Selling or buying a home without an agent can save you money, but do your research

An aerial view of townhouses in Richmond, B.C., in May.

DARRYL DYCK/The Canadian Press

Jo White knew the moment she laid eyes on an old-style, detached home in north Toronto that she had to have it for her family.

They had previously rented a home in the city’s Rosedale neighbourhood and were a few weeks into the search for their first purchase. It was also their first time wading into the private real estate market, where homes are sold and often bought without an agent.

Going it alone can save a seller money on commissions. For buyers, a private sale may mean avoiding a bidding war on a home being shown by dozens of agents.

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But mastering the private market can involve a bit of a learning curve, as Ms. White discovered before a friend mentioned knowing someone who might be looking to sell.

Ms. White was instantly smitten when she toured the home – the owner had raised her family on the property and was looking for another appreciative owner to live there for a decent price, one of the most contentious parts of private sales.

Price is a prominent issue in the private market because sellers don’t have the guidance of a realtor when listing a home, so they often advertise their home at a price that is out of touch with the market or the true value of the property.

To avoid such issues, Ms. White recommends doing your research on listing prices on comparable homes in the neighbourhood.

“With the internet, you have to be careful where you are looking, but there is so much information and people asking the same questions that I was able to find my way around,” she said, admitting she never considered hiring a realtor because she read up extensively on the market and talked to friends who had experience in private transactions.

“I spent a lot of time on places like realtor.ca or listings.ca, which gives you an estimated value of a property, so all of those things gave me the confidence that we weren’t overpaying.”

While working out how much to offer for a private home, Mark Weisleder, a partner at realestatelawyers.ca, suggests buyers turn to an often-overlooked source: neighbours.

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“A lot of people don’t talk to the neighbours and ask them things like, ‘Has there been repair trucks to the house?’ Because [sellers] won’t tell you if something went wrong or leaked, but neighbours might be more honest,” he said.

Neighbours will also be able to raise other red flags, including whether the seller was leaving due to conflicts with neighbours or if the property was used for a drug operation or other crime.

Mr. Weisleder recommends using that information, along with comparable homes’ selling prices, walking scores available online and the sales history of your home – which you can usually find at city hall – to help guide your offer.

Real estate lawyer Alan Silverstein said fewer than 5 per cent of the contracts he handles in a year involve a private home, which many believe can cut costs because the seller isn’t paying commission to an agent.

But how much you save – if you even save at all – is really dependent on the home’s pricing, even in a market such as Toronto’s, which has been recently mellowing, he warned.

To get a handle on the market, he suggests retaining a handful of professionals as soon as you start browsing private homes because the quick nature of private transactions can easily frustrate unsavvy buyers.

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“Most people think first and act later,” he said. “The time to go arranging with a lawyer, getting fees, contact a home inspector and check on their availability and get pre-approved for a mortgage is not when you’re in the marketplace. It is well before.”

Mr. Silverstein, Mr. Weisleder and Ms. White advise private home buyers against making a purchase without requiring a successful home inspection, or without consulting someone who can review your contract and answer any questions you may have.

“You really need an independent third-party that can guide you,” Mr. Weisleder said. “Buying a house is a very emotional decision and I have seen [people] who try to do it privately, and end up nervous wrecks by the end of it.”

This content appears as provided to The Globe by the originating wire service. It has not been edited by Globe staff.

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