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Leif Moore, an agent with Sage Real Estate, in front of one of his listings in the Bloor West neighbourhood in Toronto, on June 21, 2021.

Jenna Marie Wakani/the globe and mail

Have you ever received a letter in your mailbox from a real estate agent who says a serious buyer wants to make a private offer for your house “as is” for cash? Or maybe someone has knocked on your door showing interest in moving closer to aging parents or a particular school.

Even if you had no plans to sell, you might be tempted to get in on today’s hot market while skipping commissions and the hassles of showing your home during a pandemic. But whether the offer comes from a realtor, one of the ubiquitous house-flipping companies across Canada, or some random person named “Quinton,” it’s seller beware.

Leif Moore, a realtor and broker with Sage Real Estate Ltd. Brokerage in Toronto, says the biggest potential issue with these scenarios is the lack of representation for the seller.

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“Typically, when we do real estate deals, both sides will be represented by a professional,” says Mr. Moore, who does not use letters as a tactic. “If I’m representing the buyer, my job is to do the best I can do for that buyer, so there needs to be an intermediary for the seller.”

Even if the seller wants to avoid engaging a realtor who would charge commission, he suggests an independent professional evaluation of the property from one or more local realtors who understand the market. Second best would be a bank appraisal.

“Bank results are a bit lower so you’re leaving money on the table, but at least it’s not biased and puts you in the right range,” Mr. Moore says. “The biggest thing the seller misses is exposure on MLS [Multiple Listing Service], where the majority of homebuyers look for homes. You may not have to deal with the public, prep your house or pay the listing realtor’s fees, but you’ll never know what you could have got for your house if you don’t list.”

Clark Cai, a sales representative with Chestnut Park Real Estate Ltd. Brokerage in Toronto, delivers “Dear Homeowner” letters, clearly identifying himself on company letterhead. While most of his business is on MLS, he also represents clients who want to buy in specific pockets. He’s been finding an increase of people interested in selling off-market, mainly because they don’t want people going through their house during a pandemic.

“The vast majority of responses and interactions between me and the people who call me are positive,” Mr. Cai says. “Sometimes a house isn’t marketable normally. I’ve had sellers with tenants who are hoarders, making it impossible to do regular showings, so they sold the house to one of my clients who’s a renovator. Or maybe people need to close a mortgage. Everybody has a different situation.”

An example of a 'homeowner' letter.

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With homeowner letters, he recommends first determining if the potential buyers are legitimate. In Mr. Cai’s case, he normally represents the buyer, a disclosure he makes upfront. He suggests sellers get their own representation if they truly don’t have the ability to determine the market value of their property. If they think they know what they’re doing, then they need to look at the value of comparable properties that have sold recently in their neighbourhood. When there are property issues, the price will typically be discounted from the regular market value.

“My buyer gives me a price range of how much he can pay for a property without seeing it, and I provide the range to the seller,” Mr. Cai says. “If they’re okay with it, we arrange a showing for a five-minute walk-through and then give an exact number.”

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David Oikle, president of the Ontario Real Estate Association (OREA), says it’s certainly legitimate for realtors to use letters in mailboxes to try to meet their clients’ needs.

“It’s been a competitive marketplace all over the province for a while, even before the pandemic,” Mr. Oikle says. “People are attracted to particular neighbourhoods for many reasons and may have unsuccessfully offered on listed properties. The realtor is being creative to possibly identify properties their buyer might purchase before they hit the market.”

He advises homeowners considering a private sale to take their time, talk to family members and get independent advice from a realtor about their property’s worth before moving ahead. People may be out of touch with current home prices, closing dates and conditions in an agreement, as his own parents were when selling their house after 46 years.

“People should absolutely understand they have the right to their own representation,” Mr. Oikle says. “Even when we’re not representing them as clients, realtors have a fiduciary duty to act honestly and fairly to all parties, so if questions are asked about what properties have sold for in the neighbourhood, they have a duty to provide that information.”

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Jean Doucet, president of We Buy Homes BC, does not give advice to sellers when he buys their run-down properties to renovate and resell. In business since 2003, Mr. Doucet says the company discloses on its website, and upfront to homeowners who call, exactly what it does and what it does not do.

“We don’t give real estate advice because we’re not realtors,” Mr. Doucet says. “It’s not our role to interfere in their lives or parent them. The only thing we can say is, ‘please go consult with a real estate professional.’ "

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Nor does he send out letters, although he’s previously used billboards and local community papers. More than 90 per cent of his business is now generated online. Despite little advertising, he gets calls from people across Canada wanting to sell their homes privately for all kinds of reasons, but he only buys in B.C.’s Lower Mainland.

“We offer a price we feel is fair, but the decision always lies with the seller,” Mr. Doucet says. “Often these properties are truly ugly, so what they’re really selling is the land. We still need to pay very close to market value and [the costs of] materials have almost doubled with the pandemic, but it pays enough for me not to work for anyone else.

“I’m happy with that.”

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