More people are trying to sell their homes by themselves, either through sale-by-owner systems or by paying an agent to post their information on the MLS system, and not using the agent for anything else.
Can these private sellers also take advantage of the bidding wars that have driven some selling prices above the asking price, especially in Toronto? Likely not and here's why:
- Agents use marketing strategies to create excitement around a property. For example, a house at 30 Yorkshire Road, In Toronto was advertised for sale at $325,000 on April 7, but no offers were entertained until four days later, when lots of buyers had had a chance to see the place. On April 11, 13 offers were received and the property sold that night for $360,000. Private sellers have a very difficult time creating this type of marketing demand.
- Many agents recommend home staging, to appeal to the widest number of potential buyers. Private sellers often mistakenly believe that their own personal style and taste is enough.
- When agents handle the bidding, they have strict confidentiality requirements. No offer price can be shared with other buyers. There is an equal chance for buyers to succeed . A private seller does not have this obligation. They can show a buyer's offer to anyone else. That makes some buyers wary about competing on this type of property.
- An agent will often recommend that the seller sign a disclosure statement about the condition of the property or do a pre-listing home inspection and make the report available to interested buyers. This demonstrates integrity and helps put buyers at ease that they will not discover problems with the home after closing.
Private sellers are often told by their lawyers that they should not sign any type of disclosure statement about the condition of their properties, as it might entangle them in litigation.
What the lawyers don't explain is that when you make no disclosure, buyers will not trust the seller and thus either shy away from the property or offer less money. In addition, it may make them hesitant to participate in a bidding war.
When you sell by yourself, you may in fact save money on the real estate commission. Yet if your net price is less than what you could have received if the property was properly marketed, then is this really a good deal for you?
What many sellers have always known is that when you use the right agent to sell your property, your chances of obtaining more money is much higher.
Toronto Star, Section B, Monday April 25, 2011