Can I Sell a Property Without a REALTOR® ?

December 22, 2021

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Yes. Just like a Buyer can represent themselves, so can a Seller.

In Ontario, REALTORS® usually work with Sellers in one of 2 ways:

By having the Seller sign a Customer Service Agreement, making them a Customer. When you’re a Customer, the agent does NOT work solely in their best interest and provides restricted services. The REALTORS® obligations are:

    • Fairness, honesty and integrity to everybody
    • Conscientious and competent service
    • Only disclose the material facts that he or she already knows or ought to know – they aren’t required to take any further investigative steps.
    • Limited privacy obligations

By having the Seller sign a Seller’s Representation Agreement, making them a Client. The obligations to a Client are:

    • Fiduciary: the agent must promote and protect their best interests at all times
    • Negotiate favourable terms for the Seller
    • Maintain confidentiality
    • They must take reasonable steps to determine and then disclose all material facts about the property.

If a Seller wants to represent themselves, they can choose to be a Customer or they can choose to refuse to sign the Customer Service and Seller Representation Agreements.

Mere posting Seller

As the name implies, a Mere Posting is “merely” a listing that a real estate brokerage will post for a Seller to Realtor®.ca under a limited service agreement. There is no difference in appearance between a Mere Posting and a full-service listing on the MLS® System. A Mere Posting is essentially a “For Sale By Owner” property, but includes the invaluable help of Realtor®.ca exposure—your home gets showcased on Canada’s MLS® system (the most powerful listing tool on our market) alongside all other full-service brokerage listings.

The Mere Posting must be posted by a brokerage and the Seller must ensure the information in the listing is an accurate representation of the property; any misrepresentation is illegal. However, the key difference is that the Sellers represent themselves and take on all legal liability associated with the sale—there is no brokerage representation unless otherwise stated in the service agreement. This means that all responsibility lies on the Sellers who will have to arrange all showing appointments themselves, will have to do the contract negotiations themselves as well as complete/review legal paperwork themselves. With a Mere Posting, Sellers will also have to pay a flat-fee upfront to get the home listed.

You also need the knowledge and the right attitude to deal with everyone out there including aggressive agents and buyers. Remember, you not only want to sell your property… you want to sell it properly and for market value (and in today’s crazy sellers market, you want to be confident in knowing how to handle multiple offer situations so that you can sell your home for the highest price).

The reality of proceeding as an Unrepresented Seller

Property owners often think that a for sale by owner will save them money, but it often ends in headache and failure as only 11% of all properties sold are for sale by owner (FSBO). The greatest downside is the demand on your time and the legal and financial risks. Mistakes may cost you the money you’re trying to save. Don’t become a statistic. Facts reveal the median selling price of a home sold directly by an owner was almost 15% less than those who use a REALTOR®. Unrepresented sellers typically put less money in their pockets and are at more liability and risk to themselves.

  • The main reason most Sellers opt for a FSBO is to save the 2.0-2.5% commission they would have to pay a listing agent. But if your Buyer is using an agent, you still have to pay their commission, as it is always paid by the Seller. However, remember that the commission should be factored into your sales price, which is definitely doable in today’s market when prices are skyrocketing. And instead of thinking of the commission as coming out of your proceeds, remember that the buyer is the only one coming to the closing table, so essentially they are paying the commission.
  • There are costs for Sellers in marketing the property: Inspections, appraisers, lawyers fees, accounting consultations, listing fees, photography, videography, brochures, signs and lockboxes, newspaper and marketing ads, surveys, building plans and other documents like zoning validations for commercial properties and businesses.
  • Sellers actually have more paperwork to manage than Buyers. Preparing the proper paperwork, legal forms, disclosures etc. are your responsibility and you need to know everything that must be done to close the sale properly and legally. If you do not fully understand the legal ramifications and necessary steps required in selling a home, hire a real estate attorney. Don’t cut corners here.
  • It is crucial to price your property correctly from the start. Overpricing is the most common mistake and some people actually ask too little! A good marketing campaign can only do so much. Price will determine how quickly your property sells and if it sells.
  • When a Buyer wants to look at a home, it must be available for them. Most Buyers are not flexible enough to look at the home when it is convenient for the seller. As an Unrepresented Seller, you must be available 7 days a week. You may miss opportunities to sell if you are unavailable.
  • Security is a major issue when selling your home by owner. A “For-Sale-By-Owner” sign is an invitation to strangers to wander through your home. People will arrive at your home, eager for their own reasons, not all of which are honorable.
  • It can be difficult for a Seller to screen and qualify Buyers comfortably. Will the prospects confide in you about their financial status? People who know they cannot get a loan think that Unrepresented Sellers offer a better opportunity, because they’re hoping to find a Seller who will finance the deal.
  • Try getting lender pre-approval letters to weed out unqualified Buyers, nosey neighbors, and dreamers to ensure showings are worthwhile. You’re going to need a lockbox on your property and field and schedule showing requests as well as manage COVID forms and procedures to protect your employees and family.
  • Some Buyers agents will not show FSBO listings because they won’t have a professional colleague to work with. Working with an inexperienced and Unrepresented Seller might be too much of a hassle for a Buyers agent, so you could experience reduced showings, a longer time on the market, and unfavorable offers from agents trying to take advantage of you.
  • FSBO homes typically attract bargain hunters who often expect you to lower your price since they, too, are looking to save money on commissions. While you’re trying to avoid paying commission, if the Buyer doesn’t have an agent, they are doing the same. These Buyers will often deduct the commission from your asking price and then start negotiating with you. But why would you want to do that? If you’re going to take a % off the price upfront for saved commission, you could have saved yourself all the hard work and just listed with an agent.
  • You need to be able to navigate multiple offers and figure out which to accept. Hint: it’s not just the highest offer! The most favorable offer may be cash or a conventional loan with a large down payment, no contingency to sell another home, an offer to pay closing costs, or a closing date that works for you. It depends on your priorities during selling.
  • Every Unrepresented Seller should have an attorney or another qualified individual to preside over all agreements, draw up the contract, manage the sale proceedings and closing. Factor in the extra attorney cost when looking at your bottom line. Don’t randomly select inspectors, attorneys, and title representatives. Like any profession there are people who can slow, delay and possible even cost you the transaction. Have a plan for where to close, where to buy a title policy, where to keep a good faith deposit, etc.

At the rate that homes flew off the market in 2021, it’s understandable that Buyers and Sellers assume that now is an “easy” time to represent themselves. But the speed at which the market is moving right now is precisely why Buyers and Sellers need a professional to guide them and make sure they don’t get left in the dust. With the number of curveballs 2021 threw us, now is not the time to wing it.

For many Unrepresented Sellers, the financial savings are disappointing. By the time they figured the amount of fees paid to outside attorneys, consultants, inspectors, appraisers, escrow and loan officers, marketing, advertising… they would have been better off to have paid the agent fee which would have included many of these charges up front. Many Unrepresented Sellers say the time, paperwork and everyday responsibilities involved were not worth what money they saved.