Question of the week:

How do I determine the listing price if I’m selling on my own without a Realtor?

I’m selling my house without realtor. House appraiser says 550k but I believe the comparable sales were sold using a realtor. Should I list it lower by about 1/2 of typical realtors commissions amount? I feel a bit odd asking for 2 different prices depending on if the buyer uses a realtor or not. Kind of like if you went to a store and there were two different prices listed-one for cash and one for credit card.Thanks in advance.

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Nick's Response

Full disclosure here: I’m a Realtor (Ottawa) so obviously I’ve got some bias here, but I do have some perspective that you may find valuable even so.

  • Selling Without a Realtor – Totally do-able, but you’re going to need to take on the tasks that you would expect a good, professional Realtor to do on your behalf to maximize the sale price and minimize the time on market. Some of these would include:
    • Accurate list pricing (more on that further down)
    • Staging – This doesn’t have to mean a full physical stage, but spend the money for a staging consultation with a local company (likely around $250) and they’ll help you create a plan of attack to show your home at its best. Often this means decluttering, depersonalizing and arranging what you already have to its best visual advantage. Staging works to attract buyers from the photos, show the home to maximum effect during showings, and give Buyers that the home is well taken care of. It’s a small investment cost-wise, and it really works.
    • Pre-list home inspection – In our market these cost $500-550+HST and I include them with listings for two reasons. The first is that they uncover surprises and give you a chance to deal with them before negotiations with a Buyer. Second, a good home inspection is great marketing tool that you can share with a potential Buyer to help give them confidence to step forward with an offer.
    • Professional Cleaning Spend the money to have a thorough cleaning (scrub as if you’re scrubbing for surgery) of your home prior to photos. Even clean homeowners don’t clean to the quality of a professional, and Buyers notice the difference.
    • Great photography and videography – At a minimum, spend for high-quality HDR or Multi-flash photography for your home, along with a video walkthrough (not just a slideshow) and floor plans. These all help the right Buyers visualize the space.
    • MLS Access There are good companies in every market in the country that will help a “For Sale By Owner” Seller put their home on the MLS. If you only list on Kijiji and Facebook Marketplace (and other non-MLS portals) you’re going to miss potential buyers, and more of the right kinds of eyeballs looking at your listing is a good thing.
  • Accurate Pricing – I see that you’ve enlisted a professional appraiser, which is great, but in some markets and types of homes the professional appraiser (who is bound by a formulaic approach that banks and courts require) can come in off of the true market value. As another Redditor mentioned, you can ask 2-3 Realtors to create opinions of value for you. Unlike the suggestion in their comments, however, please don’t do it under false pretenses. Be upfront with the Realtors that you are planning to list on your own without their services, but are interviewing as backup in case you decide to pivot to a more traditional type of Realtor listing. This keeps things open and honest, and gives the Realtor the option to opt out if they don’t feel that it’s a good use of their time. A lot of Realtors won’t mind if you’re clear from the get-go. In short, supplement the appraiser’s opinion with those of a couple of Realtors. HouseSigma (or whatever similar may be available in your area) is also a good site where you can access sold listing data to fact-check any opinions.
  • Factoring in Buyer Agent’s Commission – The market value of your home already factors in the price for a Buyer’s Realtor, if they are working with one. There is no set amount of commission that you have to offer, and you do not need to offer two prices (with Realtor and without). Price your home the same regardless of whether you’re offering commission to a Buyer’s Realtor, since “the market” does not pay extra for homes listed by a Realtor. Your two scenarios are:
    • Offer commission for a Buyer’s Realtor – This can be anywhere from $1 to the “typical” market rate for your area (varies a great deal by province and price of home). Your lawyer will direct some of the closing funds for the commission (plus HST or GST) to the Realtor’s brokerage on closing.
    • Offer no commission for a Buyer’s Realtor – Buyers who have a Realtor will be responsible for paying their Realtor directly on top of the sale price, or will negotiate with you to have it included. If the Buyer pays directly to their Realtor, they may reduce their offer to compensate.
    • What about “steering?” – Steering is where a Buyer’s Realtor guides their clients away from homes that aren’t offering compensation satisfactory to the Realtor. It’s a despicable, illegal practice that gained particular notoriety because of a CBC article in 2021. Steering happens (I’ve reported Buyer Realtors who’ve mentioned doing it), unfortunately, but it’s likely far less widespread than some may believe. The best defenses against it are to 1) post on MLS and 2) price appropriately to the market. If your home is an attractive product at an appropriate price, buyers will insist on seeing it regardless of commission offered.
  • Negotiation – As a non-Realtor it’s less likely that you negotiate on a regular basis. A few tips for you if you’re listing on your own:
    • Know your comparables and be able to support your listing price – Too many For Sale By Owner Sellers aren’t confident in their listing price and get taken advantage of in negotiations, or conversely are too emotionally attached and defensive and lose out on a realistic sale price with a good buyer. Having good data is your best defense.
    • Don’t get emotionally involved – Easier said than done (you are selling your home, after all), but try to remain detached from emotions during negotiation. Some agents and their clients can be very aggressive, annoying, poor communicators or do any number of things that can get under your skin. Don’t let it get to you, because you’ll make poorer decisions if you do.

Good luck on the listing and sale! If I think of anything else I’ll add it here.

3 Mistakes that FSBO Sellers Make

1

Sticking Around During Showings – The Homeowner thinks it’s helpful. The Homebuyer thinks it’s awkward and weird. Don’t be that Seller! Let the Buyers walk around with their agent and speak freely. You can provide access via a lockbox.

2

Pricing Too High – Statistically, FSBO homes that do sell take 19 days longer, on average, than homes listed by Realtors. The Reason? FSBO owners often overvalue their homes, and the extra time on market is spent coming to grips with the true market value. In fact, only 11% of FSBO homes sell, with the other 89% eventually working with a Realtor.

3

Skimping on Preparation – FSBO Sellers list their homes themselves in order to save commission. Unfortunately many also skimp on the preparation and marketing that a professional Realtor provides. Don’t do this! With the money you’re saving on commission, spend some on professional photography, staging and a pre-list home inspection to make your home show its best and avoid surprises down the line.

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