In October, 2010, the Canadian Real Estate Association ratified an agreement with the Competition Bureau.  The agreement allows homeowners to negotiate the level of service they receive from their real estate agent.  The most basic level of service now permits a willing Agent to post a property on the Multiple Listing Service, then leave the homeowner to handle the rest of the transaction. 

On the surface, this is an attractive idea.  By hiring a posting-only Agent, a Seller gains the exposure of an MLS posting for a nominal fee.  However, anyone thinking of selling their house should be aware of the impacts of operating this way.

When it comes to marketing a property, a posting on MLS is just the start.  A full-service Agent will do a great deal more than using print, media and the web to advertise a listing. Most importantly, they engage the confidence of other full time professionals. The full service Agent representing a Buyer may interact confidently with the full service professional representing the Seller and both are likely to stay focused on bringing Buyer and Seller together. When the focus widens to include concerns about who gets paid what by whom, confidence in the process is weakened on both sides of the table. The risk is that the Seller will either net less on the sale or not get a sale at all. Many disappointed do-it-yourselfers wind up signing with a full service Agent who then gets the job done. If time is a valuable commodity to a Seller, the cost of perhaps having to start again ought to be factored into the cost/benefit analysis.

Few homeowners are experienced in pricing a home accurately, or in adjusting that price to changing market conditions.  Fewer still are comfortable with negotiating an offer to receive the best possible price.  If an offer is made, the majority of Buyers will have an Agent negotiating for them, pitting the homeowner against an experienced professional.   

In a full-service scenario, after the deal is signed the Buyer’s deposit is held in the Brokerage’s trust account.  Without an Agent, Seller and Buyer will have to decide where the money is to be placed.  Before the deal closes, Buyer visits may have to be scheduled, and in the case of condominiums, Status Certificate packages obtained.  Without a full-service Agent, this is up to the Seller as well. Finally, if there is a problem in the closing of the deal, an Agent will drop everything to straighten it out.  Full service professionals have a wealth of experience in handling objections and solving problems both pre and post-sale. Solo Sellers may find themselves standing in front of a very steep learning curve that is interfering with their normal routines and responsibilities.

There is an old homily that says “The lawyer who defends himself has a fool for a client.”  If a doctor gets sick, the objective analysis of a colleague is likely to serve him better than his own subjective and perhaps emotional, diagnosis. Why then, would a homeowner want to sell his house himself?

Best Wishes for Success,

Peter