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Selling your home online

By Fiona Wagner

When Rhonda Crausen and her husband, Chris, decided to sell their 5-year-old home in Guelph, Ont., they knew they'd do it themselves even though they'd never sold a property before. "It hurt us to see a Realtor getting all the money," says Crausen. "We thought we'd try it first [and if it didn't work], then we'd give our money away to someone else."

After putting up their own for-sale sign, bought at a hardware store, a visit from the couple's local PropertyGuys.com franchise owner convinced them to try his For Sale By Owner (FSBO) services. A few hundred dollars bought them a professional lawn sign that directed interested buyers to an Internet listing complete with photos and a detailed property description. Four open houses later, the house sold for its asking price, netting the couple $15,000 in saved commissions. Not bad for two and a half weeks of work.

What is FSBO?
For Sale By Owner is a term used to describe real estate transactions that are brokered without the help of a real estate agent. With the national sale price for a home averaging almost $285,000 and realtor commissions costing five per cent plus GST, going the DIY-route can mean significant savings.

"The most attractive aspect of selling yourself is you take on the role of the Realtor and pay yourself their commission for promoting your property," says Michael Lawrence, marketing director for PropertySold.ca. "If your house sells for $300,000, that's $15,000 that you can put straight into your pocket."

That's not all. Being your own agent means you maintain total control of the sale. "You can schedule appointments when you want, change the pricing if you want -- things you can't do if you sign a contract with an agent," says Walter Melanson, director of partnerships for PropertyGuys.com.

While marketing methods for private home sales were once limited to yard signs and newspaper ads, the Internet has changed the way buyers search for properties. According to the U.S. National Association of Realtors, 77 percent of buyers in 2005 used the Internet to search for a house, up from only two percent in 1995.

While approximately 85 percent of all home sales in Canada are initiated through the Multiple Listing Service (MLS), a proprietary database of online listings reserved for sellers working with licensed agents, FSBO websites are quickly gaining exposure and popularity. For example, PropertyGuys.com reportedly logged 27 million hits from more than 200,000 unique visitors this past June.

With this kind of online competition, it's no surprise that agents are quick to dismiss the FSBO way, arguing that selling real estate online is not like selling a car, and private vendors don't have the experience or market knowledge to value and price their homes properly, the time to file ads, arrange viewings and complete paperwork or the network to connect with potential buyers.

Not true, argues Lawrence, Melanson and dozens of other national FSBO marketing and service sites such as ByTheOwner.com, CanadianHomes4Sale.com, FSBO.ca and Ottawa's Grape Vine Home Marketing Consultants, which offer people the exposure and tools needed to sell online successfully.

"There are 100,000 agents in this country telling us we can't do it," says Melanson. But people are doing it: the Canadian Real Estate Association reports approximately 25 percent of real estate transactions are completed without a real estate agent. "If you've got the skill set to talk to people, make yourself available and follow a system, it can be done."

How it works
Each website offers different marketing packages based on the level of support required by the vendor. The most basic packages start at about $50 for a web listing with either text or text with photos, while premium packages priced at about $700 include a market evaluation of your home, in-home consultation with a licensed real estate broker as well as open house and for sale signs. Other perks include yard signs, telephone support, information on how to value your home or prepare it for sale and templates for legal documents.

While these services provide the tools to sell your home, there are some steps you can take to get the most out of your FSBO experience.

  • Be professional. They key to selling privately, says Lawrence, is getting exposure for your property. While you shouldn't overlook traditional methods of advertising, such as newspaper ads and flyers (anything that directs traffic to your online listing increases the possibility of a sale), yard signs are the next largest source of information for interested buyers after the Internet. The more professional-looking the sign, the better.

    "Research shows that buyers prefer to engage with a seller that has an appearance of a systematic approach," says Melanson. While a handwritten sign might advertise that your home is up for sale, buyers might question how serious you are about selling.
  • Be patient. According to ByTheOwner.com, FSBO vendors have a 55 percent to 75 percent success rate and sell their homes within 60 days. This compares favourably to real estate agents, who have an average success rate of 60 percent and sell within 45 to 50 days.
  • Be prepared. Make sure your home is in good showing condition and priced competitively (search for comparable listings or hire a professional appraiser). Then, familiarize yourself with the selling process. Know what you are responsible for (promoting your home, making appointments, negotiating) and what you're not (closing the deal). Retain a lawyer before you start the process. He or she will review the offer, guide you through the paperwork and make sure you're covered legally.
  • Be open-minded. Even though you're advertising a FSBO sale, you're going to get calls from more than just private buyers. "You should be flexible and allow negotiations with a buyer agent," says Lawrence. "You're still going to get the price you want but instead of five per cent commission, you can bargain for two per cent, one per cent or a flat fee."

And remember, you can always retain the services of a real estate agent if you find the FSBO method isn't for you. "I would definitely suggest you try it," says Crausen. "What have you got to lose?"

Fiona Wagner is a freelance writer in Georgetown, Ontario.



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