Area of Law: Real Estate Law
Answer # 404
Do you need a Real Estate Agent to sell your home?Region: Ontario Answer # 404
Selling a home can be done with or without a real estate agent. Though most sellers prefer to rely on the professional services of a real estate agent, there may be benefits to selling your home independently.
Commissions paid to realtors can vary from about 3% to 6% of the selling price of a home, and from about 2% to 10% for commercial properties. Selling your home without the assistance of a real estate agent could save you a substantial amount of money. Although you will have to cover your own advertising costs, they may amount to much less than the commission payable to a real estate agent.
Despite the cost savings however, selling your own home can require a large amount of time and effort, and you may not end up getting as high a price for your home as you might if you use a real estate agent. You will have to organize and co-ordinate all advertising and showings of your home, and it will generally take longer to find an interested buyer. Some prospective purchasers will feel uncomfortable viewing the home with the owner, and may not be open with you about things they do not like about the property. You may also find that buyers will want you to lower your sale price because they know you do not have to pay a commission to a real estate agent. In addition, sellers will not have the benefit of a trained professional in regard to potential liability issues.
Selling your home through a real estate agent, though more costly, has a number of benefits, including:
- They usually have the expertise and resources to determine the fair market value of your home.
- They have access to a wide pool of prospective buyers.
- They can guide you and advise you regarding real property issues that need to be addressed in your agreement.
- They can help you prepare your property for sale.
- They can negotiate on your behalf.
If you are interested in a reasonably quick and hassle free sale of your home, you should consider the services of a reputable professional real estate agent.
Multiple listing agreement
Selling your home with a real estate agent will generally involve signing a listing agreement. There are two main types of agreements. These are Multiple Listing Agreements and Exclusive Agreements. Most people use multiple listings. With a multiple listing agreement, all member agents of the local real estate board will receive information about the listing, and will be entitled to share the commission if they bring a purchaser to buy the property. This is usually the most effective way to sell a home. However, the commission payable to the real estate agent for a multiple listing will be higher than the commission for an exclusive listing.
Exclusive listing agreement
An exclusive listing agreement means that your home will only be offered to prospective purchasers through the company with which you list. Other agents are not automatically entitled to a commission if they bring a buyer, unless your agent agrees to cooperate with them. Although it may take longer to find an interested purchaser, the commission payable to your real estate agent will usually be lower than for a multiple listing.
Your decision to sell with or without a real estate agent will usually depend on how busy you are, how quickly you need to sell your home, and how good your own marketing skills are. If you do decide to sell your home without an agent, a real estate lawyer can assist you to review ‘offers to purchase’ and draft any counter-offers.
If you are buying a home and want to know how much of a mortgage you qualify for, use the Scotiabank mortgage calculator .
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