I’m the guy you see standing quietly at the back of the room at a party. You silently wonder to yourself “who’s that guy? … what’s he doing here?”. Ordinarily, I’m happy to be that guy, but today I’m the guy that’s selling a house privately and I find myself heading toward the front of the auditorium, mounting the steps to the stage, and taking my place behind the podium to tell you about the experience.
There’s an old song that I have stuck in a part of my head with lots of cobwebs. It goes something like “Anything you can do, I can do better…” This seems to be the philosophy of both the private and “professional” real estate market. Perhaps I’m a bit too much of an optimist at times, but can anyone tell me why can’t just all get along? Yes, you at the back there?… right.. yes, I forgot – there’s money to be made here.
Let’s look at the licensed professional real estate agents first. For starters, these people aren’t “agents”. The definition of an “agent”, according to the Real Estate Encyclopedia [Copyright Oct. 2005, Ontario Real Estate Association, ISBN 1-894726-30-8] reads as follows:
“One who is authorized by a principal to represent that principal in business transactions with another party. An agent acts on behalf of that principal as an extension of that person, and can bring that principal into legal relationships with others.”
There are about 6 pages in this same book that discuss “Agency” and “Agent”. To give you a quick overview about the process and laws in Ontario, Canada, when you enter into a listing or buying agreement, your agent is the broker – the one running the brokerage firm. The person you’re usually dealing with – the one typically referred to as the “real estate agent” – is properly called a “Real Estate Sales Representative”. Yes, that’s right… you’re dealing with a salesperson, not anyone with special legal powers. Although technically, they aren’t “agents”, this is how they’re known to most people and I’ll continue to call them “agents” to avoid confusion.
Many people think that there’s something magical about a real estate transaction. Let me tell you that there really isn’t. You don’t need a real estate agent to sell a house, nor to purchase one. You do, however, need a lawyer (a notary might do in some areas). Many real estate agents claim that they’re the ones protecting your interests in the real estate transaction. While this may be true to a limited extent, it’s the lawyers that should (and usually do) protect the interests of the buyer and seller. Although there’s little explanation why their fees afford them a house twice the size of yours, you can at least sue them if they don’t do their job to protect your interests.
There are good and bad real estate agents, and I’ve met many of both types. The good ones are entitled to make money just as anyone else in this country. In fact, I found Siebren and Angela Boersma to be particularly knowledgeable and helpful (enough to give them a free positive advertising plug here), and would have probably listed with them had I not decided to list privately.
The issues that I have with some of the the not-so-useful agents are:
- Low quality service (late for appointments, flat out lying, divulging private client information)
- High commission fees (at 6%, the seller pays over over $12,000 to sell a $200,000 house)
- False or misleading claims (“in my opinion, you could….”, “I don’t think it would be a problem to…”)
- Those that respond negatively to an offer of a 1% referral commission on private sale (Really, who turns down $2000 for very little work? There’s lots to say about this one so I’ll try to talk more about it one in a later entry)
Enter the private sale marketing firms like ByTheOwner.com, PropertyGuys.com, and in this area one called GreyBruceListings.com – which appears to be a division of OntarioPLS.com. Before you guys thank me for the free plugs, you might want to read on. I have both good and bad things to say about you too!
For starters, I think it’s great that there’s a cost-effective alternative to organized “big real estate”. It’s just that the private market is just a bit too unorganized for my taste. In this area, two of the top private sale marketing firms are duking it out for my business. “Those guys” tell me “we get 52 million hits to our web site every month”, and the other “B.T.O. firm” counters with a spreadsheet from comScore.com showing rankings of “unique visits per month” – the home team with 559 and the “other guys” with 186. With a bit of back-and-forth, the “other guys” attribute the traffic to the Quebec affiliate DuProprio.com – operating primarily in the province of Quebec, not Ontario.
To try to keep from repeating myself, I’ll say it once here with some emphasis: THESE NUMBERS MEAN NOTHING IF I CAN’T COMPARE APPLES TO APPLES!!!
I understand that there’s a ton of money to be made here. Already the private firms have “stolen” a huge share of the real estate sales market from organized real estate. There’s a place for full-service organized real estate for people that can’t or don’t want to take the time and effort to sell their own homes. But most people have enough intelligence and time to sell their own homes.
Right now, the biggest asset that either of these camps have is their infrastructure. Organized real estate has their impenetrable fortress of a web site, www.MLS.ca (“MLS” being a registered trademark of the Canadian Real Estate Association). What I wouldn’t give to have unlimited access to the wealth of historical sales information that’s locked up in their database. But to have any access to this information, you have to a) be a registered real estate “agent” and a member of the local real estate board, or b) be working with a real estate “agent” who stands to receive commission should you buy or sell your house with or without them.
Things are similar over in the private market camp. They, too, have their databases filled with information on where properties are located, the IP addresses of people who looked at various properties (showing migration trends), most likely the sale amounts, time on market, and a variety of other useful metrics that are unavailable to the public.
So, maybe I should stop rambling and get to the point of my rant. Separated, all of this information is just as useful as the conflicting traffic statistics I’ve been given from two separate private marketing firms. An accessible, consolidated private-organized real estate database, would be so much more in the interest of the actual people buying and selling real estate. This, as opposed to the current primary beneficiaries – private real estate marketing firms and licensed real estate brokerages.
My home has only been for sale for about a week now, so compared to the average time on market of 3 months in this area, it’s “just listed”. I’d like to use this blog to share my own experience with private sale, as well as help others through the process with whatever information I can reasonably offer. So, check back regularly or subscribe to feeds. Together, we might just start a revolution. Hell, many a revolution started over a few beers at the pub….
Like any good marketer knows, any opportunity to be seen is a good opportunity. So I welcome you to take a look at our home for sale at www.PropertyGuys.com. Had a look? Leave me some feedback with your thoughts on the listing. What did you like? What turned you away? Want to make an offer?
