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Is FSBO a Good Deal For Canadians?

by PJ Wade

Canadians who decide to go FSBO (pronounced “fiz-bow)-- that’s for sale by owner -- don’t always realize that because they are selling one home just once there will be a disproportionate amount of work involved. These property owners must create the equivalent of a mini real estate brokerage while they educate themselves in the essential elements of real estate transactions and relevant Canadian and provincial laws.

FSBO may seem an attractive approach when the local real estate market is hot with buyers, or if you have a unique property in a highly desirable location. But be ready to work hard and smart to take full advantage of opportunities and to avoid legal problems that could cause the deal to fall through at the last minute.

Whether your FSBO plans include promotions on Canada’s eBay.ca ] or advertising support from a marketing firm, stay committed to doing a thorough professional job. Research marketing approaches, the ideal list price, competing properties, negotiating strategies and contract preparation, just to name a few crucial items. Gathering this information will pay off in the long run and possibly help you escape legal snafues along the way.

Before you go solo, check out the Multiple Listing Service (MLS), research a few local real estate brokerages and interview several real estate professionals to see what you’ll be missing. Ask how listing your property would save time and hassles while making you the same or more money in the process.

The major short-coming of selling your home yourself is that you have no one to blame if things go wrong and no one to fix the deal if it starts to fall apart. If a real estate professional overlooks something essential, does not fully anticipate circumstances relevant to your situation or misrepresents the property to the buyer, the law holds the salesperson and brokerage legally and financial responsibility.

Real estate professionals must have housing information at their finger tips, but they are paid the big bucks for their legal or fiduciary responsibilities and their knowledge. Real estate salespeople and brokers work under agency law, a body of common law that also governs lawyers and other professions. The legal duties of agency put strong responsibilities on real estate professionals:

they must put the client’s interests above all else but thelaw;

they must obey the client’s instructions but must go beyond those instructions to ensure issues beyond the client’s knowledge are anticipated and taken care of;

they must be competent and up to date in every aspect of the real estate market, generating offers, closing transactions and legal complexities, and use that knowledge to help clients achieve their goals; and

they must account for all monies involved in the transaction.

If you remain sold on FSBO, you’ll find a tremendous volume of online real estate information. If you prefer your essential facts served in print, there are books galore, including the Ontario Real Estate Association’s Real Estate Encyclopedia-- more than1000 pages of facts, figures and the inner workings of real estate. The current information explosion may make us all feel like instant experts, but problems arise when we underestimate the importance of the difference between gathering information and having knowledge.

Selling a house or condominium unit may look deceptively easy to the onlooker. For instance, real estate professionals advertise homes for sale and run open houses primarily to generate business leads for themselves and their brokerage, secondarily to raise the profile of the brokerage and, finally, to market the property concerned. What will you do with the leads that your advertising and open houses generate? Fielding calls from prospective buyers and idle curiosity seekers requires an investment of time and effort that makes sense to a professional who will convert these leads to sell other MLS properties, but what about you?

Although you can prepare an information sheet that summarizes physical details, legal aspects and features of the property and serves as a precaution against a later buyer claims of “foul,” there is more involved than producing a flyer on your PC.

Keep in mind that the online information explosion is a two-edged sword. Buyers are self-educating and know if they buy a FSBO the seller is saving thousands in commission. Savvy purchasers will probably expect your sale price to reflect this saving. That means you may do all the work yourself, shoulder all the responsibility and still not be substantially ahead financially.

Published: October 1, 2002

Use of this article without permission is a violation of federal copyright laws.

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Futurist and Strategist PJ Wade is "The Catalyst" -- intent on "Challenging The Best Become Even Better." PJ earned this title by translating the dynamic impact of Boomers and their multi-generation families into relevant insights that start people thinking and taking action—in business and in life.

Author of 7 books and more than 1600 published articles, PJ encourages individuals to become their own futurist. PJ writes and speaks about the insight, knowledge and solid decision-making skills that professionals and their clients need to live and work in this vortex of change. For instance, since PJ knows that home is headquarters for the new decades-long "unretirement," she wrote the popular book "Reverse Mortgages: Best Friend, Worst Enemy... Your Choice! (CatapultPublishing.com), which is filled with suggestions and insight on protecting and using home equity. Her new business book, "What's Your Point?," which identifies 7 common mistakes professionals unknowingly repeat to their detriment, will be published in 2009.

As The Catalyst, PJ provides strategic communication, client appreciation and advanced education services to the financial, tourism, lifestyle and service sectors -- and the clients they serve. A frequently-quoted financial and business commentator, PJ is a thought-provoking strategic speaker who offers practical, real-life suggestions on leaving "the box" behind and embracing Forward Thinking -- a talent she regularly demonstrates in this column. For more on blogs, books and topics, visit TheCatalyst.com.

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