Why should you use a real estate agent? Many people today feel that 5%-6% commission, which even in PEI real estate terms, with lower housing costs can still easily mean $10,000, is too much to pay for what appears to them to be simple, straight forward job.
Add to this that most real estate deals begin on the internet and vendors begin to think that they should be able to handle the job themselves and there are many FSBO agencies that are telling them that they can - of course with the FSBO company's help and the matter of a fee! There are two distinct areas that should be considered when contemplating - should I engage a real estate agent? The first is marketing and the second, legal considerations.
While anyone can post a few free ads on the classified sites, is this really the answer to finding a buyer. Certainly you will get a few enquiries, but is this the approach that gets the best offer? Even from the point of view that most real estate deals start on the internet, not all internet sites are created equally in terms of traffic targeted to the purchase of real estate. Realtor.ca, which is the MLS website and boasts information and pictures on almost all homes for sale with the exclusion of FSBOs and exclusive listings, which are becoming increasingly rare, offers one-stop home shopping and it is a must that your home appear on this website. FSBO companies will also have there own websites, but there is no FSBO website that covers all the properties that are for sale by owner the way that realtor.ca covers all the properties to be found listed by realtors. For a moment stop being a seller and think like a buyer (because you probably will be one if you ever sell your home), would you rather go to one website and do a search based on your criteria and see all applicable results or would you rather look through FSBO sites in the hope of finding what you are looking for. Would you rather arrange your own viewing with each owner or have someone else arrange times that suit you. Are you beginning to see what I mean? Oh, but you say, I will surely get a better deal if I find a FSBO. Well not if the owners are trying to achieve the same thing that you are i.e. keeping the commission. Even if the vendor says they will reduce the price by 3 percent or so, how do you really know what the house is worth and that you are actually getting 3% off the true market price as you have no professional to help you evaluate the home. Realtors use comparable sales to develop a market analysis of the value of a property, but as a FSBO client you will not have access to this information as it is available through MLS only to licensed realtors.
However there are other reasons to use a licensed real estate agent when selling your home. Selling a home is more than just finding a property and a buyer. There are legal issues that make using a PEI real estate agent a prudent action. Real estate deals can go "bad" and result in claims and lawsuits. If you go it alone, you are alone to defend yourself and actions. If a real estate agent makes an error they must have by law errors and omissions insurance. Being insured, when a real estate agent makes a mistake the injured party may sue the realtor knowing that there is money to pay damages. Remember that if you are the seller you may have to defend an action brought by your buyer and pay the legal expenses of your defense even if the action really has no merit.
Professional real estate agents understand the risks posed in real estate and through education and training in risk reduction can protect of your interests. When problems arise, an experienced real estate agent knows how to identify the real problem and address that problem keeping a deal from going "off the rails". The real estate system that is in place today, your local real estate boards, the member agents, errors and omissions insurance, and MLS and realtor.ca are there to make your real estate transaction fast and safe. Real estate commissions may seems a little pricey, but in terms of getting a home sold at the best price, and without incident, means that it is money well spent and remember there is no cost if an agent does not complete a sale.
**(The comments contained in this article are for information purposes only and do not constitute legal advice.). by Arvind Prakash Sharma
