DIY home selling gaining popularity
Home owners choosing between full-service realtors and DIY companies
When Craig Thibault and Michelle Blinn moved in together, his three-bedroom home with grey siding in Plympton Station in southwestern Nova Scotia suddenly seemed a tad, well, crowded.
“We needed a little more space,” said Thibault. “Between the two of us, we’ve got four kids.”
In November, the couple bought another house only a few minutes’ drive away. They paid $105,000.
Not one cent of that went to a real estate agent or a do-it-yourself home sales company.
“There’s no sense in getting a realtor when you can do it yourself because you save money,” said Thibault. “(Realtors) take a big chunk of your profits, between five and six per cent.”
Now, the couple’s older place is up for sale. But it’s not on listed on realtor.ca or the Multiple Listing Service. There’s no slick sign on the front yard.
Just a Facebook post with photographs on Blinn's personal page.
It’s quickly led to three people coming to see the $37,500 house on its almost four acres of land even though the photographs clearly showed in March some of the home renovations were not yet completed.
It has helped the couple that they have roots in this community on the outskirts of Digby. Thibault’s uncle built the house they just bought. A lot of the prospective buyers who have come to see his old place are people he knows.
But even without those close personal ties, many people in both Canada and the United States are now choosing to sell and buy homes without the benefit of a realtor’s expertise or services.
In some cases, like Thibault and Blinn, they do it all themselves. Kijiji and Facebook are filled with free ads and posts of people selling their homes.
Others, though, turn to companies like PropertyGuys.com that offer many of the services traditionally associated with real estate companies, minus the actual selling of the house by a realtor.
“PropertyGuys charges a flat fee. In a small rural neighbourhood, it would be about $2,500 for the full service, us taking the photographs, doing the in-house consultations and bringing in all the related expert services,” said Walter Melanson, one of the co-founders of the company and its director of partnerships.
But how much does that save homeowners looking to do it themselves?
According to Canada Mortgage and Housing Corporation’s latest housing market outlook, the price of the average home in Atlantic Canada is expected to rise to about $213,600 this year.
The commission paid out to a realtor can vary greatly. Anne Da Silva, president of the Nova Scotia Association of Realtors, said those commissions can range from as little as three-quarters of a percentage point to seven per cent of the sale price. But a good rule of thumb is that a real estate commission will typically hover around five per cent.
When a five-per cent commission is applied to a house selling for $213,600, that results in $10,680 going to the real estate agent, broker and others involved in the sale of the property, not including the lawyer's fees.
By charging a flat fee for its do-ityourself service, PropertyGuys and other companies offer an option that can make selling a home thousands of dollars cheaper.
But it’s not for everyone. Going with a company like PropertyGuys means some of the services offered by a realtor are done by the homeowners and much more is done online, using smartphones and computers.
“If you don’t do e-mail and you’re not comfortable on the internet, then it’s probably not for you because we use the internet as a platform to do a lot of things,” said Melanson.
Do-it-yourself services also leaves the homeowners to show their property themselves. Taking time away from work to do that can be costly. It can also be frustrating when prospective buyers criticize what the current owners consider to be a dream home, the place where they’ve raised their family and built a storehouse of memories.
Certainly, real estate brokerages still hold the lion's share - roughly 90 per cent - of the listings in Nova Scotia.
According to Melanson that hold on the market is a sign the industry is broken and homeowners and homebuyers are in something of a rut.
“The way we know real estate today as a construct goes back to 1888,” he said “There are over 111,000 agents across Canada. So, everyone has a brother or friend who is a real estate agent. That trumps logic. That trumps savings. And that trumps best practices.” Not so, says Da Silva. According to her, people choose to go with a realtor because they recognize the value of the expertise and professionalism of someone who has taken the real estate licensing course and who regularly studies to stay abreast of developments in the industry.
“An individual homeowner will know if they have a water leak but they may not know, if they bought the house 10 or 12 years ago, that potable water standards have changed since then,” she said.
If a prospective buyer then comes along, does a water test and the results are bad, then that could be enough to scuttle a deal, said Da Silva.
“This in no way takes away from the knowledge the homeowner has, for example, of whether the floor creaks,” she said. “It’s about blending that knowledge with that of a professional.”
She also suggests the realtor's commission structure serves to motivate real estate agents to actually sell the houses they list.
“You’re paying for more than just marketing (with a real estate agent) but you do also get the marketing,” said Da Silva. “If the realtor does not sell your house, they still pay for the marketing but it comes out of their pocket so they are very motivated to sell your home.”