Can you sell your own house? You can. You absolutely can. And there are lots of services out there that will help you do it; some will even put your listing up on MLS for a fee as a mere posting, although they won’t do much to help you; most won’t take photographs, for example, or help you word your pitch. But here are some things to consider before you make that decision.
1) Do you actually know what information should go into a listing or the consequences of making even an honest mistake? I see For Sale By Owner listings all the time (we call them FSBOs) that have the wrong lot sizes, incorrect taxes, and incomplete information. Do you have access to databases that can give you correct information about taxes and lot sizes? We do.
2) Do you understand the extent to which you are exposed to personal liability? I see FSBO listings that say E & O (errors and omissions) excluded. Nice try. Realtors are required to verify all information; FSBO owners often fly by the seat of their pants.
3) If a buyer wants to make an offer, are you going to prepare it? I’ve seen that happen in a private sale. The offer had no clauses for home inspection or financing, nothing to protect the buyer, or seller, for that matter, if those things fell through. Do you know what time frame to put in for an irrevocable? Do you know what that is?
Maybe it will be the buyer’s lawyer who prepares the offer. Will that lawyer sit with the buyer and seller to make sure they complete the offer correctly? Not likely: they can’t represent both parties. We can.
I recently saw private sale documents where the lawyer prepared the offer. It had blank spaces for the buyer and seller to fill out. The buyers and seller signed in the wrong spots and left some of the blank spaces blank. The irrevocable period (the time for acceptance) wasn’t met; technically, the offer was invalid.
5) Who’s going to do the negotiations? You? Are you a trained negotiator? Your lawyer? Good luck with that one; most lawyers won’t do it; they’ll only review the paperwork.
Do you have access to all the comparable sales in your neighbourhood? Have you considered your alternatives, your bottom lines, theirs, how to improve your negotiating position? Most of the time the private seller has an idea what nearby homes were listed for but doesn’t know how long they were on the market, has no idea how to adjust for improvements, doesn’t know the lot size of the comparables or their original sale price, and doesn’t know what they sold for. We do.
6) Do you know what period should be in the offer for title searches? Do you even know what those are or why they’re important? Do you know how to deal with a counter-offer if one comes in after the inspection? What about spousal consents – do you know when they’re required? Do you know when or if HST should be included in a sale? Do you have any idea of the consequences if your buyer is a foreign resident or what to do? Would you even think to ask?
7) Do you know if your hot water tank is owned, rented, assignable etc? A lot of owners think they own a tank that they rent. Any idea what the liability is if you’re mistaken? (Hint: it can be costly.)
8) Do you know what the rules are for disclosure of latent defects to a buyer or what these are and what your legal obligations are in providing information? Any idea what the consequences are if you don’t disclose stigmas? Do you even know what those are? Do you know about UFFI and asbestos, or what the testing periods are for radon, or what a reasonable clause is for a buyer to ensure a well or septic system are properly tested? Do you know if you have knob and tube wiring or aluminum wiring or why that’s important?
9) Do you know the difference between chattels and fixtures, exclusions and inclusions? What about the shed in the back yard, the pool, your mirrors, grandma’s chandelier? Are they in or out if you forget to mention them in the deal?
10) Finally, do you know that banks rely on MLS listings when they’re determining the buyer’s eligibility for financing? If you’re engaged in a private sale, your buyer may have a hard time getting that financing. Do you how much time is reasonable for them to find out? Do you know what happens if a deal falls through over financing, and who gets to keep the deposit?
Hmmm. I thought not. That’s why we’re trained, updated, licensed, regulated and insured. That’s why over 90% of the “sale by owner” properties end up back in our hands when they don’t sell or the deals fall through. By then, they’re stale-dated and harder to sell without price reductions.
Yes, you can sell your house yourself. But should you?