What FSBO companies don’t want consumers to know

York National Realty Inc. |

Real Estate Services Aurora Ontario

What FSBO companies don’t want consumers to know

In May 2011, the Competition Bureau filed an application challenging restrictions imposed by the Toronto Real Estate Board (TREB) on the use of data in the Toronto Multiple Listing Service (MLS) system. The Bureau sought an order prohibiting TREB from preventing or impeding the entry of innovative business models into the marketplace. The application specifically sought to prohibit TREB from imposing restrictions on companies and discount brokerages that demanded access to MLS data in exchange for a flat fee. These For Sale By Owner (FSBO) models offer seller’s the opportunity to list their properties on the MLS system without having to sign a listing agreement with a Real Estate Brokerage. In February 2014 the Federal Court of Appeal accepted the bureau’s application and paved the way for the entry of FSBO companies into the market.

Here is a list what sellers need to know before choosing to sign with these companies:

1. They charge upfront (in most cases thousands). Brokers don’t.

Listing with a Realtor does not cost you a cent unless there is a successful transaction and your house is sold. Realtors never charge upfront, only after results are provided.

2. They aren’t held to any code of ethics.

Realtors across Canada are held to a strict code of ethics by the Canadian real Estate Association CREA. They take liability if something goes wrong and are held to higher standards in conducting their business. They have duties to you as a client and to others that they serve as customers.

3. Selling homes is hard work.

Realtors often find themselves working for free and hoping to receive a commission. Consider this situation: A buyer is shown 30 houses over the course a month. The realtor spends countless hours to assist the buyer. If the buyer decides not to buy, the Realtor is not paid for his/her time and has lost money on expenses. This is a common situation.

4. They actually petition Realtors to sell their houses.

For sale by owner websites are now calling on Realtors to come to their rescue, so they can take credit for selling homes. This is really an admission of one thing – serious buyers use a Realtor. Why? Because they value the expertise and knowledge of an experienced Realtor and hire them to safeguard their single largest asset.

5. Some don’t have a real estate license.

Most sellers do not realize that “private sale” websites are just that. They are not licensed to trade in real estate or to give you real estate advice. They can’t even advise on a price your property. That requires a license. These parameters are set in place to protect you, the consumer.

6. You pay and end up doing all the work.

Since these companies are not licensed to trade in real estate they are not permitted to represent you in a real estate transaction. This means they can’t answer buyer enquiries for you, show your home, host open houses, handle paper work, mediate negotiations, advise you on market conditions…and the list goes on. Many frustrated sellers end up listing with a Realtor or pay high legal fees and ask their lawyers to assist in the transaction.

Today’s markets need experienced agents who work tirelessly for their clients. It takes expertise and well-planned marketing campaigns to get properties noticed above the thousands of others on the market. Remember that limited service will always equal limited results, and no one knows this better than the founder of ForSaleByOwner.com Colby Sambrotto who hired a professional Realtor to sell his condo after unsucessfully trying to sell it on his website for 6 months.