The best way to save money when selling your home
New MLS® rules allow for a REALTOR® to do what is referred to as “mere-posting” a listing onto the local MLS® real estate board. To do this, they will often charge a nominal fee (probably around $500). The idea is to allow people to market their properties on their own (For Sale By Owner) and do all of the work themselves without using a high-commission agent.
To be honest, this is a good thing. It gives consumers more choice, which they previously did not have in the real estate industry. With these new rules, there are 3 viable options for people thinking of selling their home:
Option 1: Use a traditional high-commission agent or company
Using this option, the agent will place your property with a local real estate board that operates on the MLS® system, and provides you full service real estate. Depending on how much your property is worth, this can cost you a fair amount of money. Although this cost varies across the country, using a traditional agent or company to sell a $500,000 home can typically cost $25,000 (assuming 5% commission) in Ontario.
Option 2: Sell it through One Percent Realty
One Percent Realty provides full real estate services at a discount commission rate of only $7,950 for all homes under $700,000. Included in that fee of $7,950 is a flat fee going to the real estate agent that represents the Buyer. Houses over $700,000 are 1% + $950. This means, using the same example above, it would cost you $7,950 to sell the same $500,000 home - with all the services and exposure that you would receive from the traditional higher commission companies/agents. This means you receive the same services, including signage, open houses, handling showings, negotiations, paperwork, and complete MLS® exposure, as you would from any full service real estate company.
In short, the services are the same as Option 1, but for way less money.
Option 3: Sell it yourself/For Sale By Owner (FSBO)
As mentioned earlier, you can now put your home with a local real estate board that operates on an MLS® system, and have your home exposed with other listings and deal directly with the public or REALTORS® who may show your property. Although you won’t be using an agent to sell your home, you will have a reasonable chance of dealing with a buyer’s agent since you will have your home listed on an MLS® system. These buyers agents expect to be paid. Most likely, they will be looking to the Seller to pay them, usually at least half of the fees discussed above (the $500,000 home scenario). So, using the same example of selling for $500,000, a buyer’s agent in Ontario will often expect to receive approximately 2.5% (or $12,500) to sell your property, plus an additional $500 upfront listing fee to the company used for listing your property on MLS®. These companies may also charge a success fee if you sell, or at least try to upsell you for additional services.
In the end, you would be looking at paying approximately $13,000 dollars to sell your home privately/FSBO. So if you can have the full services of a professional salesperson for only $7,950, why would you not just leave it to a professional?
Selling your home privately will be a lot of work. So why not let a professional, licensed salesperson help you sell, while still keeping more money in your wallet?
Questions? Want to learn more? Please contact me, whether by email, text or phone call. I look forward to helping answer your questions, and assist you with your real estate goals.