Experience: Worth its Weight in Gold – Literally!
Last month, I had my first, up front & personal experience with a For Sale By Owner (FSBO) who had paid a real estate company just to list their ad into the Toronto Real Estate Board website. With the laws that passed last year, “the public” can now have their houses listed on the website that had traditionally only been available to licensed Realtors®. There are a whole bunch of concerns with this new “open” policy – that’s not what I am going to talk about; what I want to share, is my negotiating experience with the “For Sale by Owner”.
My buyers, who had signed a Buyer Agency Agreement with me, got the FSBO listing automatically when there was a match between the listing and the criteria I had set up for this buyer. When they notified me that they would like to see the house, I pulled up the listing and noticed that I had to deal directly with the sellers. What made this even more interesting was that I knew the sellers! I had worked with the husband for many years, but had lost touch when we both ended up leaving the company around the same time, about 10 years ago.
After the small talk, the husband, wife and I reviewed the offer. It is important to note that under a Buyer Agency Agreement, I am legally bound to do what is best for my buyers – aside from breaking the law! A document called “Confirmation of Co-operation and Representation” explains everyone’s role and the fees associated. I explained my buyers’ offer to the sellers and sat back while they had a brief conversation – they then turned to me and asked for my advice!
The offer included a condition on sale of the purchaser’s property, which the sellers had no way of knowing whether or not the buyers’ house was going to be priced competitively; I had included a clause that allowed their lawyer to look at the document before it became final, but a lawyer would have no way of knowing whether or not the “backup” house would sell. Plus, it was the weekend, so the lawyer was not available to give his advice.
The sellers decided to counter the offer with a higher price, but left the other conditions as they were initially set out. My buyer countered at another price and the potential deal fell apart as we were not able to come together on price. The next week, I got a call from the sellers saying that they would accept our last offer, but by then, my buyers had moved onto another house and were no longer interested.
I have heard people complain that Realtors® try to scare people out of going the For Sale By Owner route. Personally, I like working with people who have tried to sell their house on their own – they have a greater appreciation for what Realtors® do, or can do, when necessary. This story isn’t scary, no one got sued, no one ended up inadvertently owning 2 houses, this story is simply sad. A really nice couple could have had their house sold quickly, for a reasonable price, but due to their lack of experience in this business, they missed out.