You’ve probably heard of commission-free real estate options like Purplebricks or other For Sale by Owner (FSBO) services. Maybe the idea of selling your home yourself appeals to you or perhaps you’re enticed by the money you could save by not paying commission. Whatever your thoughts are about Purplebricks or other For Sale by Owner sites, they all raise a common question for homeowners who are getting ready to move out: “Should I use a Realtor to sell my home?”
Do I Need a Realtor?
More homeowners are electing to sell their home without the help of a real estate agent. For Sale by Owner (FSBO) sites can deliver great results for the seller that wants to be in control of their own property sale, but is Purplebricks the answer and is it really everything it has been made out to be?
Purplebricks (Formerly ComFree) has become one of the most popular FSBO sites in Canada. The service gives you the ability to sell your home and save money by cutting out the sales commission of the real estate agent. Purplebricks charges a flat rate which gives sellers access to a pricing strategy that puts emphasis on selling your home quickly. You get access to professional listing photos and a lawn sign, exposure on Purplebricks.ca, a public MLS listing on Realtor.ca and access to Purplebricks customer service.
You might be interested to learn that Purplebricks also gives you access to the help of a Realtor. That’s right: the person they ‘remove’ to save you money is still included in the flat rate.
Prices may vary based on your selling region, but for the entire package, you’ll pay about $3000 if you choose to sell in the Edmonton, or other locales in Alberta.
At first glance, $3000 may seem like a small price to pay if you’re saving the money for the commission on your sale, but as many commission-free sellers have realized, there are other costs involved when selling your own home.
The Real Cost of Purplebricks
You’ve given Purplebricks your money and you’re ready to sell your home. The ‘For Sale’ sign arrives, you meet with a pricing strategist, your photos are taken, your home is listed online… now what?
What some sellers may not realize before paying Purplebricks is you will be responsible for promoting and showing your home. Get ready to host showings, answer inquiry phone calls, plan open houses and more.
Yes, you will save some money on commission (perhaps not as much as you might think) and be in control of most aspects of the selling process, but now the responsibility is on you to get your house sold. You’ll need to be available for showings whenever a prospective buyer comes knocking. You’ll need to be ready to open your door to visitors during open house weekends. You’ll have to be prepared to receive, counter, and (hopefully) accept offers from buyers – some of whom might not even be pre-qualified to purchase a home.
For some, this can be an exciting prospect, but for others, you might be having second thoughts about this whole For Sale by Owner trend.
Fortunately, you can hire a Realtor to handle everything for you.
Find your own Realtor
Hiring a Realtor isn’t just easier than selling privately, it can also be the a more financially responsible decision. Perhaps the biggest misconception that sellers using Purplebricks or other FSBO services run into is the belief that they can save more money by ditching their Realtor. While this may be true for homes that are one-of-a-kind, the vast majority of houses for sale are not in this category.
Some National Association of Realtor studies have found that real estate agents secure prices that are, on average, 13% higher than private sales on similar homes. Taking those numbers into account, are you really saving money by cutting Realtor commission?
Surveys have found that upwards of 80% of buyers are turning to the help of a Realtor to purchase a home. Many private sellers forget that in a traditional sale (with Realtors involved on both sides), the real estate agents share the commission. You wouldn’t be paying commission to a selling agent in a private sale, but what about the buyer’s Realtor? Unless you’re willing to offer a percentage of your sale to the buyer’s Realtor, you could be looking at less exposure during the whole selling process. Ultimately, real estate agents are professionals that deserve to be paid for their time and effort – if you aren’t prepared to work with a buyer’s agent, your job as a private seller gets even more difficult.
During a home sale, a Realtor does a lot of work behind the scenes to make sure that any prospective buyer is both serious, and able to purchase your home. In many cases, private sellers come across interested buyers that aren’t pre-qualified for a mortgage… this means that the showing you had to leave work early for may have been a complete waste of time and money. Realtors will ensure that any interested buyer that places an offer on your home is qualified before you see any paperwork.
When it comes to selling your home, the best thing you can hope for is a bidding war – when two or more interested buyers drive up the offering price by competing with one another for the sale. Facilitating and mediating this process is an important (and at times, stressful) job that could mean the difference between thousands of dollars in your pocket, and thousands of dollars left on the table. A Realtor will negotiate the contract, manage a bidding war, and ensure that any legal documents are correct – something that you would have to take care of yourself if you chose to sell your home privately.
While Purplebricks does offer assistance with the negotiating process, the benefits of using your own Realtor with in-depth knowledge of the local market can’t be overstated. Purplebricks offers the services of Offer and Negotiation agents, and Home Buying agents. But what about everything else between the listing and offer negotiation steps? Without the help of a Realtor, these are things you would need to look after on your own.
The advantages to using a Realtor should be pretty clear, but perhaps one of the best reasons to hire a Realtor during the selling process is to protect your interests. You may have heard the horror stories that some private sellers have experienced: selling a home to buyers that weren’t qualified, having to carry two mortgages after a faulty deal, legal disputes with buyers after the deal has closed, faulty paperwork leading to hours of wasted time. When you hire a real estate agent to help you with your sale, you’re hiring a professional who can mediate any disputes when something goes wrong. A good Realtor will always have your best interests in hand giving you some peace of mind when it comes time to sell your home.
The Verdict…
Can Purplebricks work for you when selling your home? Yes, some sellers have great experiences with For Sale by Owner services, but that doesn’t mean it’s the best choice for every seller. If you want Purplebricks to work for you, you need to be able to invest the time necessary for selling your own home. You need to have the right home in the right neighbourhood in the right housing market, all to attract the right buyer. If any of these variables are not right, you could be looking at more money spent than you would ever have saved on a Realtor’s commission.
Unlike a Realtor, Purplebricks and other For Sale by Owner sites get paid regardless of whether or not you successfully sell your home. When you choose to work with a Realtor, you’re not just saving yourself time and stress by letting a professional take care of the sale, you’re getting the experience and know-how to make good financial decisions, get the best price and find the most prospective buyers for your home.