For Sale by Owner leaves you feeling naked!!

I was watching one of my favourite shows yesterday; Dragon's Den.  Sometimes you see really great ideas and you know it's going to catch on.  Other ones...not so much!  A perfect example was one of the featured products on the show last night.  It's another for sale by owner gimic called Naked Realty.  The developer of the product was a man with no sales experience who saw the trend of the Duproprio and ComFree sites catching on.  His pitch was that being Naked in the market would be a good thing.  Naked without commission essentially.  And I'm sure he thought that having a few cute models appearing naked behind his signs couldn't hurt!  Kevin O'leary made him an offer to buy the company from him entirely for $150,000 but I highly doubt the deal will materialize after due dilligence.  It seems that at least one of his listings already on the site belongs to a man who has already sold his property through the MLS system!  It brings up the question whether all these sites are being totally honest with their statistics and testimonies!   I would like to insert a quote written by a colleague of mine (Heather MacDonald of Sutton Quantum in Mississauga who summed it up perfectly.

''His vision of being “naked in the market” is apparently a good thing – stripping away your professionals thus stripping away your cost of sales (commissions).  All good apparently.  Now the other side of the picture and shocking results after a little professional due diligence.

First the other side of the picture.  By “stripping away” professional services which are anchored by an understanding of the business of real estate and include but are not limited to:

  • Federal, provincial, municipal, and community compliance issues
  • Contract law and contractually binding agreements of purchase and sale
  • The past, present, and future of the housing market and ability to interpret statistics
  • Skills (the art and science) of valuing a property, negotiating a sale, and closing the deal
  • Deploying the right marketing, promotion, and advertising tools for the situation

now the Seller is truly naked in the market!  There you stand, alone, without the knowledge of the business, time, or skills to properly conduct this business or manage the ever present emotions.  In short, no one has your back.''

Everyone is under the impression that seeling a house is as simple as selling a microwave or a car on Kijiji or Craiglist or any of these other sites.  Don't get me wrong; I think these sites are great.  I sell used furniture and appliances all the time.  But when it comes to selling your home, it is slightly more complex!  And how can the average person not be persuaded by the potential of saving thousands of dollars!  I honestly don't blame people for being persuaded by the allure of such monumental savings.  The problem is; these savings are not always real.  The Duproprio ads boast that Eric and Chantal of Montreal sold their home and saved $14,000 in commission!  But, is it possible that they sold their home $18,000 below market value?  Sandra sold her condo in 48 hours and saved $10,000 in commission!  Is it not possible that if it had been listed with a broker and advertised on multiple sites instead of just a for sale by owner that she would have potentially had multiple offers and sold for more than the $10,000 difference?  Not to mention legal repurcussions if paperwork and due dilligance are not taken care of properly.  You can go spend the $1000 to list your property on one of these sites and there is no guarantee that your property will sell at all!  With a broker working for commission; you only pay if the property sells!  An abundance of buyers use brokers to help them search for homes (they want the comfort and ease of having someone help them do the research and the piece of mind of knowing that someone is looking out for their best interest).  If you go solo then these thousands of brokers working with tens of thousands of buyers are probably not even showing your home.  This is a huge piece of the market FSBO's are missing out on. If you have any questions or comments about the article feel free to call or email me.  514-217-6182 direct line,  Happy to help and keep you from feeling naked in the market!  To view the episode the link is below:

Dragon’s Den Season 7, Episode 3, Naked