Ottawa For Sale By Owner, or FSBO, is the process of marketing, buying and selling of Real Estate without the representation of a Real Estate broker.
Many sellers who choose to sell via FSBO do so to avoid paying a commission to a broker, typically 6% of the selling price of the property in many parts of the US and Canada. Commissions can range between 5% and 7% in different markets across the U.S. as well as in Canada.
In most cases, the seller attempts to sell their property on their own to avoid paying the Ottawa real estate agent commission. This commission is generally six percent of the selling price of the home. Three percent goes to the agent that lists (sells) the home and three percent goes to the agent that represents the buyer.
While this rationale makes a lot of sense to the average person, it can often be difficult to sell one's own Ottawa home. At first glance the statistics below make it seem that one is likely to lose money by not using an agent. However an informed and determined seller can make a fair return by selling their own home.
History of FSBO
Long before the Internet, companies existed that assisted property sellers in selling their homes "by owner". These companies provided free computer matched listings and monthly magazines full of "by owner" listings. Their goal was to use aggressive advertising techniques to attract buyers and provide them with lists of "by owner" properties for sale.
As the Internet market grew, some of these "brick and mortar" companies expanded to the Internet, while other companies took advantage of the Internet by creating Internet Only services.
According to Google, there are over 75 million matches on the phrase "by owner".
From the 2004 National Association of Realtors Profile of Homebuyers and Sellers:
- 30% of homeowners attempt to sell without an agent, two-thirds are successful
- 24% of FSBOs stated that "getting the price right" was the most difficult part of selling their home
- The typical FSBO homes sold for about 13% less than an agent-assisted home sale. NOTE: This statement is misleading due to the fact that FSBO sales are more common in markets where homes are priced slightly below the national average.
Other statistics of note from the National Association of Realtors (NAR):
- One third of all FSBO sales go to a prior acquaintance
- One in four FSBOs end up going back to an agent or broker. Some statistics show that the number is more like 80% of all FSBOs that end up getting an agent... usually after 6-8 weeks. This means FSBOs can be easily discouraged. NAR stats show that the average home sale takes 3-4 months even with an agent.
- If you go FSBO plan on many agents contacting you trying to get your business. They will present you with much of this same information.
Ideas for a Successful Ottawa FSBO
- Determine the fair market value of your Ottawa home. Spend some money if you need to getting a list of comparable sales in your area. A kind real estate agent might provide a list for free. (They do it for buyers and friends routinely.) Listing your property too high will cause you to waste valuable time and get discouraged. Listing it too low might get it sold, but you'll leave money on the table. Get a FREE Ottawa Home Evaluation.
- Make sure to tell everyone you know (your sphere of influence) that you are selling your house. One third of FSBO sales go to a prior acquaintance of the seller. Do this AFTER determining the fair market value of your home. At the very least you might try this approach for a month or so prior to listing with an Agent, especially if you are undecided.
- Advertise your home. Any good Ottawa Real Estate Agent will spend money to sell your home in newspapers, publications, websites, on the MLS/IDX etc. An agent takes 6%. If you're saving that money, spend some on advertising. Don't rely on just a yard sign.
- Be prepared to negotiate with a buyer's agent. Possibly plan on offering them some commission. Make sure you know the value of your home and plan on possibly tense negotiation.
- Know the details:
- Details about your home (sq footage / lot sizes / restrictive covenants)
- Understand contracts, offers, acceptance etc. Possibly consult an attorney.
- Get all offers and counter offers in writing
- Make your prospective buyer get pre-qualified within a week so that you don't lose valuable time finding out they can't finance the deal.