When time comes to sell your home, Canadians must decide whether to pay the higher commissions associated with listing their property on the Multiple Listing Service ( MLS ) operated by the Canadian Real Estate Association (CREA).
The typical fee for selling a home through MLS is about 5% of the home value. Since commission charges will result in thousands of dollars in fees, one must consider whether substantial savings could be made by selling your house privately.
CREA has numerous real estate members across Canada which started the data sharing service in the 1960’s before computer networks allowed easy access to the information. The MLS system allows agents from different agencies to offer properties for sale to their clients. The value of deals has grown from about $1 billion in the 1960’s to $132 billion in 2008. Based on an average 5% fee, this would generate about $6.6 billion income for real estate agents.
On a home selling for $500,000, is the vendor well served by paying $25,000 to an MLS agent? When considering whether to sell your home privately or listing it on MLS, the following should be considered.
Putting your home on the market at the right price is of paramount importance. Although you can scan your neighbourhood and check out listings over the internet, you cannot be assured that your house is comparable to those previously sold in your area. A realtor will have details of recent comparable properties and have a better sense of the pulse of the current market. This process also avoids pricing your home based on an emotional attachment you may have.
Selling your home will likely be the largest financial transaction that you will undertake in your life. Thus you may feel uncomfortable not being familiar with the legal responsibilities that are required. Legally you must disclose certain facts about your residence. Your lawyer can also assist you with these obligations.
A MLS real estate agent can also view the condition of your home objectively and make recommendations the can economically spruce up its appearance that can generate significantly more value for you. However, this service can also be obtained from individuals that can “stage” houses for a fixed fee.
Selling your home requires a great deal of time to hold open houses and give tours. Your personal time may be wasted on individuals that are not legitimate buyers. An experienced MLS real estate agent can assess potential buyers to determine their legitimacy.
MLS Listing your home on MLS provides the maximum exposure for your home. Not only is it made available to numerous agents, but with the internet, your home can be seen by thousands of potential buyers.
So there are a number of factors to consider before deciding to sell your home through MLS. Although saving commission fees is one factor, it is not the only determination one should make for such an import decision.