Why do we, as BC Notaries and lawyers, care whether you do this work yourself or not? Because it is sometimes difficult, or even impossible to fix problems with private deals; the damage is done by the time we get the file. Using a Realtor makes life go more smoothly for us as well as you.
You might be surprised to realize that your legal and other closing costs will go up (sometimes significantly) with a private deal. As BC Notaries, we spend more time with clients on a private deal than we do on a Realtor-involved deal. On a simple, well-written private deal, we might add another hour of staff time and our time over and above the usual work we do for you, but on a badly written private deal, you might be dealing with hours of time and costs for specialists such as inspectors, appraisers, mediators or litigators.
The potential for those increased costs may or may not be enough to convince you to use a Realtor; but if that doesn’t do it, consider the amount of time you will have to put in as a private seller. Realtors spend an incredible amount of time with their clients dealing with everything from staging your home properly to contract drafting. That time investment requirement may be more convincing to you of the value of a great Realtor.
Aside from the increased closing costs and time spent, here are five really important reasons why we would like you to consider using a Realtor for your sale or purchase, rather than doing it yourself.
You might get yourself into legal difficulties
Aside from their marketing know-how, Realtors go to school to learn how to draft contracts, and they take continuing education courses to make sure their skills and knowledge base are up to date. Realtors also have great mentoring systems in place to make sure they have guidance for tricky situations.
If you have drafted your contract of purchase and sale yourself, we will do our best to carry out the terms of that contract for you. And as good as BC Notaries and lawyers are, it’s not always possible to save a flawed contract.
A Realtor is strongly recommended unless you really and truly know how to properly deal with the following issues:
- knowing which charges can stay on title to the property, and which ones you will have to clear from title
- the essential legal elements of a contract
- how PST, GST, property transfer tax, non-residency tax and property tax affect your transaction
- how to tell if you have a void, or a voidable, contract
- the legal issues involved in deposits
- how to structure the dates on your deal
- why the phrase “subject to financing” is dangerous for sellers, but fantastic for buyers
- how to manage competing offers
- how to manage a collapsing deal
- why holdbacks are a nightmare
Each of these issues can cause significant problems in your transaction if you don’t know how to set them up properly in the first place. Your Realtor knows how to avoid these traps – take advantage of that knowledge.
You will have questions
It’s a “buyer beware” system in BC. This means buyers need to inspect the property they are considering buying, and ask all kinds of questions. If you are buying, do you know what to ask of a seller? If you are selling, do you know what you have to disclose to potential buyers? Your Realtor certainly does.
Unless you do this on a regular basis, you are going to have all kinds of questions about the process. Real estate law changes regularly, and you might be surprised by some of the issues that we now have to deal with.
For example, did you know that if a seller is a non-resident of Canada, the buyer of their property has some fairly serious obligations with respect to the seller’s tax issues? Yes, you read that right – the buyer has to get involved in the seller’s personal taxes for that property.
If you are a non-resident seller, the buyer has to hold back up to 50% of the sale price of the property until you have obtained the right paperwork from Canada Revenue Agency. If you don’t get that paperwork within the right time-frame, the buyer is required to remit that money to Canada Revenue Agency for it to hold until it sorts out how much tax is owed.
You can certainly ask your questions of us, as your BC Notary or lawyer, but that will add more time and cost to your bill. And we won’t be as available as your Realtor will be.
You might miss marketing opportunities
For example, many owners still think that they need to have an open house. But open houses are now becoming less and less relevant as a marketing technique. People can look at pictures online, and even watch videos or walkthrough tours on the internet. There is less and less reason now to do an open house. But if you don’t know that, you might waste a significant amount of time trying to organize one.
Do you know what comparable properties are selling for in your neighbourhood? Do you know what your BC Assessment value is and where your sale price should be in relation to that value? Do you know how to take into account work that needs to be done on your property, or how to price your property appropriately for the market?
You might also not know where to advertise, or what kind of advertisement to use. Do you know how to get your property listed on the MLS listings? Do you know which of the private listings websites get the most traffic? Do you know the relative effectiveness of print ads versus online ads? Do you know how to structure an effective on-line ad?
Realtors do this work every day. While you might be able to rely on selling your house privately more easily in a hot market, your Realtor still provides quite a bit of value there – they can set you up for multiple offers, and manage those offers for you. They also know how to price and market your home in a slower market.
Your Realtor knows people
This is one of the ways your Realtor is going to save you some time. Your Realtor knows all kinds of people who can help you make your transaction go more smoothy – house stagers, cleaners, inspectors, mortgage brokers, financial planners, BC Notaries, lawyers…. They will have learned from experience who is great to work with, and who to avoid.
So when it turns out that your septic system is not working properly, your hot water tank dies, your renters have put a grow-op into your shed, or your basement is flooded, your Realtor can help you decide how to deal with those problems, and who to call for help.
You have better things to do
Being your own Realtor is a huge job. You likely won’t have the time to do it properly. And while you might not think that will be a problem with a hot market, because sellers are lined up outside of your door to buy your property, you can’t rely on the market to sell your home.
One of the challenges with private sales is that you, as the seller, will have to deal with all of the “looky-loos”, the demanding buyers, the late night “can I drop by and check out the place now” calls, and the unexpected drop-ins. Some buyers are specifically looking at private sales because the may be able to take advantage of an unsophisticated seller. Do you know how to deal with these problem people?
When you decide to move, there are so many things to think about: repairing, cleaning, decluttering, packing, staging your home, ending auto-debits for services like taxes, utilities or strata, finding a new place to live, arranging movers, signing legal papers…. The list goes on and on.
Now add into the mix all of the things a Realtor will help you with: pricing, reviewing your title, coming up with a marketing strategy, showing your home, negotiating with buyers and other realtors, helping you sort out dates, finalizing contracts, and generally keeping you calm and on track. These are all incredibly valuable services.
If you know what you are doing, you might save some money in commissions doing a private sale, but we want you to be very sure you aren’t going to land yourself into more trouble than you expected. Realtors are trained, experienced and great at their jobs. Hire one with expertise in your neighbourhood, and let them do the work for you.Tags: BC lawyers, BC Notaries, conveyancing, for sale by owner, fsbo, private sale, purchase, real estate, real property
Categorised in: real property
This post was written by Linda Caisley