Internet Marketing

Historically, For Sale by Owner homes were limited to marketing their homes in the local newspaper and putting a For Sale by Owner sign in their window. One of the big advantages Realtors in Calgary have historically had over For Sale by Owner homes was the MLS, a searchable computer database which pooled many listings into one location. A buyer working with a Realtor would be able to conduct a much more concise and efficient search for their new home. Selling your home "For Sale by Owner" therefore never really caught on in Calgary, until recently.

Internet savvy entrepreneurs have recently created a plethora of "we list" websites offering Internet marketing for For Sale by Owner homes. Many even offer yard signs that look just like a Realtor's For Sale sign. A quick drive around Calgary will clearly show you the popularity of these websites is growing.  These sites also offer a "pooled" approach to marketing, which is much more effective than a newspaper ad.

If you have decided to sell your home For Sale by Owner, purchasing the services of one of these companies is probably a good idea. Be sure to drive around and see which company seems to be the most popular as it is more likely that local buyers will go to their website.

Realtor vs. For Sale by Owner

So you're probably asking yourself at this point, "Isn't it sort of dumb for a Real Estate company to be telling people about this? Won't you lose business?" Well, first of all, our way of doing business is to give clear, honest advice to our clients so that their best interest is served, not ours. We believe honesty and integrity creates happy people, a good reputation and thus increases business. Second, while For Sale by Owner may be the best approach for some, it has some significant drawbacks which preclude most people from even considering it. Keep reading for details.

Consumer Protection and Liability

Probably the most serious drawback of a For Sale by Owner is the lack of protection for both the Seller and the Buyer.

All Realtors in Calgary, as well as the rest of Alberta, carry Errors & Omissions Insurance to protect sellers and buyers in the event of a mistake, misrepresentation and so forth. Individual home owners, or the "we list" type websites do not. So, for example, if you're selling your home For Sale by Owner, and you mistakenly make an error on the square footage of the property or some other detail and subsequently get sued by the buyer, you have no protection, whereas if you're being represented by a Realtor, the Realtor would get sued and their insurance generally would cover any loss. A single mistake could end up costing you far more than a Real Estate commission.

Realtors, especially those with advanced training, are also aware of the legal requirements & liabilities to both seller and buyer if certain things are not done properly during the sale of a home. Without this knowledge, buyers may end up inheriting some serious and costly issues which they will either end up being responsible for, or which the seller may be liable for. Only someone with proper training in Real Estate Law can offer proper protection from liability. A For Sale by Owner website and seller self representation generally offer no such protection.

Effectiveness

Okay, let's say you know all about Real Estate Law, understand your liabilities and are comfortable representing yourself. How effective is "For Sale by Owner" marketing of your home able to get you the price you want in the time you want?

The first step in understanding this question is to think like a buyer.  Let's say you want a 4 level split style home, with 3 1/2 bathrooms, minimum 1200 square feet, built after 1990, with a fireplace, hardwood flooring and a walk out basement facing south. Now, go to any newspaper or For Sale by Owner website and try and find only those homes which exactly match this criteria. Chances are you'll spend all day reading each listing, calling each owner and end up getting thoroughly frustrated. On the other hand, any Realtor can go to the MLS and produce a list of homes exactly matching the criteria in about 30 seconds. 

Because it's easier and more efficient, most buyers will use a Realtor. And because most Realtors never take their buyers to homes that aren't listed on the MLS, the vast majority of potential buyers will never even see your house if it's listed for sale by owner.  Basic statistics will tell you that you will typically get more money for your house when there are more potential buyers.

If you've read the determining list price section of this website, you'll know that it is very difficult for someone without access to the MLS to determine what other similar houses have sold for. The result is that many For Sale by Owner listings are not priced properly. Pricing your property too high or too low can cost you money.

Last Resort

While clearly a For Sale by Owner method of selling is not what we would recommend in most cases, in some instances may be in your best interest as a last resort. One example would be if the equity in your home is not sufficient to be able to pay commissions, mortgages and the other costs involved. A good Realtor, who truly has your best interest at heart, will make sure you know before listing your home for sale, exactly how much money you'll walk away with when all is said and done and will not hesitate to inform you that it may be in your best interest not to list with them.

Fortunately there are Real Estate companies who offer professional service at low rates which may enable someone in this situation to have the best of both worlds.