Interest in "Private for Sales", "By The Owner", or "FSBO" has increased, as the stable real estate market we have seen in Canada since 2000, continues.  This has created both opportunity and dangers for Buyers or Sellers considering selling privately.  Real Estate is an online experience today and everyone from scam artists to website developers have sought to cash in on the action. This has created both Opportunities and Dangers for people considering Buying or Selling their home without hiring a REALTOR.  This page was designed to enlighten those considering that option.

The following issues are not options when Listing or Buying your home with a professional REALTOR but as a Private person they are legally great ways to save money.  REALTORS have a "code of ethics" that they must follow which prevents them or their clients from using these Opportunities that legally you can use on your own without a REALTOR.   

Before reading further we highly encourage you to review "Protecting You" and "Privacy and Confidentiality" from the drop down menu above. 

Opportunities for Buyers??
There are some real opportunities for people open to purchasing a home listed privately for sale.  A quick review of the websites, "PropertyGuys.com" or "ComFree.com", reveals to the trained eye, real opportunities for those willing to attack in order to win. In some cases there are 10,000's in dollars to be saved for those willing to do what it takes.  It's all legal by the way. 
Here is a list of Potential Opportunities found on "PropertyGuys.com" and ComFree.com" during a 30 minute review.

1) Under Priced Homes- a careful review of these websites reveals many homes with asking prices that to not represent true Market Value.  If you identify the homes that are below market value you can save money.  Almost any home owner who has used a Professional Appraiser to set the value of their home can be taken advantage of this way because you can buy at the lowest price the average home in the area was priced at.  As long as the home you buy is average or better in an escalating market you save!

2) Over Priced Homes- these tend to be the real winners because over time, the home owner becomes frustrated and then desperate.  This allows low bids (often $10,000's less than real market value) to be considered, especially when offering cash and with properties over $300,000.  You want to capitalize on the most common trait of all home sellers, whether represented by an agent or not, that of emotion.  Get them at the right time and you can keep more money in your pocket. Hey if they like you personally, you could save even more because they want that "nice young couple" to be the next owners of their pride and joy.

3) Mistakes in Representing the Property- this is really the best opportunity but you must be willing to demand your legal rights are enforced.  Home Sellers acting alone assume all responsibility for every aspect of the sale.  Most assume simply letting a lawyer review their contract will protect them, but what they have not been told is that every step along the way they make, in the process, can open the door for you to legally save more money.
Reviewing "PropertyGuys.com" and "ComFree.com", the only 2 sites we reviewed, we found legally binding mistakes on every single page we reviewed, that had listings.  Everything from "false and misleading statements", to descriptions that inferred something that wasn't really there, all the way to claims that would never stand up in a court of law.  Many of these mistakes save $1,000's but others could earn you $100,000's in a law suit.
As soon as a home owner makes any representation of their property, they legally become responsible for that comment. Don't worry about disclaimers either because a disclaimer does not cover a factually incorrect statement.
TIP: Print out each and every webpage you find the home on or it's details on.  Keep copies of all printed details supplied to you.  Tape record any conversation you have with the owner of the home. Tape record any phone conversation too.  Any documents supplied to you, should imply you can rely on them in making your decision. These are other great sources.  Whether you decide on a simple and affordable small claims court challenge or you decide to go after the big money with a lawyer, you should protect yourself.  Of course if the home owner made no mistakes this may seem useless but the chances of that happening are small because they don't even consider this.

4) Direct Contact with the Seller- this is another great way to save money.  People selling privately are by nature open and communicative. This is great for you the buyer because they often talk too much.  With some well placed questions you can often discover why and when they plan on moving.  Since often, with a listed home, even the Buyer's Agent is prohibited from having direct contact with the Seller, in order to not let something slip, take advantage of the Private Seller by gaining inside information.  Many Private Sellers, when they become comfortable, will reveal the real reason why the home is being sold and if there is any urgency at all, you can save a few thousand more.

5) Get a One Sided Contract- sure the Seller may take the offer to their lawyer but by then it is often too late. Get them to sign even if it has a clause that they can take it to their lawyer.  Any clause or timeline you insert into your Offer that can benefit you personally is worth a try.  Long condition times or even small deposit amounts are common in Private Contracts.  The longer the time in your condition the better your chance to revisit the Price with the owner.  Use the long time to force the house off the market, while you take your time getting things tied up.  At the end of the time allowed, go back and offer to remove the conditions only if the price is adjusted down. Even if you only save another $1000 or two you are ahead.  The Seller has already taken their home off the market waiting on your decision and now will be emotionally ready to compromise because of the time they have lost. 
Small Deposits make it possible for you to renegotiate the price, closer to the closing date because you seem to have nothing to lose.  The Seller has already made plans to move and they won't be able to afford not too.  Tell them you will walk away unless you get an adjustment in price.


In the end, you need to be sure you legally close the sale but most Sellers never know what you will or will not do!!

Dangers for Sellers??

Clearly you don't want to make the mistakes listed above so please read "Opportunities for Buyers" above before proceeding.

1) Believing Website Promises-clearly you need to market your home in order to attract a buyer.  Most people selling privately turn to one of the big 2 private sites, either "ProperyGuys.com" or "ComFree.com" both which have so little confidence in their own sites they recommend using the services of a discount broker to get your listing on realtor.ca.  If you are selling privately your money would be better spent simply creating a FREE site devoted only to your own home and then use the services of a discount broker to get a realtor.ca posting for your home.  Since Realtor.ca is the massively most dominant site in Canada, you have no need to spend hundreds more to get on a private site because all private buyers search realtor.ca anyway.  Use one of many FREE site builders like Google Sites to promote your home.  Register a domain with GoDaddy for 10 bucks and your ready to go.

2) Posting Private Details Online- if you have children or if you are a women who is at home alone, you should think twice about putting your information out there especially online.  Unless you are prepared to empty your house, create phony email addresses and temporary phone numbers, you really need to think twice about the danger you are creating for you and your children.  It is so easy to have your identity stolen when your whole life and contact data is posted online. Don't assume the contact pages or links the private sites use protect you because they don't.  Consider using a friend as a contact source and then have them forward all requests to you privately.  This way your home information and your personal information can't be cross referenced or stolen.

3) "So called experts"- all of the "home marketing or consulting" companies have a fine line to walk in what they can and cannot claim to help you with.  They all legally cannot offer real estate advice or they would face charges as "acting like" a REALTOR.  To get around this, they claim to be consultants or marketing specialists.  Now this would be no problem if they really were trained and educated in real estate marketing or any marketing for that matter, but unless you see proof believe otherwise.  Simply bypass companies like "PropertyGuys.com" and "ComFree.com" and instead pay the same fee to a local marketing company.  There will be many good and trustworthy small companies right in your own backyard.  They don't offer a "quick buck" approach, so you can get more "bang for your buck" this way. 

4) Late Night Appointments-are a real issue when selling privately because you lose over 50% of your protections at night.  You have no clear view of the car, the faces at the door or even who really is showing up to see your home.  It's easy for any criminal to create a phony gmail account and use a disposable cell phone to arrange a showing.  Everything may seem fine but you can't trust anyone on first look?  Be sure all showings happen in the early afternoon and preferably on Saturdays when the streets have people home.  This way the criminal element may look for easier Prey. 

5) Who is Buying my House-are you sure they are who they say they are?  You don't want to become part of an illegal money laundering scam and as a private for sale you are now a target, because Listed homes are protected by governmental paperwork the REALTOR uses but that Private Sellers never see.  Even the nicest sounding and best dressed couple could be testing you to see if they can process money through you by buying your home.  A great sign of danger is when people seem too interested or too willing to pay close to asking price.  In the end you may not be legally liable as a willing participant in the scam, but you still could lose your home or have $10,000's in costs you can't recover.  Be sure you check out every potential buyer before you let them in your home.  A simple credit check and identity verification from an independent private investigative firm or even paying your lawyer to handle this, can protect you in the same way your REALTOR would.

6) Home Insurance- the moment you use your home as a place of business some Insurance policies are void.  Also anyone entering your home that is hurt while doing business with you may not be covered on your liability policy.  Be sure your coverage is sufficient or extended to cover your doing business from your home.


In the end, the money you save by Buying or Selling privately, may offset the extra effort needed to ensure you are not taken advantage of when selling privately.  Don't let the claims of "easy selling" from companies looking to take you for a couple of hundred bucks to get your home online with them, instead of a REALTOR, deter you from your efforts to sell privately.  

Simply follow this formula which will cost you about the same as using "PropertyGuys.com" or "ComFree.com", in the end, to get the same features but with protections and better results.

Formula for a Successful Private Sale

1) Hire a Lawyer before you list and get a consultation (under $300)
2) Hire a Home Stager before you call the appraiser (under $250)
3) Hire an Appraiser to get a minimum price for your home (under $300)
4) Get disposable cell phone and email addresses (under $300)
5) Hire a local Marketing expert and create a website for your home (under $400)
6) Run local ads with your web address for your homes site prominently shown (under $500/month)
7) Hire a discount REALTOR to get your home on realtor.ca (under $150)
8) Extend your home insurance to cover business transactions in your home (???)
8)Have your lawyer review Offer before you sign anything (under $200)
9) Get a big deposit and be sure ONLY your lawyer holds it in trust.  Never give the other person your deposit whether you are the buyer or seller!!
10) Keep your mouth closed at all times and be sure any printed material is 100% accurate and verified.


For a couple of thousand dollars you could potentially save a few thousand.  The rewards are big but so is the risk. Like everything, protect yourself first!!  

***The above commentary should not be deemed to be accurate or used without the specific review of your lawyer.  Methodologies and Ideologies stated above are made using the perspective of a professional REALTOR who has a 99.8% success ratio for his clients over a 24 year period, because of this your results or approach needs to different than that of the experienced perspective displayed above.  RossKay.com is in no way communicating here or in any other form that by following the above discussion, you will experience success.
RossKay.com fully promotes and recommends the use of a professional REALTOR as the only way to successfully buy and sell real estate.  The above discussion is simply a way to convey to the general public RossKay.com's perspective on buying or selling a home privately. 

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Ross Kay is a sales representative under contract with RE/MAX garden city realty Inc., Brokerage, Burlington. 
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