The complications of selling your home privately

As journalists, we often ruminate on the impacts that the Internet will have on the future of our industry, sometimes forgetting that ours is not the only industry being affected. Encyclopedias have been replaced by search engines.

Phone books are obsolete. Travel agencies have been displaced by Expedia’s computer algorithms. And print classifieds have been supplanted by online services like Craigslist and Kijiji, which allow buyers and sellers to communicate directly with one another, without having to share the wealth with unnecessary middlemen.

Since the largest commodity any ordinary citizen will ever own is the house in which he or she lives, and since a real estate agent will typically collect a three per cent commission on the sale or purchase of a home, it makes sense that many people have begun to explore the idea of selling their homes online without a Realtor’s involvement. These homes are said to be “for sale by owner,” (or FSBO, pronounced “fizz-bo”) and currently they make up about a quarter of all real estate transactions annually in Canada.


As a measure of full disclosure, I must bring my own bias to light: my mother, Teri Davidson, is a real estate broker in Brantford, Ontario – and since she is the primary breadwinner in my family, if FSBO were to overtake a larger proportion of the Canadian housing market, it might adversely impact my family’s personal finances.

That being said, I am also somewhat of a thrifty shopper – if I am able to save myself some money by exerting a bit of elbow grease, I will definitely take the opportunity. So I can certainly understand why people would be interested in FSBO.

According to, the main advantages of buying a house privately are the ability to find properties at better prices, to negotiate directly with the seller, to find motivated sellers, and to communicate without an intermediary. The site explains that the typical commission on the sale of a home is six percent, which, depending on the price of the home, can amount to significant savings.

As well, a seller doesn’t have to worry about their agent’s ulterior motives – for example, dismissing perfectly reasonable offers as too low just because they want a bigger commission. The homeowner will be more motivated to sell the house than an agent who has dozens of listings on the go at once.

There’s less chance of questions going unanswered when the buyer and seller communicate directly, rather than playing the telephone game through their respective representatives. There’s a time commitment, certainly, but if the benefits outweigh the costs, why not at least try to sell your home privately?

As my mom says, “I always tell people they can do whatever they want, they can pull their own teeth out if they want to, but I prefer to go to a dentist.”


Unlike the homeowners, a real estate agent is unbiased, and can point out the flaws of a potential home to buyers. They can act as negotiators, prepare a properly-formatted purchase offer, calm and reassure their clients when issues arise, and offer advice about home inspections and insurance coverage.

My mother told me about the experience one of her clients had selling his house privately, something he has since vowed never to do again. He arranged to sell his house to one of his work colleagues, who immediately insisted he drop the price of the property since neither of them needed to pay commission to a Realtor.

Because the seller did not have anyone to guide him through the legal documents, he had to enlist his lawyer, who took several weeks to draw up the necessary paperwork (and charged him for it.)

His home inspection revealed several minor problems, which the inspector failed to tell him were minor – the seller was then strong-armed by the buyer into lowering the price of the house to account for the repair costs.

Once the sale went through, the buyer began visiting the house whenever he wanted, bringing family members and friends to look inside the house, often at inopportune times – he would complain to the seller at work that the lawn had not been mowed, and that the backyard barbecue was leaving grease stains on the deck. In the end, the seller may have saved $12,000 in commission, but lost thousands of dollars in price reductions, as well as countless hours of sleep.


Of course, that is just one man’s experience, told to me second-hand. But some of the statistics on the subject are similarly discouraging.

A study from the National Association of Realtors reports that a quarter of all private sellers will list their house with an agent within six to eight weeks of their house going on the market. Only two-thirds of FSBO sales are successful, and on average FSBO houses sell for 13 per cent less than comparable agent-assisted sales. The study also found that Realtors generally do not sell their own homes privately.

So should a person sell his or her home privately?

It depends on the seller’s level of commitment, negotiation skills, ability to deal with troublesome buyers, how they value their time, and what the total cost of the commission would amount to, among other factors. It’s a case-by-case question, and it can work out for the good or the bad depending on the circumstances.