Realtor vs FSBO: A Balanced Perspective

To get legal advice, you visit a lawyer; to get medical advice, you go and see a doctor; most people, to get their car repaired, leave it in the hands of a trained professional. Even to get your hair cut, you go to someone who is trained to do that job. In all of these instances, the average consumer, without specific training and resources in a given area, defers to a qualified individual. So what is it about Real Estate that is so different? ...

Propertywire.ca reported last week on the findings of a poll by Propertyguys.com that surveyed a sampling of 700 Canadians.

Referencing the findings of their internal poll, Propertyguys.com reported that there is a correlation between return on investment and paying out commissions.

There was a wave of response from many of our readers, much of it negatively geared towards PropertyWire.ca giving voice to these kinds of organizations. Therefore, in the spirit of objective journalism, we now wish to present a counterpoint to the findings of this particular poll.

Because of the sensitive and highly controversial nature of the conversations our journalist had with our Realtor readers, many of those who commented did not wish to be identified. Amidst many of the comments there were several common themes expressed by many of our readers.

The beliefs purported by the findings of the Propertyguys.com poll seemed to be posing the question- read, a rallying cry, to our Realtor® readers, of “Why are Realtors® necessary?” Our readers responded passionately- answering not just that question- but “Why are the services that Realtors® provide necessary?" Here are some common themes:

Much depends on the property itself

Many readily admit, Realtors® included, that some properties- and some people- are excellent candidates for private sale. But the fact of the matter is that it often comes down to the property itself.

When all the stars align-price, location, state of the property & market conditions- some properties “sell themselves” in a matter of hours or days. However, as many of the statistics that we were presented with would suggest, for the most part, this is not indicative of the average selling experience.

What our readers told us is that you need to rely on a number of variables for these stars to cross- and it is, often times, in enlisting the services and support of a Realtor® that these variables can not only be harnessed, but turned into opportunity.

As an example, a Realtor® who is well experienced in rural properties with unique challenges, or a Realtor® who offers extensive knowledge of a municipalities, bylaws and areas- or a Realtor® who is very skilled in finding buyers to meet very specific property needs, or are skilled negotiators- all offer something that sellers simply do not have access to privately. These things (and many more identified by our readers) are simply what they feel distinguishes the services of a Realtor®.

Commission vs. Service

The debate over commissions is ironic really, because at its’ core, it has nothing to do with money, although messaging and advertising would lead consumers to believe that. The heart of this debate is really about service and choice. If you ask most consumers, it is not about what you pay- it is about what you get in return for what you pay. Again this comes down to understanding your own professional value and articulating it.

Other issues that private sellers may not have thought of

As many Realtors® have expressed to PropertyWire.ca, they can offer assistance even with things like safety (by screening people and qualifying leads), offering sellers access to their databases and networks, acting as an emotional break between a property they may not be able to be objective about & handling paperwork. A good Realtor will offer even more services than this. PropertyWire.Ca explored this is more detail in our recent article "Consumers Should Weigh Up The Risks Before Going It Alone In Real Estate".

Mixed Messages

By and large, our Realtor® readers are not discounting the existence of FSBO / low fee brokerages. They recognize their place within the market and that there are clients out there for whom private selling is a good option. As one of our commenter's expresses "Propertyguys has the right to compete and consumers have the right to use them".

What we heard from the bulk of those we spoke with is that they are frustrated with the messages, and the half-information that is being distributed by polls like the one that we reported on in the last story; for the public as a result, as reflected by our reader opinion, there is a predominant sense that that the message of “Why do we need Realtors®, when we can do this ourselves?” is being delivered. So who is responsible for delivering the other side of the coin to the consumer and are they doing a good job?

The real issue is that when consumers ask themselves "Why not go it alone?" they do not receive all of the answers they need to make an informed decision, and they end up armed with a little bit of information- which can end badly.
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