Selling Privately. Becareful You Don’t Put Yourself In a Buying Disadvantage

 

Selling your home privately is certainly an option for some Toronto homeowners and personally I feel that if you are comfortable with undertaking all the marketing, legal and negotiating responsibilities then go for it. But one thing I will say is that you definitely have to have an unjaundiced eye when it comes to pricing, selling and buying a home.

Recently, I was selling a client’s home and a buyer viewed the house and they loved it, so asked me to put together an offer on their behalf. During our discussions they informed me that they were presently selling their home. Great! I asked how long had the house been on the market…Six Months! Oh, this story get better. They were selling privately to save Realtor fees (fine) but after 6 months on the market all they could say is they had 4 showings (2 were agents) and no offers. We all know that if it ain’t selling then there is a price problem most likely. Yes, in fact it was $60,000 off what the house should have been realistically listed at. To borrow from the food industry, this house sale had long passed it best before date.

Look, if your house has not sold in 6 months you know that whatever marketing or selling strategy you employed, well, it ain’t working. But these buyers loved the house and the offer they were considering presenting to my sellers was very attractive with only one condition. My next question…So, how is your financing? There was a small mortgage left owing and they assured me that the bank had approved them for bridge financing if necessary. This is not giving me with any warm feelings.

When I presented this offer to my sellers I was very blunt in that I had serious concerns:

  1. The buyer’s house is unrealistically priced
  2. There is no marketing strategy to attract any buyers
  3. They may not be able to complete the transaction on the agreed closing date
  4. Is the additional $60,000 jacked-up price critical for their financing?
  5. If the buyers could not close it would create a huge problem in my sellers buying a home

The deal died, which was inevitable. Now, I did sell the house to another buyer (working with an agent) and both buyer and seller were comfortable with the terms. It has been two months since that day and it seems that our private buyers have given up selling privately and have now decide to go with a realtor. I wish it was a good news story, but they are still listed at $60,000 more than the house is worth. It will be a long winter.