Real Estate NewsFive Steps To A Successful Real Estate Transaction
This is Consumer Awareness Week in Ontario, where the government is using the slogan "Smart Consumers are Good for Business." When it comes to buying and selling real estate, the government says the smartest way to conduct the transaction is by hiring a licensed real estate professional.
That"s a big boost for Realtors, who have seen their roles in the real estate transaction come under increasing pressure from private "for sale by owners" companies, online listings and new regulations that govern their business.
Ontario"s Ministry of Consumer and Business Services teamed up with the Ontario Real Estate Association (OREA) to promote two new, free books that the association has produced for buyers and sellers. While there are dozens of books on the market that tell you how to buy or sell a home, these 100-page guides give you everything you need to know, from deciding if you need a Realtor, to closing the deal. While the slant is obviously in favour of hiring a professional, the books do cover the pros and cons of trying to sell a home yourself, or using a private for-sale company that may provide signs, feature sheets and on-line listings, but not the services of a professional Realtor.
In an active real estate market, consumers often question the need to pay real estate commissions when houses seem to be selling so quickly -- and with home listings on the Internet and many self-help sales books and articles available, it"s tempting to try handling a real estate transaction on your own.
OREA says that one of the main reasons why "going it alone" may not work out is because most buyers equate a For Sale By Owner sign to a bargain. "They"ll assume you"ll sell for a discount because "you don"t have to pay the real estate commission," and as a result, they"ll probably offer you less than fair market value."
Other things you"ll have to deal with are advertising the property to reach potential buyers, figuring out all the legal paperwork, and trying to "pre-screen" prospective buyers to see if they are serious buyers or just "lookers," says OREA.
"Realtors qualify buyers, making sure they don"t waste their time viewing homes they can"t afford and saving sellers the hassle of having their home shown to buyers who would not be able to make an offer," says OREA president Laura Leyser. "And Realtors know the many, many potential pitfalls to any transaction and how to avoid them."
Anyone hiring a Realtor will also learn about "agency," which refers to who the Realtor works for. You can hire a Realtor to work exclusively for the buyer, or exclusively for the seller, or for both. The legal questions surrounding agency and conflict of interest were recently studied by provincial real estate regulators across the country, and eventually there could be new legislation that spells out legal rights and obligations more clearly. But for now, when you buy or sell a home, you"ll be expected to sign a paper that says you understand your "agency relationship" with your Realtor.
At a media event to launch the new books, Leyser and Jim Watson, minister of Consumer and Business Services, listed the top five consumer tips for home buyers:
Do your research.
Consult a licensed real estate professional.
Shop around -- for homes and mortgage rates.
Have your home professionally inspected.
Get it in writing -- and read before signing.
Not included in the list, but a good idea, is to have your lawyer look the offer over before you sign on the dotted line. The OREA books offer tips about how to find a good real estate lawyer.
While the books focus on Ontario laws and procedures, they have enough general information to be useful for anyone who is thinking of buying or selling. OREA will ship them, free, anyplace in the world. For a copy call 1-800-563-4663.