# Help please: Offer on house for sale without Realtor



## NotJustDreaming (Oct 20, 2013)

Hello,

I am the Executor for my mom's modest estate that includes a 2 bedroom bungalow on a cement slab in small town Ontario.

We just cleaned up the house and I was about to sign a contract to list with a Realtor but was approached by a young couple wanting to purchase without a Realtor for the savings. The Realtor I consulted with suggested we list at $149,900 and expect the house to sell quickly. This young couple (30ish) asked if we'd accept $140,000 and are preparing an offer this weekend.

I wasn't expecting to do this solo so I could use a realestate101 lesson.

I know the list price is not necessarily the sale price. And I know the $140k ask price is less than the Realtor commission discount. But I also appreciate the savings going to a young couple rather than a realtor for no work so far. And I know it could all just fail. This is the third inquiry we've had regarding the house sale but really the only one I've taken seriously.

Could you guys quickly walk me through this? I will engage a lawyer on Monday. But otherwise, I'm kind of floating in the wind. I briefly searched FSBO but I need some more time to get my feet wet. Some guidance would be much appreciated!


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## mrPPincer (Nov 21, 2011)

I'd suggest going with the young couple, sounds like you'd rather help them than throw fistfulls of money at a faceless middleman who will walk away 5 minutes later.

Will they entertain a counter-offer?
Like 149.9K less commish, and then meet in the middle someplace?

Just my thoughts, I don't know your situation, but living on a main road, I can sell this place w a road sign np if I chose to, and would.


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## AMABILE (Apr 3, 2009)

take the $140k ---$149k minus 5% commission is only 1-2 k difference


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## mrPPincer (Nov 21, 2011)

might wanna recheck that with a calculator AMABILE


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## mrPPincer (Nov 21, 2011)

dunno what re agents in your area, or your re agent, is charging, but 5% seems crazy high, I'd possibly sell at a loss just to skip the middleman myself, for all their 5 minutes work.


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## Just a Guy (Mar 27, 2012)

An an executor, it's technically your duty to get fair market value, which usually translates to the best offer. What the realtor recommended is rather meaningless, some list well below market to get a bidding war going.


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## twa2w (Mar 5, 2016)

This is small town ontario not GTA so unlikely to have a bidding war.
5% commision is not out of line for that price of house.it is the standard feein most of ontario.
You have no guarantee that the real estate Agent can get full price nor how quickly it would sell in spite of what the agent says.
Usually in a small town market that isn't red hot, the realtor lists for a little more than he/she expects it will sell for.
You can also counter the young couples offer at some slightly higher figure.
If there are also other beneficiaries you may want to ask them as you do have an obligation to them to optimize estate value and settle in a reasonable time but a couple thousand dollars difference split a couple of ways would be no big deal.
Put another way...
You have a guaranteed sale with a known closing date on one hand versus an unknown that may or may not net you a couple thousand more over an unknown time frame?
I would say speak to the other beneficisries but a bird in the hand is worth two in the Bush as they say and you can settle the estate quicker.
You may also be able to give or sell the young couple some of the contents like lawn mower, yard stuff etc that they may not have. Don't expect to get much.


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## mrPPincer (Nov 21, 2011)

twa2w said:


> This is small town ontario not GTA so unlikely to have a bidding war.
> 5% commision is not out of line for that price of house.it is the standard feein most of ontario.
> You have no guarantee that the real estate Agent can get full price nor how quickly it would sell in spite of what the agent says.
> Usually in a small town market that isn't red hot, the realtor lists for a little more than he/she expects it will sell for.
> ...


^good points, but stuff has been moving really fast in my particular area of small-town southern ontario.

That said, this time of year and particularly spring are the better times to move stuff, but buyers have been competing here in an area where towns are in the small single-digit thousands population numbers.

I know this because I've been working on my mom's rental that she will sell (labour is free.. hey I'm semi-retired, so no shortage of free time), and there were a bunch of houses on the same street for sale, all sold now, RE agent says she has a line-up.


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## NotJustDreaming (Oct 20, 2013)

Thanks for the replies.

I thought 5% was reasonable given the price of the house. The realtor will charge 4.5% if she is the buyer and seller agent which she stated she ofter is. I was also quite surprised she suggested listing the house for as high as she did. I was thinking more like $120k. But I'm not from that area and haven't paid any attention to house values prior to this.

What are the steps for selling on my own? Does the lawyer handle most things?

This is kind of funny. I probated the will myself. Super simple. This though... I know more people do this on their own but it's a mystery to me.


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## Just a Guy (Mar 27, 2012)

Yeah, get an offer and a deposit, then give the information to a lawyer, sign some papers if all goes well and you're done. Realtors don't really do anything after signing except make sure the conditions are removed on time (they sign off on it before or on the date of expiry) and then hand over the keys.

If they do an inspection or something, you'd need to give them access.


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## Rusty O'Toole (Feb 1, 2012)

I think the offer is worth taking. You might counter and get them up another couple of thousand. One thing you should do, is get an appraisal in case any of the heirs want to kick up a fuss. Then you can prove you got fair market value, or close to it.


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## mordko (Jan 23, 2016)

There is actually quite a bit of work and know-how involved in selling the house, so it's not just the money you might be losing. Personally, I would go with a competent realtor, but wouldn't pay 5% commission.


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## nobleea (Oct 11, 2013)

mordko said:


> There is actually quite a bit of work and know-how involved in selling the house, so it's not just the money you might be losing.


Agreed, that's why you pay the lawyer.  A fraction of the price that you would pay a realtor.

Take the offer. Have your lawyer look over the contract before you sign it. Have them fork over a decent sized deposit cheque, maybe 15K. Most private sales have the deposit cheque held in trust at the seller's lawyer, but it probably doesn't make a difference.

Selling/buying houses is not hard. If it was, lawyers would charge a whole lot more than 1000-1500$.


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## Mukhang pera (Feb 26, 2016)

Just a Guy said:


> An an executor, it's technically your duty to get fair market value, which usually translates to the best offer. What the realtor recommended is rather meaningless, some list well below market to get a bidding war going.



JAG is right about duty to get FMV, but then, perhaps you are executor and sole beneficiary and, unless you are planning on suing yourself for breach of duty, it's a non-issue. If there is a long line of avaricious and litigious heirs to deal with, spend $500 or whatever it takes nowadays for an appraisal. 

JAG is also right about the realtor's suggestion being somewhat meaningless. I have not encountered the well-below-market bidding war types. But then, I suspect JAG has bought and sold more houses than all the rest of us here on CMF combined and has personal experience with that type, which I have only heard about. In my time, I have sold only about a dozen and a half or so houses, including a few in the situation you have described...being approached by a buyer. 

The type of real snake I have encountered most often is the one who makes positive noises about setting a high price and actually getting it. They want the listing and tell you how great your place is and how you should be able to stick to a high listing price. Then, 2 weeks later, they come back and say well, the market has changed; what you have is not what the market wants, blah blah blah. They'll say "We should consider reducing the price to generate offers." Still others, especially if they think you are clueless about the local market, will want to list low and get a quick sale and effortless commission. If you drop your price from $150,000 to $135,000, you take a $15k hit. At 4.5% commission, if charged on the whole, reduces a commission on a $150,000 sale from $6,670 to $6,075 on $135,000. If I am a realtor, I'd rather get $6k three days after listing instead of getting an extra $600 after a few months of showings, open houses, advertising, etc.

You say the prospective purchasers are cobbling together an offer this weekend. Do you know if a lawyer will draft it? That would probably be for the best. First-time purchasers (which I am guessing they are) perhaps know little of the niceties of setting closing dates, incorporating "subject" clauses (eg., subject to financing, subject to inspection, & c.).

Then there is the business of a deposit. Where I come from, a deposit of 10% of the purchase price is usually considered a sign of earnestness. If you have a realtor, the realtor holds the deposit. In your case, the purchasers might have some reluctance to handing the deposit over to you. Suggest it go to your lawyer, in trust. Do not sign or sign back any offer received without having your lawyer look it over first. So the offer should stipulate that it is "open for acceptance" for a time sufficient for you to consult a lawyer.

I do not know the practice in Ontario, not having lived there for a long time, but in BC it is the purchaser who retains and pays for the conveyancing lawyer. That person will do the necessary title search, get a survey certificate, prepare transfer and related documents, statements of adjustments, deal with the lawyer for the purchaser's lender, etc. There should not be a lot for your lawyer to do apart from reviewing the docs with you, taking your signature on the conveyancing docs, receiving and disbursing the purchase monies. As well, here, the vendor's lawyer acts to "clear title", at least of financial encumbrances, but in your case I am guessing there are none.


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## Just a Guy (Mar 27, 2012)

The main reason a realtor holds the deposit is to ensure they get paid. The deposit usually is a little more than their comission, so they need to only cut a small cheque to the lawyer later. You can get a standard contract at any bookstore or office supply store, even the ama. Heck, some realtors will even give you a generic form, or you can download one off the internet, just make sure you get one for Canada, if not the correct province.

There are some common clauses (inspection, financing, included goods, etc.) and, unless you need something weird (which I can't even come up with an example of), then there is not much to worry about. The buyer just needs to sign off on the terms before they expire. You want to make sure the "conditions" expire in a reasonable time like a week or two. If they sign off, everything goes to the lawyer, if not, you return the deposit. If they back out after the conditions are signed off on, then you may get to keep the deposit, so it's fairly important to get a deposit it's ere to ensure they complete the transaction.


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## Newby1983 (Apr 9, 2015)

You not being from the area and unfamiliar with house selling prices would be a concern if it were me. Sounds like a small town and being from one everyone knows everyone. Whats to say the nice young couple isn't the neice/nephew/son/daughter of the realtor you've approached to list with? Long shot? Maybe, maybe not but your selling an expensive asset here. 

If it were me I'd pay and get an appraisal by a certified appraiser or at least have a few realtors give you a ballpark.


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## Prospector (Jul 25, 2014)

Have you bought or sold a rural house? I wouldn't go with the realtor personally, but I would be very sure to get your lawyer to walk you through all details to do with well and septic. We bought a house that failed teh well test and the seller ended up having to pay for a UV filter to go in before we got keys. Hopefully your well/septic is good, but if there is a clause, and an issue comes up, you may have an extra hoop to jump through. 

Also rural lots are famous for bad fencelines. Check if the municipality has a GIS map of the property and be sure there will be no boundary issues. The buyer should get title insurance to handle this, but then may require a fence be moved or something like that. GIS mapping is great for checking these things before taking possession - but it may mean an extra issue for you to work through.


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## OhGreatGuru (May 24, 2009)

1. Ask your lawyer's opinion. If you don't have a real estate agent the lawyer may have to do more work, for which he/she will charge.
2. If you "consulted" a real estate agent already on an asking price, do you not have some implied agreement with that agent? And if you have a written agreement with them you can't cancel it without penalty.

PS: It seems to me you are doing this couple a favour, but not yourself.


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## twa2w (Mar 5, 2016)

The realestate agent doesn't really do any work on a sale after signing of the offer other than followup for removing of conditions and sending offer to lawyer. Almost all the work on the sale is done by the lawyers for the buyer and seller.

Assuming you do have not signed a listing agreement with the realestate agent and he or she has not shown the house to the young couple, you have no obligation to the agent. 

149,000 less 5.13%(HST) Is 141,356 and that is assuming you get full price and assuming it sells.
You can get another opinion of value from another agent to see if they come close to the 149,000. Then you can determine if this is reasonable for price and saleability. Or spend money on appraisal but it likely won't be much different than what the agents tell you.
Or you can go to young couple and say 141,500 is your bottom line. You have a sale and a firm closing date.
Your call... 

As for well and septic, if this is not on municipal services, you can sell the property as is, with no warranties on well and septic but this can result in purchasers shying away or reducing their offer or putting conditions in.
Better to test water first. Let us know and we can give you more info.


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## none (Jan 15, 2013)

NotJustDreaming said:


> Thanks for the replies.
> 
> I thought 5% was reasonable given the price of the house. The realtor will charge 4.5% if she is the buyer and seller agent which she stated she ofter is. I was also quite surprised she suggested listing the house for as high as she did. I was thinking more like $120k. But I'm not from that area and haven't paid any attention to house values prior to this.
> 
> ...


At the very least drop the $400 and get the place professionally appraised.


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