Real Estate Talk:
Broker vs. Company X
About companies that provide access to Centris but allow you to sell on your own
By Joseph Marovitch
I recently spoke with a client for whom I purchased a home. The client has a house to sell and they purchased before selling, which I do not recommend as it is not easy for most to carry the cost of two properties.
I requested a meeting to discuss the sale of the first house to which the reply was, “We have decided to use Company X (a real estate company that allows the seller access to Centris while selling on their own).
Many sellers have the belief, made public by organizations like Company X, that they will save money if they sell on their own, using Centris access via Company X. Of course, Company X states that they provide legal, notarial and real estate support when requested.
Essentially, the seller is looking out for himself, without any real estate professional protection. If the selling process is perfect and there are no problems, such as incorrect measurements, illegal views, servitudes in favour of neighbours, problems with inspection, spousal considerations, registered rights by disgruntled contractors, plumbers or electricians, out of date certificates of location, etc. etc. then selling on one’s own may work.
Many sellers have the belief, made public by organizations like Company X, that they will save money if they sell on their own, using Centris access via Company X.
For a real estate broker, the easy part of the process is marketing: price right, place ads, send emails, send mail, newsletters, flyers, open houses, use of Centris and access to a team of thousands of brokers with buyers, along with the broker’s knowledge of the real estate brokerage act (which applies to everyone), negotiating skills and practiced charm. As a broker, the only thing a broker thinks and performs seven days a week is real estate.
The more difficult part of the job is the process between the accepted offer and the signing. As a Company X client, the seller must hope there are no glitches, otherwise the deal falls apart and the seller starts over. The wonderful quality of a professional broker is that they are knowledgeable, experienced and trained to handle and overcome each obstacle that can hinder the sale with as little expense as possible on the part of the seller.
Example: The bank requests a new certificate of location because the old one is seven years or older. If there have been changes to the certificate since it was created the seller must purchase a new certificate. If there have been no changes, regardless of how old the certificate is, the cost falls onto the buyer. A broker will tell a seller this information. With Company X, if the seller does not ask, the seller will not know and $600 to $1200 goes down the drain.
Professional real estate brokers can properly evaluate the seller’s property and provide options to get the best price possible based on comparables and the seller’s current situation. With Company X, the seller is on his own. The seller heard the neighbour sold for an amazing amount of money and now the seller wants to get the same money, except the neighbour’s house has a new kitchen and two extra bedrooms. The neighbour’s house is not a comparable. The seller then asks too much for the house and all the good buyers pass by without offers. In this situation the seller ends up selling lower because the property was not properly priced in the first place. Was money saved by doing it on his own? No.
‘The more difficult part of the job is the process between the accepted offer and the signing. As a Company X client, the seller must hope there are no glitches, otherwise the deal falls apart and the seller starts over.’
The following is a list of advantages when using a professional broker:
- Buy and sell at a fair price because brokers have access to the latest market stats to properly price property;
- Expert knowledge of legal documents and procedures;
- Provide access to competent inspectors, notaries, mortgage brokers, contractors, interior designers, etc.;
- Maximize visibility. The more qualified buyers are exposed to your property, the quicker the property will sell at the best price;
- Access to the largest selection of property available for sale via Centris;
- Protection of the OACIQ. The OACIQ is the governing body overseeing the work of realtors. The OACIQ insures that brokers are ethical and fair in their dealings, behaviour and image. The mandate of the OACIQ is to protect the public and insure all facts are above board, honest, accurate and verified;
- The broker works for their client. The broker represents the client and accompanies the client in every step of the transaction;
- The broker insures all facts: measurements and statements are verified and correct. An incorrect fact, statement or measurement can cause a sale to fail.
- Brokers verify and qualify buyers to insure no valuable time is wasted. A buyer who provides an offer but does not have the funds can waste weeks of work and cause other potential buyers to pass by. Therefore, the broker will request a pre-approval document or proof of cash document at the beginning of the process;
- Brokers save buyers time, effort, energy and money. They represent and protect their client.
Notaries do not perform brain surgery and brain surgeons do not notarize. A schoolteacher is not a race car driver and a race car driver is not a schoolteacher. A real estate broker is a specialist in real estate. The broker lets the chef cook and the teacher teach.
‘The broker works for their client. The broker represents the client and accompanies the client in every step of the transaction.’
In Company X’s website, it is claimed that real estate brokers do not do the following:
- Protect against hidden defects – Remedy for hidden defects is stated in the real estate brokerage act and effective unless the property is sold without warranty;
- Protect from a withdrawal of the buyer – Remax and many other agencies offer buyer protection from withdrawal free of charge;
- Replace professional home inspectors – Of course not, brokers offer competent and qualified home inspectors to perform inspections;
- Preclude the need to close at the notary – All good brokers attend the signing to insure all goes smoothly.
Comparison between Real estate broker and Company X
Company X claims:
Claim: No broker, no commission
Truth: Less exposure and pays 2% to selling broker
Claim: #1 leading real estate website in Quebec
Truth: Centris is larger and both national and international
Claim: Selling time 16 weeks
Truth: Depends on market, condition of house and price
Claim: Average time invested 30 hours
Truth: Who’s time? Depends on market, price and condition
Claim: Support of notaries, appraisers, coaches and photographers
Truth: Real estate brokers provide same resources that are independent of brokers and therefore not biased
I hope this information helps potential buyers and sellers. Should you have questions or comments, please refer to the comments section at the bottom of the page. As well, to view past articles, click here.
Have a great week!
Next article: Do open house events work?
STATE OF THE MARKET
2019 has arrived and as we look back over past year, it must be said that it was an amazing year for real estate in Montreal. Property value rose at an incredible rate and the question on everyone’s mind is: what is next? Rumour is that interest rates will rise .25% at the end of January and many believe this will affect the market negatively.
If you are a real estate investor, know that when single home sales drop, rentals rise, since everyone must live somewhere. There is always opportunity in the market. However, nothing has really changed. Montreal is still an island fully populated with little room to grow upward or outward.
In this realtor’s opinion, prices will continue to rise in residential single homes, income properties and large commercial spaces, until the island is a re-seller market only. Prices will rise; however, sales may slow down with increased prices and higher interest rates. Look to the suburbs nearby for the next opportunity and buy what you can on the island while it is still available.
Image: Suzy Hazelwood from Pexels
Joseph Marovitch has worked in the service industry for over 30 years. His first career was working with families from Westmount and surrounding areas, hosting children between the ages of 6 to 16 as the owner and director of Camp Maromac, a sports and arts sleep away summer camp established in 1968. Using the same strengths caring for the families, such as reliability, integrity, honesty and a deep sense of protecting the interests of those he is responsible to, Joseph applies this to his present real estate broker career. Should you have questions please feel free to contact Joseph Marovitch at 514 825-8771, or firstname.lastname@example.org