October 18, 2005
Blurb: Quebecers are more likely to try and sell their own homes than other Canadians. What do they know that those in the rest of Canada don't?
Fighting the Fizbos
By Peter Diekmeyer o Bankrate.com
When Sarah Liao put her family's Montreal bungalow on the market earlier this year, she did something that few other Canadians do: she stuck her own For Sale/ For Rent sign in the window. Liao is what real estate agents call a FSBO (pronounced Fizbo), which stands for For Sale By Owner. And she isn't alone.
Like many Quebecers, Liao has a strong aversion to real estate agents and she's convinced that she can do a better job of selling her house. "The commission they ask for is way too high," says Liao. "We'd rather keep the money."
According to a survey conducted by the Greater Montreal Real Estate Board, only 50 percent of Quebecers always use the services of a real estate agent when they sell their home. That's a drop of 10 percentage points from the last survey, conducted in 2001, and huge difference from the rest of Canada, where the comparable figure is thought to sit in the 92 to 95 percent range, depending on the province.
A major advertising campaign
The question is whether the challenges faced by Quebec real estate agents will spread to the rest of Canada. According to Michel Beausejour, the CEO of the Montreal Real Estate Board and the Quebec Federation of Real Estate Boards, part of Quebecers' hostility to real estate agents is cultural.
"Anglophones are much more rational. They view a house sale as a financial transaction and they will do what it takes to maximize their value," Beausejour said. "Francophones are much more emotional. They feel like they are selling a part of themselves and they want to be involved with the process."
Considerable pricing pressure
Indeed the pressure may be even stronger in the Greater Toronto Area, where there are almost three times as many real estate agents than there are in Montreal. This, despite the fact that roughly the same number of properties is listed on the industry's Multiple Listing Service in both cities.
Despite the advent of the Internet, which enables buyers to do a substantial amount of the shopping at home, many of North America's real estate agents cling desperately to the 6 to 7% commissions that they have long become accustomed to. That said, the flood of thousands of new real estate agents into the market, coupled with the ease at which many homes have sold during the past five years has left many buyers asking for a better deal. As a result, discounters like Proprio Direct, are grabbing increasing market share.
Agents still bring a lot to the table
Beyond the ability to have your house listed on the MLS, agents provide numerous benefits that many Fizbos don't even think about. These include the expertise that comes from having been through the sales process many times before, the ability to negotiate impartially with buyers, as well as simple things like having someone to screen your calls.
"Do you want people that you don't know calling and visiting you at all hours of the day or night?" asks Stattner. "How do you know if a person is serious? An agent can do a lot of pre-screening to weed out the chaff."
Many Fizbos give up
In fact the Liaos' home has been on the market for six months and no has yet one has bitten. But Sarah Liao is not deterred. "We are patient and if we wait long enough, we'll get our price in the end. I'm sure that we are doing the right thing."
|© 2005 Peter Diekmeyer Communications Inc.|