Private sales of real estate are on the increase in Toronto. A number of online companies now offer prospective home buyers and sellers the ability to list or view properties on the internet, and to conduct deals without engaging the services of a real estate agent. Some of these companies suggest that a real estate professional is merely a "middleman,” not a necessary aspect of a real estate transaction.
Agent Fees
It's true that a real estate agent's fees – which average about 5% across the board in Ontario – can add up when purchasing a home. On a $500,000 home purchase, the agent's fees could total approximately $25,000 + HST. It would seem to novice home buyers that this cost could be avoided by conducting a deal without an agent's help, but this do-it-yourself approach can fall into the category of "penny-wise but pound-foolish.” The dangers of sealing a deal without access to a real estate agent's knowledge and experience can be very costly.
Real Estate Agent Know-How
A reputable realtor is a huge asset to a prospective buyer. An experienced real estate broker knows the market: which neighbourhoods will best suit the needs of the client; which properties are available in their price range; and what fair market value for each property might be. A good realtor can narrow the focus of a search in a way that saves the home buyer many months of fruitless open house viewing.
Once a prospective property has been located, a realtor will know the right questions to ask in order to ascertain if the home and the prospective buyers are a good match. Does the house have the desired amenities? Will it accommodate the client's furniture and décor? A real estate agent can also engage the proper types of appraisers to do any home inspection that is necessary. Is the foundation sound? What condition is the plumbing in? How efficient is the heating system? Assessment requirements vary according to age of the house, location, etc.
If the house checks out, a realtor is invaluable for the next phase, which involves the offer and financing for the purchase. A realtor will know how to develop a fair offer and what the timing should be on it. He or she will know what conditions to apply to the offer, and what documents need to be scrutinized. A realtor can calculate an appropriate deposit, and suggest avenues of financing. A realtor will know when it's time to bring in a lawyer to close the deal, and will be able to recommend one who specializes in real estate practice.
Finally, a real estate agent can help you to avoid becoming a victim of fraud. Real estate fraud is rife in Toronto, and professional con artists are often difficult to spot. Recent scams include fraud involving identity theft, where sellers were not actually the owners of the property, complicated mortgage schemes where buyers were left with debts larger than the value of the house, and false appraisals where buyers were stuck with damaged former grow-op properties.
An experienced and reputable real estate broker can ensure that the process of finding your dream home is a dream come true!