Broker sticks up for Realtors

More homebuyers may be choosing to privately sell their own homes but many brokers still believe Realtors provide a safeguard for potential home owners during the buying process.

Broker sticks up for Realtors
More homebuyers may be choosing to privately sell their own homes but many brokers still believe Realtors provide a safeguard for potential home owners during the buying process.

“In view of all the potential mortgage frauds in the real estate market at this time, it is prudent to use a seasoned real estate professional; people think that a real estate lawyer can replace a real estate professional, but the truth is that real estate lawyer is not trained as a real estate professional and monitored by CREA or TREB,” Angela Wong-Lao of Invis the Money Lady said on MortgageBrokerNews.ca. “On the contrary, I find most of my clients get a better pricing for their purchases or selling by using a realtor because a seasoned realtor knows how to promote and sell the property properly.”

According to Wong-Lao, turnaround times for a private sale may be longer, as lenders take more time to evaluate these deals.

The discussion was sparked by a recent article about homebuyers – especially real estate investors – turning to lawyers who charge a base fee when negotiating for a property, and avoiding Realtors altogether.

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Seasoned landlords say they get their lawyers to handle all of the paperwork and negotiation with the whole transaction costing, on average, around $1,000 including HST.

Private selling has become more commonplace as buyers become more informed and in-tune with the entire process.
But the issue ignited a huge debate amongst investors and service providers.  Agents argue that sellers “usually end up getting a lower price than an agent would have gotten for them. This is likely due to the fact that in a private deal, both parties recognize there’s money left out of the equation; the commission.”

Larry Frondall, a Calgary-based underwriter, said lenders get “nervous” when handling private deals as there is a greater potential for fraud. He says that buyers would have to undertake the role of the Realtor in such cases and do all of the “leg work” including the checking of all comparable properties in the neighbourhood and pulling a copy of the property’s title for review.

The issue of security, says investors, need to be also considered. “When you open the door of your home to a potential buyer, what do you as the seller know about that person?  Are they simply casing the joint for a robbery the minute you leave the place?” said one landlord.