I own an older home in a popular inner-city neighbourhood. A builder knocked on my front door and asked me if I’d be willing to sell – he said I’ll get more money for my home if we don’t get a real estate professional involved. What should I do?
What you’re describing is not an unusual situation, particularly in large cities where inner city property is attractive, particularly to builders who want to redevelop it.
The first step is to decide if you have any interest in selling. If you don’t want to sell, no matter the offer price, then your conversation with the builder is likely done.
On the other hand, if there is a price at which you would consider selling, you have some due diligence to do.
Even if the builder suggested you don’t involve a licensed real estate professional, our advice is always to have a real estate professional involved, who will work on your behalf.
There’s a good chance the builder doesn’t want you to get a real estate professional involved because they think they may have an easier time negotiating with you, assuming you do not have much experience in the real estate market. They’re trying to sweeten the deal by saying you’ll get more money for your property if you don’t hire a real estate professional; the thought being that if you don’t hire a real estate professional, you won’t have to pay commissions to the real estate professional, and you can keep more money in your pocket.
My caution for you on this is that they’re saying they’ll pay you more – but more than what? More than what they would pay you otherwise? More than your home is worth?
Everything is relative.
If you want to hire a real estate professional to represent you, you will have to sign a service agreement with them and it will indicate the details of the compensation you will owe to them, but that doesn’t automatically mean you’re going to end up with less money in your pocket from the builder.
With solid negotiating skills, your real estate professional may be able to negotiate a higher price from the builder, and still leave more money in your pocket after you pay your real estate professional’s commission.
There are always benefits to working with a licensed professional; they’re educated, regulated, they carry errors and omissions insurance, and the Real Estate Council of Alberta can investigate conduct if you believe they breach the rules in place.
