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The Ins and Outs of Private Home Sales

March 10, 2009
4 mins
A young couple meet with a representative to buy a home

‘For Sale by Owner’.

Drive around many neighbourhoods and you’ll see these signs mixed in with the more traditional smiling faces of the local real estate agents.

The private sale of homes is becoming more common these days, as technological advances allow buyers different avenues into your home instead of having to visit a real estate agent’s office to find out what’s available in the community.

As the Internet and its capabilities expand, so do the opportunities for online browsing of real estate. This has resulted in a different avenue for people to sell their home privately, thus avoiding real estate fees/commission of about 5% of the purchase price of their home ($200,000 house x 5% commission = $10,000 fee).

Many private online real estate websites have sprung up in recent years, with one figure showing that about 25% of homes in Canada (and 50% in Quebec!) are to be sold privately. One such website,, boasts no agents and no commissions, and offers three tiers of advertising for your home on the site, which range from $325 to $675 (in Toronto – prices vary depending on location), with more options available to sellers as the costs rise. The site, along with the majority of its competitors, offers centralized searches for a buyer’s city of interest, and photo galleries for showcasing homes. It also features a customer service team and a consultant to be at your disposal to assist you in selling your home privately. boasts 600,000 visitors each month, and 6,500 sold homes in 2008, up from about 5,000 in 2007. The average turnaround time is about 85 days, according to the website.

Selling privately seems like a great way to put more money in your pocket when the sold sign goes up. In our current economic crisis, people selling their homes can’t expect the same profits that were common-place a couple of years ago, so selling privately is one way to maximize the dollars created from the sale of your home.

Aside from websites like, other ways to advertise your home are classified sections in local newspapers, free classified websites that are becoming increasingly popular like Kijiji, or even online auction houses like eBay. Although there are costs involved with most of these, with proper planning and budgeting, you can make these options work for you.

But visibility will always be an issue with the private sale. Unless someone happens to drive by your home and see the ‘For Sale by Owner’ sign in your front window, or is web savvy enough to seek out these private sale websites, your home could be overlooked by many potential buyers. For many, a living, breathing real estate agent is the most comfortable option for them when making such a significant purchase. Agents know everything that’s available in the community, the ins and outs of each house they show, the art of negotiation, and the process of closing the deal. That’s why three-quarters of homes in Canada are currently sold by real estate agents.

They also feature on the most used website – – which is where the majority of homes in any city or town are listed. It is the first destination for many home buyers when looking online because it offers the widest variety of properties, and the contact numbers of the agents in charge of moving the home.

Old habits die hard, and even as people of all ages become more web savvy and use the Internet as a tool for shopping for a new home, and the agents listed on it, continue to lead the way.

The pros to selling privately

  • Real estate agents make their living off commission, about 5% on the sale price of your house.
  • Private sales eliminate the need for commission, resulting in more money in your pocket, as evidenced by the chart below (on a sale of a $200,000 house).

Agent commission vs Cost of a membership to ByTheOwner $12,000 $500
Taxes (GST/QST) $600 $25
Appraiser (optional) $300 $300
Certificate of location * $600 $600
Discharge (where applicable) $250 $250
Total $13,750 $1,675

*These amounts are estimates; chart info courtesy of

Pros to private sales

  • Maintain control over all aspects of the sale
  • Ability to show the house at your own convenience
  • Hold open houses when it best suits you
  • Highlight all your home has to offer in your own words; don’t depend on someone who doesn’t know your house to convey the message to potential buyers
  • More buyers are web savvy and aware of private sales websites, as well as online auction and free classified sites
  • Potentially save thousands of dollars

Cons to private sales

  • First instinct is to contact a real estate agent, so potential buyers may not be finding your home
  • Real estate agents know the market and what price points will sell, as well as any upgrades that will draw buyers into your home
  • Up front advertising costs, with no guarantee of visibility
  • Internet home browsers more apt to use because of large selection, and familiarity
  • Potential buyers must contact you; so you may need to make yourself more accessible
  • Nobody to draw up contracts or advise you on negotiating
  • You may not be the best person to show your home, because of your personal attachment to it, and you may be unwilling to talk about its shortcomings in fear of losing a sale

The RATESDOTCA editorial team are experienced writers focused on sharing stories and bringing you the latest news in insurance and personal finance. Our goal is to provide Canadians with the information and resources they need to make better insurance and financial decisions.

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