By Curt Knight
As a realtor obviously I have my own bias. But this question comes up from time to time when I meet with clients who are thinking of selling their home. COMFREE has done an exceptional job of marketing themselves over the last few years and has gained some market share. However, there are always two sides to every story and I thought it would be good for people to here from an industry insider and form their own opinions.
My wife and I actually attended a COMFREE seminar a few months ago where you can learn “how to sell your home on your own.” We went more or less just to see what it was all about and to learn about their model and the competition. I thought it would be a lot of realtor bashing but they were actually pretty good. In fact COMFREE now has many realtors on their staff.
COMFREE has developed an interesting business model. They have come up with a wide variety of services to offer to the consumer and the consumer can pick and choose what services meet their needs and budget. The speaker went through all the different packages but when it came to FULL package I started doing the math and couldn’t help but think- wow you are getting up there quick. If you go with the full package this includes things like MLS listing, full signage, professional photos, support with negotiating, paperwork, legal advice etc. you are getting pretty close to $2000 plus you still have to do all the work of a realtor- showings, answering phone, open houses, advertising and so on. The problem is they present the packages in a piece meal form that makes it seem like you are paying less.
Also the seminar we attended they mentioned an interesting statistic- they said that 70% of COMFREE listings sell by a real estate agent- and they actually encouraged COMFREE sellers to agree to co-operate with Buyers Agents (meaning pay them a commission) so more than likely you will still end up paying a Buyer’s agent 2-3% commission, on top of COMFREE’s fees. I wondered to myself why would they tell people this- after all aren’t most people there to save paying commissions? But after thinking about it for a bit it made sense- they want people’s homes to sell- I mean if homes don’t sell then sellers are not happy- which isn’t a very good business model is it?. They know the best way to sell a home is with a realtor- Why? Because most buyers out there are working with a realtor- why wouldn’t they? -it doesn’t typically cost them anything as the seller pays their fee’s when they purchase, so therefore they can get the support and help of a realtor to ensure they are not overpaying- which is most buyers biggest concern with private sales.
The other thing I would caution people with is that from our experience many people looking on the private for sale sites are “deal shoppers.”. They know you are saving money on commissions and they expect some of that savings to be passed on to them. We often find the buyers are also unqualified. When you work with a professional realtor- the first thing we do is verify that you can get the financing. With private sales we find that in many cases buyers are not pre-qualified and therefore more deals tend to fall apart.
One of the biggest issues I find with COMFREE is they claim it will go on the multiple listing service or MLS. This is true it does go on the public MLS site- however I find most sellers think this means it goes on the local real estate board, so realtors will get to see it and show it to potential clients- this is not the case. The issue is that when posting a listing on MLS it is required that the listing must go on the home brokerages board (where the brokerage is located). COMFREE is not located in Kitchener Waterloo or many other cities- it is in either Hamilton, Toronto or Ottawa- so when I do a search for a property on our system (the realtor system) the COMFREE listing will not show up in our search. This is problematic because as I said above most buyers are working with a realtor so if this is the case typically we set them up on search using our system and have properties come to them via email- the COMFREE listings will not show up because they are on the Ottawa, Toronto or Hamilton real estate boards. They will show up on the public MLS but the majority of buyers are not searching there because their realtors have a search set up for them.
It is very annoying for us as realtors because from time to time we have a client say “why didn’t you send me this property?” I will then look it up and I can’t find it on our system- then when I check the public site it appears but as a COMFREE listing. It’s frustrating because in essence we are not able to do our job because we are not getting all of the properties that are currently available on the market. It is actually contradictory to our Buyers Representation Agreement that we sign with our clients which states we will make our clients aware of all properties available on the market. In my opinion it should be mandatory that all listings be posted on the real estate board where the property is located. This is not only a problem for companies like COMFREE but for agents who are out of town unless they pay the extra fee for it to be on the board where the property is located.
Another downside when you list privately or with a company like COMFREE is it’s difficult to create the hype and urgency you get when you list with a realtor on MLS. There are fewer bidding wars with private sales and without the realtor to coach buyers on how fast the market is moving many buyer will not step up to the plate. Here is a testimonial that illustrates this point from one of our clients:
“Dear Curt and Erin,
We are so thankful and completely satisfied with the dedication and hard work you both put forth in helping us purchase our new home, and sell our existing home. In the beginning we were set on using ComFree to sell our house in hopes to capitalize on a commission free sale. Erin and Curt were both supportive in our decision, and still offered to help with anything we needed in order to help us sell quickly. Our ComFree package was purchased, and the appointment was setup, but something didn’t feel right with Erin and Curt. They called a few days before the appointment with ComFree and showed us a few different scenarios regarding a ComFree Sale and a Sale with Knight Homes. It truly showed the professional experience, knowledge and hard work ethic these two both have. We couldn’t believe that even though we had decided to use ComFree, they still cared enough to help us through the process. After that call we quickly called ComFree to cancel our appointment and package and went with Erin and Curt and Knight Homes. The Knight Homes sign went up on Thursday, multiple showings, and an open house on Sunday gave us multiple offers on Monday, where we accepted an offer substantially over asking that netted us more than we would have saved listing ourselves. We are so pleased with the outcome and if it were not for the hard work and commitment these two have to their clients, I honestly believe that the outcome would not have been the same. Thank you both very much!! We are Knight Homes Clients for life!!”
Finally a big variable you need to factor in is your time- if you are a parent or a busy professional do you have the time to take calls, show the home, host open houses, negotiate the contract etc. What is your time worth? For those that have ample free time, retired or maybe just enjoy the challenge- than for sure this might be the right move for you.
In Summary, can selling privately or with a company like COMFREE work- absolutely it can! If you have the time to do it, the right home, in the right location that shows well and you can attract the right buyer- more than likely you will be ahead of the game doing it yourself and not paying commissions. However if any of these variables is not right- you are going to find selling your home a very stressful and complicated process. You could end paying both COMFREE and Realtor Commissions when you switch if you can’t sell on your own- in turn netting you even less. Remember realtors don’t get paid unless the home sells- COMFREE gets paid either way.
Comments or Questions always welcome…