Private Real Estate Sales – What You Need to Know in Ontario
Buying or selling a home is a big decision, and while most people go through a licensed real estate agent, private real estate sales (also known as “For Sale by Owner” or FSBO transactions) are becoming more common. Whether you’re looking to avoid commission fees or have more control over the process, it’s essential to understand how private sales work and what the risks and responsibilities are.
Here’s what you need to know if you’re considering a private real estate sale in Ontario:
Legal Considerations
Private sales are perfectly legal. However, you’re still bound by all provincial laws and regulations, including the Residential Tenancies Act, Real Estate and Business Brokers Act (REBBA), and Land Transfer Tax Act.
Why Go Private?
The main benefit of private sales are the cost savings. By cutting out the real estate agent, sellers can avoid paying commissions (typically 4–5% of the sale price). Buyers may also benefit from a more direct negotiation process. But cost savings can come with increased responsibility and risk especially if you’re unfamiliar with the legal process.
Marketing Your Property Without an Agent
Selling privately means you’ll need to market the property yourself. You can use platforms like Kijiji, Facebook Marketplace, or dedicated FSBO sites like FSBO.ca and PropertyGuys.com. to list your property. Having professional photos taken and a clean staging can create a lasting first impression.
The Role of a Real Estate Lawyer
Whether you’re buying or selling privately, you must hire a real estate lawyer. They handle drafting and reviewing the purchase agreement, ensuring compliance with local regulations, conducting a title search, and facilitate the closing process and transferring funds.
Pricing and Negotiation
Without an agent, you’ll need to do your own market research to price your home accurately. Look at recent sales of similar properties in your area (known as comparables or “comps”).
Negotiation can be a challenge especially when emotions run high. It’s wise to stay professional, and where necessary, lean on legal or professional advice.
Mortgage and Financing
Buyers should get pre-approved before entering a private sale. Sellers should ask for confirmation of financing early in the negotiation process.
Keep in mind that lenders may have extra requirements when dealing with private sales. They often require an appraisal to ensure the home’s value matches the purchase price.
Final Thoughts
Private real estate sales in Ontario can be a smart way to save money and maintain control, but they require careful planning, legal knowledge, and attention to detail. If you’re unsure at any stage, hiring a lawyer or consulting a real estate professional can help safeguard your investment.
The content on this post is for information purposes only and is not legal advice, which cannot be given without knowing the facts of a specific situation. You should never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. The use of the website does not establish a solicitor and client relationship.