Do I Need a Real Estate Agent to Sell My House in Ontario?

Agent commissions are a large cost of selling a home, so many owners ask whether they can skip the agent altogether. It is a fair question, and the answer depends on the risks and the workload involved in your own sale.

This article explains how Ontario's real estate regulator treats sellers who go it alone, what an agent normally does, which duties stay with you either way, and the situations where going without may be reasonable. It is general information, not advice on your own sale.

Are you legally required to use an agent?

The regulator, RECO, describes an owner who sells without an agent as a self-represented party. That is someone who is not a client of a brokerage and has chosen not to use an agent's services, opinions and advice.

Being allowed to do it is not the same as it being low risk. RECO warns that the risks are significant for people who lack the knowledge to handle the deal, because the other side usually has an experienced agent. It recommends independent professional advice, and it says the self-represented person is responsible for protecting their own interests.

The exact wording of the Trust in Real Estate Services Act on this point is worth confirming with a lawyer if you are unsure, especially if your sale has unusual features.

What an agent normally does for a seller

In plain terms, an agent handles the marketing, the showings, the negotiation and much of the paperwork, and also acts as a buffer between you and strangers who want to walk through your home. Some of these tasks come with specific rules.

• Showings and access: access to your property without your agent present requires your written consent, and access beyond what you expressly authorize may be treated as trespassing.
• Competing offers: your agent must tell every buyer who submitted a written offer how many competing offers there are, and a verbal offer is not a competing offer under the legislation.
• Sharing offer details: your agent may not share the content of competing offers without your written direction, and you can never direct the sharing of a buyer's personal or identifying information.
• Dual representation: a brokerage acting for both seller and buyer in the same trade must disclose that to other written-offer buyers before an offer is accepted.
• Disclosure: if your agent knows of a fact you must legally disclose, the agent must disclose it to every interested buyer and work to get a written acknowledgement from each buyer who receives it.

With multiple offers, you decide how offers are presented and which one is accepted. RECO describes the options as accepting the strongest offer, negotiating with one buyer and rejecting the others, negotiating with one buyer while telling the others their offers are set aside, or rejecting all offers. An agent helps you run that process, but the decision stays yours.

What stays with you even with an agent

Hiring an agent does not hand off everything. The most important example is your duty to disclose serious hidden problems. That duty comes from case law rather than from the Trust in Real Estate Services Act, and it stays with you whether or not you use an agent.

A latent defect is one that makes a property unfit for habitation, dangerous or potentially dangerous, and that is generally not apparent on reasonable inspection. Patent defects, which a buyer or inspector can detect through reasonable observation and inquiry, generally need not be disclosed under the idea of buyer beware. But if you try to conceal a defect you may lose that protection, and you can be liable for a latent defect you did not know about if you were wilfully blind to it.

Taxes also remain your responsibility. The sale of a principal residence must be reported on your T1 return for the year of sale, on Schedule 3, even if the whole gain is exempt. For sales in 2017 and later, Form T2091(IND) must also be completed.

What changes when you sell on your own

Without an agent on your side, you take on the marketing, showings and negotiation yourself, and the duties that stay with you either way, such as disclosing latent defects, still apply. How the other tasks and rules above apply to your sale depends on your situation, so it is worth confirming with a lawyer. There is also a rule that shapes how buyers' agents deal with you. A buyer's agent cannot advise you on price or terms, and must first give you RECO's Information and Disclosure to Self-represented Party form. Brokerages also cannot enter agreements with self-represented sellers to assist them for a fee.

A real estate lawyer is a different role from an agent. A lawyer does not market your home. Getting independent professional advice, as RECO recommends, is worth considering before you sign anything. How a lawyer would help with your agreement and closing depends on your situation, so it is worth confirming with a lawyer.

When going without an agent can make sense, and what to do next

Selling without an agent tends to be more realistic when you already have a buyer, such as a relative or neighbour, when you are comfortable valuing your home and negotiating, and when you have time to manage showings and questions. It tends to be harder when the market is competitive, when your home has known defects, or when several offers are likely.

• Decide honestly which tasks you can do yourself: pricing, marketing, showings, negotiation and paperwork.
• Arrange independent professional advice before you sign anything, as RECO recommends.
• List every problem you know about, and think about which could be latent defects you must disclose.
• Set rules for who may enter your home and keep consent in writing.
• Expect buyers' agents to give you the self-represented party form and not to advise you on price.
• Speak to an accountant about reporting the sale on your tax return.

Frequently asked questions