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FSBO franchise for sale

By Robert Morrow

Real Estate Agent with Chase Realty Inc. Brokerage

December 16, 2008 03:26 PM

I have always kept a close eye on the leading private sale companies/websites in Canada. I feel it is important for REALTORS(R) to know what's going on out there in the FSBO world. Most of the time, consumers of this product eventually turn to the REALTOR(R) industry for assistance when there homes don't sell using these technologies.

But some of the companies have been growing aggressively and we are lead to believe all is rosy for the future of the FSBO business.

So why then is one of the major chains allowing a franchisee to sell a key location here in Hamilton?

As you can see from this link, PropertyGuys Hamilton is up for sale. It is only one year old and when it first arrived, it annoyed many a Real Estate agent because they were giving their services away for free just to get signs on lawns. Although I didn't need the competition, I did admire the strategy and for a while, it seemed they had wedged their way in.

http://www.businesssellcanada.com/81216002.htm

But something has gone wrong. The economy? Or maybe the FSBO model just isn't working anymore, if it ever really did.

Is this the beginning of a sell-off of the country's largest FSBO franchise? Or is it just a one-off?

I'm open to comments, for and against.

Robert J. Morrow is editor of www.HamiltonHomeReview.com, an online real estate magazine serving Greater Hamilton, Ontario. Click here for a FREE SUBSCRIPTION sent to your email monthly. Click here to receive new Hamilton area listings in your email daily.

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Anonymous

Mike Merritt

Hi, I'm Mike Merritt - operator of the www.BusinessSellCanada.com website.

Robert just found the 'propertyguys' business (franchise) for sale in Hamilton. My site also has the Lethbridge, AB one at: www.BusinessSellCanada.com/80706002.htm and the Markham, ON one at: www.BusinessSellCanada.com/80918007.htm

So I'd say it could be either a problem with the head office arrangements or it's just the normal turnover in people selling businesses. I get a regular stream of other franchise re-sales which appears to be just the normal rotation of people wanting to sell their business.

Mike Merritt, www.BusinessSellCanada.com

Dec 17, 2008 07:44 AM

Robert Morrow

Chase Realty Inc. Brokerage - Hamilton, ON

Maybe it's just the franchise concept in general is not as attractive as it used to be, especially in tougher times, as Mike suggests. But then again, if the propertyguys.com franchises are as successful as they claim them to be--and remember, this is still a fairly young franchisor--then why are at least 3 territories for sale?

Robert J. Morrow

Dec 17, 2008 02:18 PM

Anonymous

Mike Merritt

Hi,

Mike Merritt of http://www.BusinessSellCanada.com again. And guess what ... The "PropertyGuys" listing of their Business For Sale in Hamilton (actually 4 franchises in and around Hamilton) is now "Withdrawn". See: http://www.businesssellcanada.com/81216002.htm

It wasn't "Sold" .... at least they did have the option to erase it as SOLD and they didn't take it. And it was removed early since the ad was PAID for until Feb 15th.

So now what does that mean ????

The other 2 are still listed for sale on the site: http://www.businesssellcanada.com/80918007.htm (Markham) and http://www.businesssellcanada.com/80706002.htm (Lethbridge, AB)

Mike Merritt - http://www.BusinessSellCanada.com

Jan 08, 2009 07:26 AM

Anonymous

Robert Morrow

Interesting Mike. Is it the economy, and their waiting for a more marketable time? Or is it that no one is willing to pay for young franchises that apparently didn't succeed in this marketplace? In a way, it's unfortunate that the franchise I consider to be the best of the bunch, is the first to find difficulty here. But on the other hand, this should send lightning bolts of reality to the other 12+ FSBO companies operating in this area. The competition in the FSBO field is incredible here and the entrenched leader is not the national leader. Then, you have to compete with REALTORS(R) who have the unabashed monopoly of access to the MLS(R) system, and the ability to provide a monopolized service to buyers free of charge (if they choose).

I believe the Real Estate industry will change dramatically in the next 10 years. But FSBOs, as they operate now, won't be the answer.

Thanks for the update Mike.

Jan 10, 2009 03:03 AM

Anonymous

Frank

I think that their are other way better FSBO companies in the Hamilton area (Privaterealestate.ca and ByTheOwner.com). Propertyguys just sells franchises and they really don't care if their franchisees or their customers succeed. A Propertyguys franchise costs about 50K and then the franchisee needs to pay a lot of money every month to keep the franchise so they all quickly go out of business. In Ontario you can sell a franchise without showing the financial statements of the other franchises, that's why Propertyguys can trick people into buying franchises. Some provinces (Alberta) require that the franchisee be able to see the financials and that's why no one buys a Propertyguys franchise in Alberta!

Frank

Jan 13, 2009 04:45 AM

Anonymous

Robert

Thanks for the input Frank. I agree with you that, in this area, privaterealestate.ca is likely the leader due to size and apparent success. I like your thinking about propertyguys.com's strategy. Any one out there had any direct dealings either as franchisee or seller?

Jan 13, 2009 04:59 AM

Anonymous

Rich

Checked the link, and it appears the franchise has been sold already. Faster than most homes that are listing on the market. Big problem or just a big opportunity?

Realtors don't list their business for sale when it no longer works - they just dissolve it. Maybe it's the Realtor model that is wrong.

As long as Realtors charge commission, there will always be a FSBO somewhere. And there will always be someone willing to sell them advertising too.

Feb 02, 2009 06:09 AM

Anonymous

Robert

Thanks Rich for checking that. You could be right. At the moment, people out of work are looking at franchising as an option, rolling savings into their own employment plan. (This year's Franchise Show in Toronto is supposedly receiving unprecedented interest in the form of pre-registrations).

Also, some disgruntled REALTORS(R) will try the FSBO model. And I agree that the REALTOR(R) model is broken. Some of us would like to see a more flexible system while still maintaining monopoly on access to those who take the time to learn the trade and get licensed.

By the way, I asked a recent FSBO seller what it had cost him to promote his home after he sold it. He said about $3,000 when he included advertising, signs, website fees, etc. Plus, he wondered if he would have saved three months of mortgage payment had he been on the MLS(R) system right away--another $3000+. A lot of people don't take into account that most FSBOs take considerably longer to sell than those listed on the MLS(R) system.

Feb 02, 2009 06:37 AM

Anonymous

Ron Desilets

I think Property Guys.com just charges too much money. The initial buy -in is $50 to $80K and then they want monthly royalties as well. A person would need to have a large pool of cash to live out the 2 years time frame it will take to become known and profitable. The PG franchise in Winnipeg was for sale last year too. I don't know if it ever sold but I don't see anyone running it now.

The stats do indicate that the FSBO enterprise is in a growth phase. It is much more developed in the USA than in Canada. The internet is changing the way the realty business is done. It's not a matter of if FSBO will succeed - only when.

Feb 02, 2009 08:30 AM

Robert Morrow

Chase Realty Inc. Brokerage - Hamilton, ON

Looks like the Hamilton Property Guys franchise is back. And with a twist. Now they state they can offer MLS exposure with no commission. Anybody an idea how that's done?

Here's the Kijiji link:

http://hamilton.kijiji.ca/c-ViewAd?AdId=106065210

Feb 11, 2009 01:03 AM

Anonymous

Jim

It appears that the Lethbridge franchise is now sold from the link above. FWIW the Lehtbridge owner is at retirement age and wanted to get out to travel etc., not sure how a few franchises for sale country wide can be seen as a failure of the FSBO model?

Mar 20, 2009 09:20 AM

#11

Not In Real Estate Any Longer

Autaugaville, AL

Interesting conversation, Robert. Just this week I have started one about Property Guys as well, not knowing this one was here.

My topic was basically about how they can actually slander REALTORS® by stating on their site (and I paraphrase):

REALTORS® won't tell people how easy it is to sell their own house, because we want their money.
REALTORS® don't know more than the homeowner does about setting a price for their house - it's all about supply and demand.
REALTORS® advertise ourselves and not a seller's house, to trap buyers into seeing a house they aren't even interested in, wasting everyone's time.

And then I got one of their postcards in the mail, and it said, and I quote:

"More and more home sellers are now discovering how paying themselves the commission makes more sense than paying thousands of dollars to some Joe Schmo agent."

Joe Schmo agent?

Why not just say, "to some *sshole agent". That has the same connotation.

These guys don't seem to have to answer to anyone and I am very interested in finding out how we can force this particular franchise onto the same playing field as we're on.

Any ideas?

Mar 29, 2009 03:59 AM

Not In Real Estate Any Longer

Autaugaville, AL

Frank said: "Some provinces (Alberta) require that the franchisee be able to see the financials and that's why no one buys a Propertyguys franchise in Alberta!"

I really don't want to debate, and I do wish what you said were true, but there are 5 franchises in Alberta.

Mar 29, 2009 04:23 AM

Anonymous

franchise opportunities

<a href="http://www.franchisereviewboard.org">
franchise opportunities</a>

Jul 12, 2011 07:39 PM

#14

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