He’s 43 and has seven hundred thousand dollars in his chequing account. You’re nuts, I said helpfully. “Yah, but it’s my house money,” Lyle said. That was eight months ago. Since then the high-rolling marketing exec has emailed me a dozen listings of houses in the west end of Toronto, asking for an opinion. Most were junk. I told him.

Days ago he sent another which, at $862,000, had some promise. “I’m buying it,” he said. I asked how the price compared to recent solds in the hood, and he had no idea. “It’s a private sale,” Lyle gushed, like he’d just discovered insulin, “so I don’t have to pay commission.”

Not a day later I was talking to a couple in Kelowna, keen to purchase a house on one of those dusty hills for a shade under five hundred. Another FSBO (For Sale By Owner), and the plan was to buy it firm, then market their current home themselves, “saving a massive amount on both ends.” So, how do you plan to make the offer, I asked? “We’re taking them out for dinner at Joey’s, and maybe get them a little hammered.”

As you know, FSBO is sweeping the nation. Some people buy or sell on Craigslist. Others use outfits like The Property Guys. Some invest $3.99 on one of those tacky orange signs you buy a Home Depot, and nail it into the lawn. Given that house porn is part of daily life, and people are inherently cheap, the allure of selling or buying without the help (and cost) of an agent has proven irresistible.

Besides, most of us hate realtors. Especially the ones who type it in CAPS and use that little trademark thingy. Are they that insecure?

Having said this, God made real estate agents for a reason. Besides humour. And it’s time this pathetic blog did something heroic, and defended them. Sort of.

Of course, standard commissions are obscene. Handing over an average of 5% to sell a house in a hot market is a certifiable act. But in a comatose market, it could be worth every cent. The good news is the entire industry is far more malleable than in the past, especially since the federal Competition Bureau crawled up its butt. Changes in MLS allowing FSBO listings (sort of) are a case in point. Plus, commissions are now negotiable.

Sadly, past arrogance, intransigence and a love of monopoly already earned realtors a rep slightly below that of pet abusers or the people who feel you up in airport security. And it’s this visceral dislike which has made the private real estate sale hot.

Too bad. This can be a dangerous thing.

For example, FSBO sellers are considered prey by sophisticated buyers.  Everyone knows the main reason you’d sell your own home is because you’re cheap and naive. And since owners are so entangled with their properties, they can be toyed with. This makes them fun during negotiations, when they freak at criticism or recoil at a low-ball offer. So you can mess with their heads, since their decisions will likely be hasty and emotional. Not like negotiating with a dispassionate third party, experienced at cutting deals. This is why most FSBO sellers end up selling too cheap.

Speaking of which, almost every FSBO house goes to market at the wrong price – usually too much. Instead of reflecting market conditions and buyer realities, do-it-yourself sellers sit around and decide how much they want and need. The research they do is gawking at what other properties in the area are asking, and then adding more. After all, their houses are the best. Ever.

But a mispriced property is a seriously bad idea. It goes stale. The price gets cut. Then some smart buyer comes along and demands a further discount, because he knows you’re not paying commission. So, you end up having gone through this – the advertising, the phone calls, the showings, the vacuuming – for nothing.

Far better to know exactly what the selling prices in your hood have been over the past months, not just the askings. A smart realtor in a fading market might actually price the place below neighbourhood comparables, then use his company’s marketing clout to try and spark a bidding war.

And what about the structure of a FSBO deal? What if a cunning buyer gave you an offer filled with conditions? Would you know enough to accept some and reject others? To generate proper waivers for a legally-binding agreement? How much would your lawyer charge to shepherd the deal along at every stage? What protection do you have at the last moment if the buyer fails to close? Are you compliant with provincial laws?

Meanwhile a buyer entering into a FSBO deal is even more exposed. Like Lyle, he might be handing over hundreds of thousands of dollars in a transaction devoid of a property disclosure allowing him to sue for defects later on. Or buying without a survey, opening up boundary issues. Or putting down a deposit that will never be seen again if the deal goes south.

A good real estate agent doesn’t let this happen. So even if you end up offering on a private sale, you should have one to represent you, do the research for you, bargain for you, and protect you. Will that cost you one per cent, or a half a per cent, of the price? Probably. But it could also be the best insurance money possible. The seller might be a tightwad, but you’re the one shelling out the money. Buyers wear 100% of the risk.

There are lots of things in life to be cheap over. Selling or buying a house worth five or ten years worth of income ain’t one of them. Get an agent.

Just use all the money you don’t pay reading this.