Should I sell my property myself?
What if you want to avoid paying real estate commission altogether? A small number of people choose to try and sell their property themselves and save the fee. There are pros and cons to taking this path, so make sure you know what you’re getting into before you decide.
If you do decide to do so, you’ll need to:
- Settle on a sale price
- Pay a solicitor to draft a contract of sale
- Put together a marketing campaign
- Prepare and/or style your property for inspection
- Hold open inspections
- Negotiate the price confidently and without emotion
- Receive the deposit and hold it somewhere safe until settlement
There are several online sites which help sellers to market and sell their properties without an agent, or you can go it alone.
If you’re not in a rush to sell, a private sale might suit you. You can take your time in considering offers, extend the settlement period and select the buyer you prefer. With nobody’s schedule but your own in the mix, it can be a far more relaxed process.
This is the obvious reason why people choose to go it alone. By selling your property without an agent, you’ll save the 2% or so that you would otherwise pay in commission. You’ll also save on auctioneer fees.
You will still incur marketing expenses, of course, and you won’t get the discounts on ad spend that publications give agencies that buy in bulk. But if you’re on a strict budget these can be kept to a minimum, although you will sacrafice reach.
Be prepared to spend some serious time selling your property. You’ll need to make time for potential buyers to look at the home either via open inspection or by appointment. You’ll be returning phone calls and responding to enquiries yourself. And once you find a buyer who’s willing to put in an offer, you’ll need to do the back-and-forth negotiations.
Expect to have to take time off work if you work full-time and spend your free time on the telephone. You’ll also have your Saturdays and potentially Sundays tied up doing open homes.
2. Lower sale prices
Buyers know that a private sale means the seller is paying no commission, and they’ll often try and negotiate a lower price based on that. You might find that the savings pass to the buyer, not you.
Not only that, but you have to get the pricing right to start with.
If you don’t know the market well, it can be easy to miss the mark. Too low and you’ll walk away with less in your pocket. Too high and you won’t get any offers. If the property sits on the open market for too long, the listing becomes ‘stale’ and is seen as less desirable by potential buyers. If you reduce the price, you’ll look desperate and make yourself vulnerable to buyers looking for a bargain. Many sellers have found themselves selling for less in the long run because they priced the property wrongly to start with.
3. Slower sales
A private sale process usually takes longer than it would if you used an agent. That’s partly due to logistics: because you’re not a professional real estate agent you’ll probably be slower in returning phone calls and less able to host multiple inspections. You also don’t have a ready database full of potential buyers. A strong database is an agent’s most effective tool for selling quickly—this is how ‘off market’ sales are made prior to any advertising.
A private sale also tells the buyer that there’s no urgency. They’re more likely to take their time deciding whether to put in an offer and the negotiation process can become quite drawn out.
Ken and Cheryl Fleming decided to sell the family home once their adult children had flown the coop. The house had gone up considerably in price since they bought it in the early 1990s — but then again, so had the price of the new townhouses they wanted to buy.
To save some money, they decided to sell the home privately. Now in their late fifties and with no children to care for, they had the free time to return phone calls and organise opens themselves.
The enquiries came trickling in slower than they expected. One couple seemed interested, but asked question after question before committing to an inspection. Then they rescheduled twice. An investor came to inspect the home, but went away saying that she would think about it. A young family seemed more promising. They liked the big garden and appreciated all the storage and space on offer.
They needed to get their finance in order, though, before putting in an offer. Then they came back asking for a lower price than the Flemings were really happy with. They also wanted to include a condition that the Flemings would do some repairs before settlement.
By now, the home had been on the market for several weeks and had sunk to the bottom of the real estate search results. New enquiries were drying up. The townhouse that the Flemings had had their eye on was sold to someone else. They became worried that they would never find a buyer, lowered the asking price, and ended up selling for $30,000 less than they had hoped.
Choosing a real estate agent
When you’re choosing a real estate agent, cost should not be the only factor you consider. But how do you know if you’re going to get your money’s worth?
Look at individual results
High sales volumes might look impressive, but how do you know that the agent won’t just take the first offer that comes along?
You want someone who will negotiate smartly and get you the highest possible price. For that, you need to see what they’ve achieved for similar properties. Ask the agent to show you some of their recent sale prices and compare them against other properties in the area
Get personal recommendations
Ask friends and family for their recommendations, but be discerning. The best agent is one that fits your needs and not everyone is the same.
A local agent will know the market better and be able to champion the location for you. They’ll also be better able to assess the value of your property.
Check their work
Go to an open inspection that they’re hosting. Attend an auction. How do they treat interested buyers? Are they friendly, punctual and knowledgeable?
A great agent should be able to suggest a marketing campaign that’s tailored specifically to your property. Ask them who they see as the buying demographic, what the buyer behaviours are and how they plan to target them. This will sift out the one-size-fits-all agents from those who will customise their approach to you.
Get an appraisal
Any agent you’re considering will be happy to give you a free appraisal of your property. Don’t just pick the one that tells you they can get the highest price, though. Ask them why they think your property is worth what they say it is and how they will achieve that.
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