When thinking about selling your home, it can be tempting to try and save yourself thousands of dollars in real estate agency fees by conducting a private sale. The media is full of stories about how houses are selling like hot cakes and that it’s a rampant sellers’ market. How hard can it be? Let’s look at the realities of selling privately vs. with the help of an agent.
Many people do sell privately very successfully, especially in a buoyant housing market, and save themselves a bundle. However, you have to be realistic about your own circumstances and your personality in order to decide whether a private sale will be best for you. If you’re a single parent with three kids under five, the open homes are going to be no fun for anyone, and your ability to chase up prospective buyers and truly “sell” your home is likely to be less than ideal.
First and foremost, you have to market the property effectively, and patiently answer phone calls and oversee crowds of people – many of them not remotely interested in buying – as they trample through your home, then make the follow-up calls. When you finally do get an interested party, you have to haggle over the price and conditions. Ask yourself if you have the right personality to do this. If you are a shrinking violet type, this is not the job for you.
On the other hand, nobody knows your home quite like you do and arguably nobody is in a better position to sell it. If you have the time, are well-organised, energetic, good at dealing with people and don’t feel mortally wounded every time a buyer offers a minor criticism of your decorating, then it’s a viable option to consider that could pay off big time.
Who can help?
Very few sellers conduct private sales with absolutely no assistance. There are companies which can help you to sell privately and offer support throughout the process. The fee they charge depends on the marketing package you choose and is payable whether the property sells or not. Fees can be as low as several hundred dollars. There are also a number of unconventional real estate agencies that offer hybrid services where you undertake the open homes but they do the follow ups and negotiations.
Additionally, there are cut-price or budget agencies that simply offer discounted, or creatively structured, fees.
Selling through an agent
The right agent can be a real asset when selling your home. Real estate agents are professional salespeople, and the good ones are practised at getting the highest possible price for each individual property. If they can get even 5-10% more than you can, they’ll more than have justified their fee. They often bring some key elements to the sales process.
- Recent sales data – in negotiations it is critical to be able to rationalise your price expectations. Agents have industry price information allowing them to do just that.
- A buyers’ database – agents will often have a list of active buyers in the market for your type of home who have missed out on other sales. They are just a phone call away from viewing your home.
- Collective sales effort – most of the larger agencies encourage agents to view and quietly market all of their office’s listings, not just the agent’s own. Because of that, you can potentially connect with a very large number of potential buyers.
- Experience – good agents will have seen it all before. Property sales rarely go smoothly, it’s often necessary to deal with town planners, engage various due diligence professionals, know about zoning restrictions and infrastructure developments to alleviate buyer concerns in order to get a sale across the line. An agent can help point buyers in the right direction to seek reassurance and overcome obstacles to buying.
So, what will the agent cost me?
It surprises many sellers that the level of real estate agents’ commissions can vary quite significantly according to the company and service provided. In general, they charge a percentage of the sales price achieved. Unlike many of the private sales options, agents will only charge you if your home sells; no sale, no fee.
Leading agency fee comparison
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When thinking about selling, it’s important to consider all your options. It’s not just a question of Agent vs Private Sale, there are an array of private sales services available at a variety of costs depending on how much or how little you want to be involved. Similarly, agents’ fees and services vary and you should know what’s available to you. Remember also that listings are thin on the ground and sellers are in a strong position to negotiate on standard agency fees.
Good luck, whichever option you choose!
This article is intended as a general discussion only. BNZ recommends the recipient get independent advice. The views expressed are the writer’s own and do not necessarily represent those of BNZ or its related entities.