Some of you will decide to sell privately for a variety of reasons. It might be in a bid to save some money, maybe real estate agents are not your kind of people, or it’s a strong sellers’ market so you think you have a good chance of doing it successfully on your own.
It’s definitely an option for those who have the time, the tech chops and some good marketing nous. According to Trade Me Property’s figures in June, around 6% of homeowners are trying to sell privately in today’s market*.
The sale process can take longer when selling privately. Ben Smith, Trade Me Property Lead Data Scientist, says if you choose to sell your home through an agent rather than doing a private sale, you’ll likely wait half as long.
“Very few private vendors sell in the first four weeks; their median sale time is 58 days. Agents sell much faster, their median sale time is 28 days^.” he says.
If you do try selling privately, you’ll find there are a number of regulations to comply with when putting your home on the market and you’ll need a good real estate lawyer to help you with the paperwork. Whether selling privately or through an agent, you must tell buyers about any issues with the property and again a lawyer will help you with this if you need advice.
As agents will tell you, the internet savvy real estate consumer can be very demanding during the marketing process. They want responses to their online queries within minutes – even if they live in a different time zone – and they expect a lot of online extras such as 3D tours, floor plans, videos and photos produced to high professional standards. And, of course, they want to come and see the home on their time schedule, not yours. If selling privately, this will be your job, if going through an agent, you can leave all this to them.
Paying a commission (a percentage of the sale price) to an agent is part of the deal if you take the agent option – the going rate starts at around 3% for the first $400,000 and 2% thereafter. For those wavering on selling privately or going through an agent, it might be an idea to think of it in terms of, “Okay, if I use an agent I want to get at least a 4% higher price than if I sold privately.”
Most agents will argue they can do better than this for their vendors.
Top-selling Bay of Plenty agent, Brent Bastin with Tremains Real Estate, tells vendors considering both options: “You’ve only one chance to get it right, this is your biggest asset whether it’s $500,000 or $5 million.”
A private seller won’t have an agent’s database of buyers, says Mr Bastin. While a private seller will say motivated, keen buyers will find their home on Trade Me Property and anywhere else they market their property.
A homeowner going solo won’t know all the places to advertise, argues the Bay of Plenty agent. The Real Estate Authority says that agents have access to specialist websites and print publications where private sellers aren’t allowed to advertise.
Good real estate agents use sophisticated technology and forecasting supplied by their offices to stay on top of markets and help sellers with their expectations. A motivated private seller with good research skills can also find statistics online if they choose to invest the time.
Most agents would say that their most important role is their ability to handle buyer objections and negotiations on bids. Good agents shine at this.
“You can’t put a value on that when it comes down to negotiating and fielding bids,” says Mr Bastin.
A homeowner selling privately can be emotionally attached to the home and find the bidding process stressful. Some will bring in a lawyer to help them through this.
To those who are selling privately because they don’t trust agents, their abilities and skills have greatly improved in recent years, with more professionals viewing it as a career and fewer in it for the lifestyle, says Mr Bastin.
The best agents are keeping the old school way of communication, nurturing human relationships and using the tech tools to be the best at what they do, he says.
Whichever option you choose, selling privately or through an agent, as a vendor, come well prepared to the process. Gather all the relevant market information you can and get the news out to all your personal and professional relationships that your house is on the market.
Article originally published by Trademe on www.trademe.co.nz/c/property/article
*Trade Me Property Site statistics, Private Residential for Sale listings, Jan – Jun 2020
^Trade Me Property Data Science Seller Type Study, September 2019.