Thinking of selling your home privately
This loaded topic has been hashed out by many an individual and real estate agent. Guess what? You don’t need an agent to sell your house. You can DIY it.
But before you take that plunge consider the following…
Selling your home. How hard can it be?
Now before I begin let me add that I have been marketing and selling residential and lifestyle property for 12 years now which, in my humble opinion, is long enough for me to have formed an opinion worth hearing.
Firstly, let me acknowledge that you don’t need me (or any agent) to sell your home. Depending on your level of experience you can likely accomplish this particular task on your own with the support of a decent solicitor to help keep you safe in a legal sense.
You may have a friend or neighbour who sold quickly privately and was quite happy with the price they received. I have even seen one or two private sellers get fabulous prices so I am not here to detract from or deny these peoples experiences but to outline the reasons that, 9 times out of 10, your net position will be better if you engage the services of a skilled real estate agent.
Can we agree that your net position is the one that matters?
Why would you do all the work to come out in a neutral position? And saving the real estate agents fee is only a win if you save more than you lose – in unrealised value.
I, like you, do not have a functional crystal ball so am not in a position to tell you with laser-like precision what could have/would have been but what I can share are some real estate principles based on my own extensive experience selling property and dealing with buyers and private sellers over the years.
But before I get into that let me ask you to consider why you use experts or skilled providers in other areas of your life. Reflecting honestly about these is a good start in helping you evaluate whether or not DIY’ing the sale of a high-value item like
The strange allure of DIY: My story.
Prior to meeting my fabulous husband Mark I was left entirely up to my own devices when it came to any kind of household maintenance. Now, you and I do not know each other but, if we did, you would know that DIY is not my gift. At all.
I turned off the power (safety first) and proceeded to dismantle the bits it told me to. Got rid of all the fine eggshell that had lined and choked the life out of it (in my defence, no one told me eggs could not go into a Wastemaster) flicked the power back on, and turned that baby on. It worked. I felt like a genius. Who needs Tradesmen when you have YouTube?! It was so easy!! Why on earth had I ever paid handymen when I clearly had so much natural
This is the bit where I point out that my little DIY excursion could have also gone quite differently as had some of my previous DIY attempts. I could have missed the bit about turning off the power and given myself the worlds fastest perm. I could have taken off my hand. Less dramatically, I could have broken something else dabbling in an area I had little experience in. Or my foray could have ended in nothing – “cue crickets”.
Now I’m a big enough girl to know not to put my hand into something with a blade with the power on so I was never in personal danger. The most likely risk was breaking something else and needing to replace the machine or fixing nothing at all. And the cost of a Wastemaster isn’t earth shattering so, for me, the risk was acceptable.
You’ll be pleased to know that I won’t be advertising my services as a handyman or sparky anytime soon or advising friends on how to fix their mechanical issues. One success does not an expert make.
Of course, I also have plenty of examples from when I was younger and a little less wise of when my ‘giving it a go’ cost me far more than I would have saved had my best-laid plans not gone terribly awry. Case in point: In my early 20’s my best friend convinced me to let her dye my hair. I was going for Heidi Klum but what I ended up with was more Ronald McDonald – only less sophisticated. I ducked into Rodney Wayne the next day with a scarf on my head and paid near double what it would have cost to do it right in the first place.
I’m sure you have one or two of your own stories.
But lets get back to your property plans…
If you are capable of selling on your own why engage a real estate agent at all?
Standard real estate fees are not something to sneeze at so I get why you might be tossing up going it alone.
But unlike my foray into extremely basic DIY maintenance, the outcome of your house sale could have life-changing consequences for you. It all comes down to risk vs reward.
Here are five things to consider when weighing up whether or not your hoped-for saving on fees is likely to outweigh the potential opportunity cost when going it alone.
1There’s selling and selling well. Are you going to hit the high end of market value? You only save more than you lose if you manage to extract maximum value from your property. There is easily a 10% range between the low end and high end of market value for a property.
2Are you going to identify and engage with your target market as effectively as a professional would on your behalf? Engagement with your entire target market gives you the greatest chance of creating competition and achieving an outstanding price.
3How is your target market likely to interact with you? What is the dynamic likely to be like in a negotiation? Are you going to be able to put their fears to rest like a professional can? Are they going to feel comfortable enough to pay you the money you want?
4Like it or not, you are emotionally involved with your home and/or your own financial situation. How are you going to handle it when buyers criticise your home or when someone makes you a low offer? It is hard to be objective about our own homes because they are so deeply personal. That lack of objectivity often affects private sellers reactions to typical buyer behaviour, ability to make the right decisions in a timely manner and the nitty-gritty but crticial aspects of the negotiation process.
5What’s the true cost of ‘Take Two’? If you fail to sell privately and need to engage the services of an agent down the track your actual cost will exceed real estate fees because, if you are being honest with yourself, you will also have to factor in lost opportunity. What am I talking about? Your first two weeks on the market. This is your Prime Time. It’s the period of time you get the most attention, are most likely to create competition and, when everything lines up perfectly, achieve the high end of market value and beyond. This is a key reason to get your strategy right from Day One in all respects including professional representation.
This article explains some of these concepts in a bit more detail.
Reasons why you are likely to NET better money using the services of a skilled agent.
A skilled agent makes your buyer feel safer about paying you the big bucks.
That’s what it comes down to. If
It’s important to note that the above is mostly not about you or your level of ability. Several years ago I sold a house for an elderly gentleman who had a successful career behind him as a real estate agent. He had advertised his home privately in Te Atatu South for the better part of a year. When he eventually asked for a hand I was able to help him move on at a level he was happy with within 5 or 6 weeks. He said to me “Maria, I could get the buyers here but I couldn’t close them. It was just different.”
The reality is, if the majority of buyers were as comfortable dealing directly as they are via a middle man, we would not have a real estate industry at all.
Bringing me to my next point…
Buyers have more protection buying through an agent and they know it. At a glance, this may sound ridiculous. You may be thinking
Should a buyer have a complaint, the Real Estate Authority will investigate and prosecute (where appropriate) without it costing said buyer a cent. Plus, the thought of the stress and potential brand damage done by getting dragged onto Fair Go or Target by a customer or client is truly nausea-inducing. The above two facts are enough to keep most agents committed to staying on the straight and narrow.
You can hide behind Caveat Emptor but an agent can’t.
If you lie to your buyer, your buyer may have to play hide and seek with you indefinitely and/or spend squillions chasing you through the Courts. See what I mean?
Note: Please don’t take the above to imply that I think you are dishonest or am holding out real estate agents as being paragons of virtue. I’m simply pointing out the additional consumer protection afforded to buyers when they buy through a professional.
Time and expertise.
Selling can be time-consuming and, regardless of what you know, you don’t know what you don’t know. Not all transactions are straight forward and when things get tricky having an experienced professional by your side makes a world of difference to your outcome.
And I’m not just talking about your agents’ buyer database here. I’m talking about their brands’ network, their relationships with agents from other brands and with professionals in related industries who are in a position to make your real estate journey that bit more comfortable and successful.
When an outcome is important, using professionals helps us avoid risk. Real estate is no different and I hope this article has, at very least, given you some food for thought.
Thinking of engaging an agent?
Nothing in this post should imply that ‘any old agent will do a better job than you will’ because that is simply not true.
Should you decide to use an agent, choosing a skilled agent is very important. I dislike the quip ‘Not all agents are created equal’ as it always strikes me as ambiguous and a wee bit pretentious. I prefer, ‘not all skill sets are equal’ – true in every industry, not just real estate. Make sure the agent you choose possess the traits and skills that will help your final position be the absolute best it can be.
Don’t know where to start? Check out my articles on agent selection and other helpful information for sellers in general.
Good luck with your sale!