PROS & CONS OF SELLING A HOUSE PRIVATELY
It has been reported that houses for sale privately are listed at 12% less that those listed with a licensed real estate agent according to Trade Me.
This has a big impact on your bottom line, so this, along with the number of people who have contacted us following unsuccessful private sales has motivated us to do some research to help you with your decision.
If your property is currently for sale privately and you want some independent advice about listing it with a licensed real estate agent, get in touch. We're here to help.
COST VS BENEFIT OF SELLING BY PRIVATE SALE
12% less and for a house worth $500,000, this would equate to asking $60,000 less or there abouts or for a house valued at $700,000, it equates to $84,000. At the lower end, selling a house privately for $350,000 may cost a vendor 42,000.
If saving commission on a real estate agent who charges 3.95% is the motivator for listing a house for sale privately, it doesn't really stack up. This real estate commission rate on a house sale of $500,000 equates to around $20,000 which is at the highest commission rate generally charged.
If you negotiate the real estate commission rate to say 2.95%, the commission would only be $14,750. Quite a difference in comparison to the $60,000 and we haven't taken into account strong negotiation skills andd other factors that can often achieve higher than expected sale prices.
Many of our clients have come to us disillusioned after a failed private house sale, desperate to sell at almost any price. It never has to be like this so get in touch or find out more about vetted real estate agents first.
THINK CAREFULLY ABOUT SELLING YOUR HOUSE PRIVATELY
Before you decide, you should find out exactly what real estate costs are and how you can keep commission and other fees to a minimum.
The financial value of a competent agent can equate tens of thousands more in a sale price, than any commission you were trying to save.
Even lawyers and real estate agents use real estate agents to sell their houses.
Download the Sell Smarter Kit to get you started.
BUYING OR SELLING REAL ESTATE IS A LEGAL PROCESS
Be warned also, that legal responsibilities, (mis)information and documentation are your responsibility if you choose not to use an agent.
The consequences of information omissions, mistakes, inexperience - or worse, being taken advantage of by buyers or sellers, can be far reaching.
And moreover, there is no come back if it goes wrong.
If you sell a property privately and withhold information that buyers should be made aware of, you may put yourself at risk of legal action.
A successful real estate outcome has a lot to do with a planned, coordinated and managed legal process by a competent, licensed real estate agent.
If your bottom line at the end of the process is your priority, use a vetted real estate agent who has met a criteria. It's the safest way to choose a competent agent and it's a free service.
MISSED OPPORTUNITIES WHEN SELLING PRIVATELY
Statistics tell us that you will get more buyer interest in the first week on the market than in any other week of your on line campaign.
But a house for private sale will not even get onto New Zealand's leading real estate websites, because only properties listed with a licensed real estate agent can. So a private sale can really restrict the number of potential purchasers who will get to view the property.
- You will not be able to list on international real estate websites without a licensed agent.
- Your property will likely receive far less buyer inquiry due to not being more widely marketed.
- You will not be able to target your property to particular buyer markets.
- Tens of thousands of email alerts each month are generated by realestate.co.nz - they go right into home buyers' email inboxes and you would miss this opportunity.
Real estate is not for the faint-hearted because optimum sale prices, shorter sale time frames and best practice real estate don't just happen by accident.
Approximately 11 per cent of properties are for private sale and in our view, too many of them have to go to market a second time with an agent after struggling to find and keep buyers who often don’t want to deal directly with the home owner.
Legal documentation or reports can be requested by prospective home buyers. Providing them can be a condition of a sale.
We are in a post major-earthquake, leaky home and methamphetamine world and buyer checks of these are added to the list of documents you may need to provide quickly, before your buyer starts looking at competing listings. Be sure you know what you are in for.
It can be at the point of going unconditional, that many potential real estate sales fall over and the buyer has backed out.
If you’re considering a private sale, we advise you to be informed about taking all this on. The costs of getting it wrong might be more than simply paying the real estate commission.
If you've been put off real estate agents for some reason in the past, contact us first. We have restored the faith of many of our clients. See what they have to say here - do it once, do it right.