Selling Your Home Privately vs Using A Real Estate Agent

for sale by ownerWhen considering a move, the concept of selling your home yourself can appear very tempting and may at first seem like a great money saving tactic. After all, avoiding paying an agent thousands of dollars is pretty appealing right? The trouble is, whilst it may seem like you are saving money…in almost all cases, running the sales campaign yourself will NOT allow you to get you a premium price for your property.

Rather, it is very likely to take a lot of energy and a long time to achieve a poor sales price…and to add salt to the wound, it could potentially land you in legal troubles and provide undue stress… which really isn’t appealing at all! So if you are considering selling your home yourself, it is crucial to consider the following information before you go ahead and do so: Your home is likely to be your number one asset and as such, selling it will be one of the most important financial transactions of your life. Maximising profits and achieving top dollar needs to be the primary concern. As such, a high level of expertise is essential in the following areas:

Marketing

Many sellers are prone to believing that marketing their home will be easy and that their property will naturally stand out in a crowd and sell quickly for good money. If I had a dollar for every person that said to me “I know my property will sell well” I would be very rich. Sadly, no matter how lovely your property is, buyers are savvy and looking for good value. So it all comes back to making buyers see value in your home at the highest possible price. For example, if you have a stunning house worth around $1M that is beautifully presented, if you market it poorly and/or put a nice big price tag of say $1.2M on it, you will be likely to have very low activity on your property and end up selling below market value (somewhere in the $900 vicinity I would expect after months on the market). On the flipside, if you market the property well and price it around $1M you are likely to achieve solid offers in the $1M + range which a good agent can then negotiate upwards even further. Achieving a price of $1.1M or more for a $1M home is achievable if done correctly. So saying “my home will sell well” is irrelevant if you don’t market your property correctly. A good real estate agent will have the knowledge to do this. They will know the local market intricately. They will also know who your target market is and most importantly…how to target them. Spending money on advertising your property without such knowledge is like taking a blind stab in the dark and hoping for the best. It’s madness. Furthermore, it will also cost you additional money as you will not be entitled to the reduced rates and premium positioning that agents are entitled to due to their affiliations with the local papers and major internet sites. You will also have no relationship with the media so your chance of getting a free editorial or any unpaid exposure is highly unlikely. Another important factor to consider is that you will not have access to a large network of agents who will be able to bring buyers to your property. Nor will you have an inter-connected extensive database which every great agent will have. You will literally be on your own with no experience, poor knowledge and a lack of tools. You will be at an immediate disadvantage prior to even opening your door. Are alarm bells ringing yet?

Negotiations

Some people have a natural ability in dealing with others. If you are considering selling your own home then chances are you consider yourself one of these types of people. What you need to know though is that chatting to people or enjoying a conversation is very different from having the capability to sell a home. Negotiating with buyers is a learnt skill. Even the best agents train regularly to keep on top of their game and are always seeking to improve their techniques. To negotiate you need to be knowledgable, confident and highly professional with every phone call, buyer appointment, open home, text message and email. You need to keep in mind who your target demographic is and sell the home accordingly. If you don’t know who you are targeting, you may focus on aspects of your property that you personally love but the buyer may find completely irrelevant. You may also tell them about aspects of the home that suit your needs but by doing so, unknowingly point out why it won’t suit their needs. Knowing what your buyer want to hear is a great skill that top agents acquire by studying the local market. Another important factor when selling your own home is to ensure you keep your emotions at bay. This will prove to be extremely difficult, if not impossible. You are going to be dealing with buyers on a daily basis that find fault in your beloved home. Even the buyers that love your home and want to try to buy it are going to be criticising it as they will be looking to find leverage to bring the price down. If you are emotionally connected to the home you will naturally be defensive and protective of the property. This will be damaging to the negotiation process and may result in your best buyer pulling out altogether. The time involved to manage the buyer enquiry for a successful sales campaign is huge. One person can never manage it alone as missing just one call can be costly. If you have marketed it correctly it could turn into a full time job. Without any real estate experience you won’t know how to qualify and sort the good buyers from the time wasters…so you will end up working countless hour for no apparent reason at all. So be sure to make plans to take time off work for the duration of the sale. If you don’t, you will be sure to miss good buyers and frustrate those that you are dealing with.

Administration

Selling a property is far more than haggling with buyers to get a good price. Since there is big money involved, there will be a mountain of paperwork involved as there are some very strict and non negotiable legal procedures that must be adhered to. Before you take your property to the market you need to be clear on these as there are a lot of things you can and can’t do that you will be expected to be aware of. Knowing all the legal boundaries requires specific training so be very careful if you don’t have this knowledge as you could end up in some serious trouble. You must also be prepared for buyers presenting you with offers with specific terms and conditions attached. If you are not an agent these can be tricky to understand and even more difficult to counter negotiate. An agent will be able to assist you understand such terms and conditions and ensure you are not taken advantage of by experienced or troublesome buyers.  So if you are thinking about selling your home privately, I urge you to reconsider. Moving houses is stressful enough without trying to tackle a job you are not trained nor equipped to do. Instead, appoint an expert to ensure you achieve the best possible price for your number one asset…as at the end of the day, it will enable you to achieve a far superior price for your property without the headache!

About Tim Cullen

Since joining McGrath Estate Agents 18 years ago, Tim Cullen has defined himself as a first class industry leader with an outstanding track record and rapidly growing client base. He consistently ranks in the top 50 agents nationwide in the Real Estate Business’ Top 100 Agents List, ranking as high as 21st in Australia. He is passionate about real estate and delivering premium results for his clients.

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