If you’re looking for a way to cut costs when selling your property, you may consider self-selling. Self-selling is when you don’t use the services of a real estate agent and decide instead to handle all the aspects of selling a home yourself. Although this can potentially save you a bundle of money, be sure that you know what you’re getting into because without experience in the real estate industry, you could very well end up losing a lot of money in the long run. Scrimping on hiring a real estate agent could cost you if you end up selling your house for less than it’s worth, or if you spend more money on marketing and preparation than you would have.
Before making this decision, it’s a good idea to weigh all of your options carefully. Talk to real estate agents, or use our service to receive proposals from local real estate agents and get an idea of the costs involved in selling your house – there’s no obligation to work with any of them, but it does let you see what’s out there before you decide whether or not to use an agent.
What Goes into Selling a House?
The idea of saving thousands of dollars on a real estate agent is certainly tempting and, if you have the time and motivation, worth looking into. However it is vital to consider all of the pros and cons. This is most likely to be one of the most important financial transactions of your life, so take your time and get as much information about all your options before you proceed.
Selling a house can be broken down into three rough steps:
- Preparing to Sell your Home
- Marketing your Home
- Administration and the Sale of your Home
Preparing to Sell your Home
Preparation involves everything from cleaning and repairing the house to increasing its equity – steam cleaning the carpets, mowing the lawns, fixing those cracks in the walls, adding a fresh coat of paint, tidying everything and making the house ‘inspection ready’ – to valuing the home, setting a price (or reserve if you are planning to auction) and getting all the legal paperwork in order.
If you are handy and motivated, the cleaning and minor repairs are usually something that you can do yourself – or organise tradesmen without the aid of a real estate agent. That said, there are two things that are important to remember.
Firstly, cleaning and repairing a home for sale, is different to normal cleaning, strangers will be going through the house searching for imperfections to use during negotiation. They will want to find anything they can use to negotiate a lower sale price and are likely to look at your home in a different way than you do. It might help to have someone else come through your home and look at it objectively.
Secondly, a real estate agency will have a bank of tradesmen and experts in home staging that they work with all the time, and will not only make any repairs much easier, they probably won’t make you pay for them up front.
Real estate agents are the professionals, they will charge you for the service, but they know exactly what your home needs to be the most appealing to potential buyers, and how to make that happen.
Valuing a home is a difficult process that can have a major impact on the final sale price. You’ll need to have a strong working knowledge of your local real estate market, as well as an impartial idea of how much your home is actually worth. This knowledge is necessary for valuing your home, as without it there is a risk of pricing your home too low or too high. Should your set the bar too high, you could rule out interested buyers. On the other hand, setting a price that’s too low will result in a smaller net profit. A qualified real estate agent is interested in achieving the highest possible sale price for both client satisfaction and the highest possible commission. Real estate agents will do everything in their power to achieve this and will have the background information necessary to accurately price your property.
Of course, you can always hire you own independent property valuer – you can find a number of them in your area.
Marketing your Home
Many sellers imagine that the actual process of marketing and selling their home will be fun. After all, you know all of the best features of your home, so you would be the best person to sell it, right? This is not commonly the case. Marketing a property means that you have to find ways to make it stand out from a sea of competition and you must know your target audience. Marketing fees can be quite costly, particularly if you don’t have professional contacts of your own. A real estate agent knows exactly how to access all of today’s potential forms of advertising media, and will know which of these are the most cost-effective. Agents have professional affiliations with marketing and advertising avenues, which can lower costs and open doors.
Furthermore, some of the top real estate listings websites (such as Australia’s top real estate website, realestate.com.au) only allow licensed real estate agents to post properties. Not posting your home here, could potentially lose a huge number of buyers.
Advertising and marketing costs include listing fees, other media, printing expenses, signs, and man-hours. You’ll also need to consider inspections and enquiries from buyers. If you decide to go it alone, there are companies that specialise in helping you do it yourself, supplying signs, templates for ads and many of the things you’ll need to market your home, but there are always likely to be more costs and aspects of the process that you can’t account for. When you use a real estate agent’s services, you can usually agree in advance on a real estate package deal that covers these costs.
Selling a property requires handling a high volume of enquiries, most of which will not result in a sale. This can turn into a full-time job during busy times. You’ll have to stay polite and professional as you handle every phone call, email, and inspection, because you don’t know who will end up being the eventual buyer. In many cases private sales won’t generate as much interest as those which are sold by a real estate agent.
There’s no way to tell which buyers are seriously interested in buying property and which are simply browsing. Either way, you’ll have to show the house to anyone who’s interested, which can be a real waste of time. If you don’t know your local market and target demographic, you may focus on aspects of your property that you love but which the buyer finds irrelevant. On the other hand, you could also neglect to mention details that would result in a sale. It’s the real estate agent’s job to stay on top of these details and land a sale. It’s hard for property owners to dissociate themselves from their homes. They run the risk of becoming defensive if potential buyers have anything negative to say about the property. Lastly, it may sound alarmist, but there are also security issues to consider, because some buyers may actually be interested in casing your house for a robbery later on.
Administration and the Sale of your Home
A real estate agent’s can come in handy during negotiations, which involve a lot more than simply haggling about the sale price. Selling a property is a legal transaction that involves a mountain of complex paperwork. If you decide to sell your own home, you’ll need to be able to negotiate your own legal terms. Most of us don’t, have this experience and need to hire either a conveyancer or a solicitor, or both. The buyer will make their own proposals related to their financial or time-related requirements. If an offer comes in with all of these conditions attached to it, it can be difficult for you to tell if this is truly an attractive one.
If you choose to sell your house privately, you’ll need to find a lawyer and coordinate the lawyer to meet up with the buyer’s lawyer. You’ll also need to find another professional to write up the contract of sale for you and ensure that the buyer’s deposit cheque goes into the right escrow account.
If you think that your house could sell for more at auction, then you’ll also need to organise that event. Real estate agents are property auctioneers, but it is possible to hire them for just that event without the rest of the profit. You can check with the agent how much they want for each step of the process and hire them separately if that suits you.
You’ve most likely worked hard to build up equity in your home, and it makes sense that you’d like to avoid paying commission to a real estate agent so that you don’t lose any of this hard-earned money. Yet the reality of selling a house is often much more complex than sellers realise at first glance. A professional real estate agent will have the experience and expertise needed to help make the most of your property. They earn their commission with a lot of hard work. You are paying a lot of money for the service, but it’s important to really analyse how much more profit an agent will make you above doing it yourself. It’s a good idea to learn more about the different types of agents, including franchise and independent agents.