The global financial crisis is putting pressure on everyone to watch their finances like never before. Property sellers are not exempt and so it’s not surprising the some sellers consider selling their home privately.
Any property owner is free to sell their home through a private sale as they always have.  There seems to be an endless supply of websites that pop up promising to save you thousands of dollars in commission if you list your home with them, but is it really that simple?
When buyers or sellers are surveyed about the reasons why they would attempt to buy or sell a home without the assistance of a Real Estate Agent, their answers are always the same; “to save the commission.” Regardless of the prevailing market conditions or sales trends the response remains the same but this decision can be wrought with pitfalls.
A real estate agent provides a professional service far more detailed and advanced that a private seller can undertake. But it is really a case of can a private seller provide an acceptable level of service to themselves?
When you engage the services of a professional painter to paint your whole house you know you are going to get an exceptional job but an alternative to consider is painting the house yourself. For many there is no decision because they have never painted a room before, let alone a whole house. For those few with some experience they understand the result will probably be inferior to that of a professional, but the investment in time weighted of against saving some dollars may make the exercise worthwhile.Â
But when you are selling your home the savings are not always quite what they seem and there is still another issue when selling your home privately to explain.
There is only one commission to be saved, and two different entities seeking the same savings.
The fact is, the commission is a provision of the agency relationship established between the seller and their agent at the time a listing agreement is signed. Since the seller traditionally is the one who actually pays the agent, it would seem that he would be the one to “save” the commission. But this is not the case in the buyer’s eyes.
If a seller is not utilising an agent buyers often assume there’s money to be saved by them! Â Frequently private buyers will look to deduct what they know would be the commission amount, right off the top of your asking price! Â
So after all the effort and investment in marketing and advertising, in order to try to save some money for themselves, buyers ask the private seller to take less!
For buyers, unless there is money to be saved by them, there is absolutely NO reason to buy from a private sale. In fact for many buyers the concept of dealing direct with the seller is quite foreign. They generally do not pay the real estate agent’s fee, and they can have a professional show them the best properties for sale in accordance with their wants, needs, and price range, anywhere they want to look. They don’t have to use their own petrol, they don’t have to spend hours looking at homes they can’t afford or would never buy. They don’t have to waste time searching through maps trying to find streets in an unknown suburb.
So, why would they buy from a private seller or FSBO (For Sale By Owner)? Only to save money of course!
Think about it, with a Real Estate Agent they have nothing to lose. With a private seller or FSBO – they must have something to gain or it’s just not worthwhile!
With both parties motivated primarily by the money they are going to save, some serious problems can arise. During negotiation, it can become very stressful as the seller thinks they will get more, and the buyer thinks he will pay less. The end result is often that neither party ends up satisfied which is why the vast majority of homes trying to sell privately end up employing the services of a real estate agent to achieve the sale at the end of the day.
Next time you hear of somebody justifying their decision to sell privately by claiming they “Saved $10,000″ by selling their home themselves, ask yourself what could a professional agent have sold the home for. If the answer is for $10,000 more the owner invested all that time, effort and heartache for absolutely no saving at all. If an agent could have got $20,000 more they did the work themselves and still managed to lose money in the process.
The truth is a professional real estate agent is skilled at getting you the best offer and handling all of the details on your behalf – now that’s where you really save. You have a life and real estate agents let you live it. Real estate is our life. Let us handle all of the details, professionally!
Other Related posts:
- First Home Buyers Celebrate 2008 will be remembered for a lot of things but one of them was the...
- Local Property Market Starts 2009 With A Bang! The question on top of many home owners minds right now is how how the...
Tagged: fsbo, private sale, real estate
