Selling property privately - clever or crazy?

Jazz said :

snoopydoc said :

We sold our house in QLD in 2004 when we moved back to Canberra. We did it privately, rather than pay a real estate agent a very large sum for doing very little.

– Retained a solicitor for conveyancing $1,200
– Custom sign for the front yard $55
– Star pickets, etc., for abovementioned sign $20
– Listings on two different websites, with lots of photos we took ourselves $110
– Few page info pack I put together myself $[printer paper and an hour or so of time]

We ended up selling it within 3 weeks, costing around $1,400 all up and avoiding coughing up something like $14,000 to a real estate agent.

Its a little bit naive to think that an agent does nothing else and there are no other cost. Is your own time worth so little? not only are you having open homes, private viewings at times convenient to the buyer, make potentially hundreds of phonecalls, AND have access to a database of pre-qualified buyers.

worth it? i think so.

‘Hundreds of phone calls’? Really? Hundreds?

‘a database of pre-qualified buyers’? Do you mean when you give them specs of a place you are looking to buy and they ring to sell you houses that are completely different? i.e. every house they have on their books is *your* dream house…

‘Is your own time worth so little?’ Well, if they saved $12,600 I’d hardly say that is ‘little’, but perhaps that is to highly paid agents! I mean, if the homeowner worked a 40 hour week solely on selling their house – for each of the 3 weeks it took to sell – it works out that they ‘earned’ $105 an hour by doing it themselves. Personally, that sounds like good money to put towards a holiday, or perhaps some renos on the new place! Or at least cancelling out some of the BS stamp duty related to the new place….
Basically, if people are confident and competent enough to DIY, why try to talk them out of it? There don’t appear to be too many horror stories here (yet!)?

Jazz said :

Its a little bit naive to think that an agent does nothing else and there are no other cost. Is your own time worth so little?
not only are you having open homes,

Which are frequently manned by the office trainee

Jazz said :

private viewings at times convenient to the buyer,

I have to pay for that!?! Usually I have found that the agent’s convenience comes first, the buyers second, and stuff the seller.

Jazz said :

make potentially hundreds of phonecalls, AND have access to a database of pre-qualified buyers.

Who to? I have yet to find an agent who has more than two potential buyers and they certainly weren’t qualified. The standard modus operandi of real estate agents in Canberra is to list on All Homes and wait for the phone to ring.

Jazz said :

worth it? i think so.

Hey, its your money.

Jazz said :

What you’re paying for with a solicitor is the ability to sue them if something goes wrong.

Wrong. You don’t need a solicitor to create an enforcable legal contract. If something does go wrong, all a solicitor will do is refer you to a lawyer mate. Solicitors don’t even do the convenancing, they get the clerks to do it.

Reading this, you seem like too nice a person to sell your own house. I have an awful feeling that your real name is quite close to the one you are using here? So, if I were a canny buyer, I would be looking for a privately sold house, with a vendor with a name like the name used here, and remembering what you said about being willing to take a lower price.

Get an agent, on a percentage. They don’t, in general, tend to be nice.

RedDogInCan said :

shauno said :

Not only that you have about $900 in building inspection and maybe a grand in lawyer fees for a bill of sale

Building inspection fees are refundable by the buyer.

If you are paying a grand in lawyer fees for them to hand you the standard Law Society property contract you are getting ripped off. You can purchase a copy from the Law Society office for $28.

Even then you get ripped off. By law you need to have a contract prepared before putting a property up for sale. However, solictors call this a ‘marketing contract’ and a charge extra to draw up the ‘real’ contract and then insist that there is a buyers copy and sellers copy.

You really don’t need a solicitor if you are selling. We sold this year using the standard Law Society contract without a solicitor. There is plenty of information available about how to go about it on the ACT Govt web site.

What you’re paying for with a solicitor is the ability to sue them if something goes wrong.

snoopydoc said :

We sold our house in QLD in 2004 when we moved back to Canberra. We did it privately, rather than pay a real estate agent a very large sum for doing very little.

– Retained a solicitor for conveyancing $1,200
– Custom sign for the front yard $55
– Star pickets, etc., for abovementioned sign $20
– Listings on two different websites, with lots of photos we took ourselves $110
– Few page info pack I put together myself $[printer paper and an hour or so of time]

We ended up selling it within 3 weeks, costing around $1,400 all up and avoiding coughing up something like $14,000 to a real estate agent.

Its a little bit naive to think that an agent does nothing else and there are no other cost. Is your own time worth so little? not only are you having open homes, private viewings at times convenient to the buyer, make potentially hundreds of phonecalls, AND have access to a database of pre-qualified buyers.

worth it? i think so.

I think it depends on what your selling. My wife and I have sold 3 houses now all privately. 2 were in the first home buyers market and sold easierly. Sure enough it took a while for one of them but we got over what we wanted.

If your selling a second house thats over the $450k mark its a little harder to sell. I would definetly sell myself again.

Sorry about the spelling. If you want any more advise I am more than happy to talk via email.

shauno said :

Not only that you have about $900 in building inspection and maybe a grand in lawyer fees for a bill of sale

Building inspection fees are refundable by the buyer.

If you are paying a grand in lawyer fees for them to hand you the standard Law Society property contract you are getting ripped off. You can purchase a copy from the Law Society office for $28.

Even then you get ripped off. By law you need to have a contract prepared before putting a property up for sale. However, solictors call this a ‘marketing contract’ and a charge extra to draw up the ‘real’ contract and then insist that there is a buyers copy and sellers copy.

You really don’t need a solicitor if you are selling. We sold this year using the standard Law Society contract without a solicitor. There is plenty of information available about how to go about it on the ACT Govt web site.

No – we didn’t provide the valuation to buyers – it just re-inforced what we thought our place was worth.

We were lucky as our bank needed the valuation to work out how much equity we had when considering the next loan. As such they organised it but I believe the guys were from Knight Frank. I also know that Egan Property Valuers do a good job.

Email me – sellprivatecanberra at gmail dot com

2604 said :

Carolyn_G said :

2604 – congrats on selling so fast. Just wondering if you found that people expected a discount due to a private sale?

Not at all, and if they had asked for one, I would have pointed out that I had done all the work that an agent would normally do, so the price should remain the same.

I also don’t think you should assume that an agent will automatically increase the price you can get for a house by $10,000. The fact is that many of them aren’t particularly smart, nor good negotiators. They also put buyers off – in fact, a couple of people who looked at my apartment told me how nice it was not having to deal with an agent, for once.

Good to hear. I totally agree with your comment there, especially as our house is entry level. In my eyes $10,000 is a big difference in price when you are talking low $400,000s. For an agent to be worthwhile they would have to be able to talk someone up at least $10,000. Could they do it? Maybe… But maybe not. As you say, I’m sure some are great at negotiating but a lot are probably no better than you or me.

Having done all this research (and finding a wonderful and supportive solicitor today) I’m now pretty keen to give it a go. Worst case is a few months go by with nothing happening and we can then decide to take it off the market or talk to an agent. We might lose a bit of money on the allhomes ad but I think it’s worth the gamble.

If we do go ahead I’ll be sure to post to let people know about my experiences.

With the internet it’s easy to get the enquiry yourself and save the money. I think an agent is only worth their fee if they can negotiate a higher price than you. That’s the dilemma. Most property sales seem to bargain over tens of thousands of dollars, much more than the typical fee but will the agent do any better than you? When we sold we interviewed several agents and visited some opens to test their skills. Most, in our opinion, weren’t really looking after the sellers interest. We did find one in the end who impressed us and I believe more than made up for his fee in the negotiation. He even gave us an option to reduce his fee if we weren’t happy with the result! Some guarantee I thought.

AG Canberra said :

I wrote the post last year on selling privately.

Sell it for what it is worth (and it is only worth what someone out there is prepared to pay). A professional valuer (as opposed to a valuation from an agent) is worth the 300 bucks. And then do your own research – AllHomes is a excellent resource to see what comparable houses in your area have gone for in the last three months.

Be realistic confident, be honest and be open.

We found that the people who had been looking for a while were more than happy to do ‘by appointment’ inspections soon after the listing (and we got offers at this point). A couple of weeks in, we then did two open houses to flush out other (maybe less confident?) buyers.

If I can work out a way to get my phone number to you (not publicly) I’m happy to have a chat.

Thanks for writing. I loved your post about your experience, gave me the confidence to look into it further. I am trying to think of a clever way to swap contact information… have not come up with the answer as yet. In the mean time, I’m wondering if you made your property valuation available to potential buyers? Also who did you use?

And just a general comment, maybe I am very naive but I think if I am realistic about the price, honest and open with people then I should be ok. I should also mention that we are in a lucky position that we have no deadline to sell by and we can stay with family while we look for the new place. This means we won’t have any clocks ticking loudly in our ear or bridging finance piling up each day.

I wrote the post last year on selling privately.

Sell it for what it is worth (and it is only worth what someone out there is prepared to pay). A professional valuer (as opposed to a valuation from an agent) is worth the 300 bucks. And then do your own research – AllHomes is a excellent resource to see what comparable houses in your area have gone for in the last three months.

Be realistic confident, be honest and be open.

We found that the people who had been looking for a while were more than happy to do ‘by appointment’ inspections soon after the listing (and we got offers at this point). A couple of weeks in, we then did two open houses to flush out other (maybe less confident?) buyers.

If I can work out a way to get my phone number to you (not publicly) I’m happy to have a chat.

hmmm, having been looking at purchasing a property for the last 12 months, I find private sellers difficult to deal with.

The reasons I find them difficult are:
– they ALWAYS think that their emotional attachment to the house means its worth closer to their non professional opinion
– if you pass on the house, they take it personally
– they often have NO idea when it comes to any legislation around the real estate game

If you engage a real estate agent, you just have to get the house ready – they do everything else. The idea of having to manage a sale PLUS a family PLUS fulltime work means I’d rather spend the cash and then worry about the issues I had later, when I’d sold the house..

If you were to sell the house privately, would you reduce the price by the amount you’ pay the real estate agent?

Carolyn_G said :

For a private sale I have budgeted
$100 signage and brochures (vistaprint do large lawn signs for $25)
$1500 all homes ad
$1500 solicitor
Building/pest/energy reports $1000

Forgetting anything?

Just keep in mind when you’re looking at those costs, that with a real estate agent you’d still be paying for a solicitor, and the costs of building reports etc are ultimately picked up by the buyer. So they’re not going to change whether you go privately or through an agent.

as a buyer if i were to make an offer on a privately sold home, i would offer less than if it were through an agent. just like buying used cars.

probably works out more or less the same either way for the seller as far as profit is concerned

The person selling can be the big factor as to whether a house sells privately or not. If you learn anything from real estate shows, its the home owner that oftenb over values their own property.

Do you have a friend who can cat as the “real estate agent” and do all the talking and negotiating?
That may help with the emotional aspects. If it sells quickly a private sale is the way to go, otherwise IMO an agent is the way to go. Of course you need a crystal ball or hindsight to know this in advance 🙂

Very Busy said :

There are a few factors that should determine which way you should go.

1. Is your home an appealing home that will sell itself?
2. Are you sure that you know what its value is and that you won’t be underselling it or overpricing it?
3. Will you be available to show the home to potential buyers at a time that suits them? (For security reasons you should avoid the open house technique. Genuine buyers WILL look at private sales from Allhomes and make an appointment to view whereas sticky beakers will go to open homes.)
4. Do you have some basic negotiation techniques and experience?

If you can come up with YES to these questions you should definitely go privately and avoid an agent. You should do some ground work first including having a solicitor organised and draft contracts prepared. Good photographs are very important as is the wording in your ad. There may be a little additional work for your solicitor but the cost of this will be nowhere near what you’re saving on agents fees.

Also be a bit weary of responses you get here on Riotact because it is likely that some of the responses will be from real estate agents!!!!

Thanks for this very useful post, and I had wondered the same thing about who might be writing some posts! I am meeting with a few agents so I think once I have had a few valuations I’ll be confident with our asking price. The first valuation was pretty much what I was thinking so that was good to hear. Im not worried about getting top dollar, just a fair price that will allow us to move on.

I am not working at the moment so would have time to take calls etc. I have already decided though that I would not have people through without my husband home just for safety reasons. That would mean we could do private viewings any day after 4.30pm or anytime on the weekend. I would hope that would provide people with suitable options.

For a private sale I have budgeted
$100 signage and brochures (vistaprint do large lawn signs for $25)
$1500 all homes ad
$1500 solicitor
Building/pest/energy reports $1000

Forgetting anything?

Carolyn_G said :

2604 – congrats on selling so fast. Just wondering if you found that people expected a discount due to a private sale?

Not at all, and if they had asked for one, I would have pointed out that I had done all the work that an agent would normally do, so the price should remain the same.

I also don’t think you should assume that an agent will automatically increase the price you can get for a house by $10,000. The fact is that many of them aren’t particularly smart, nor good negotiators. They also put buyers off – in fact, a couple of people who looked at my apartment told me how nice it was not having to deal with an agent, for once.

Not only that you have about $900 in building inspection and maybe a grand in lawyer fees for a bill of sale

http://the-riotact.com/selling-privately-a-recent-experience

http://the-riotact.com/real-estate-commissions

http://the-riotact.com/a-canberra-real-estate-question

We sold our house in QLD in 2004 when we moved back to Canberra. We did it privately, rather than pay a real estate agent a very large sum for doing very little.

– Retained a solicitor for conveyancing $1,200
– Custom sign for the front yard $55
– Star pickets, etc., for abovementioned sign $20
– Listings on two different websites, with lots of photos we took ourselves $110
– Few page info pack I put together myself $[printer paper and an hour or so of time]

We ended up selling it within 3 weeks, costing around $1,400 all up and avoiding coughing up something like $14,000 to a real estate agent.

Just thinking about your comment Sandman… If I go private sale I could discount the price a few thousand and I’d still be in front. Better deal for me and for the lucky buyer! I feel I’d be happier giving a buyer a few thousand off and keeping a few extra thousand for myself rather than pay an agent.

We have a figure in mind that we want to walk away with. Obviously if an agent sells it the sale price needs to be about $10,000 higher than if we do it ourselves. I guess a good agent could make that happen.

2604 – congrats on selling so fast. Just wondering if you found that people expected a discount due to a private sale?

We are meeting another agent this week… I’ll see if I’m convinced after that meeting.

There are a few factors that should determine which way you should go.

1. Is your home an appealing home that will sell itself?
2. Are you sure that you know what its value is and that you won’t be underselling it or overpricing it?
3. Will you be available to show the home to potential buyers at a time that suits them? (For security reasons you should avoid the open house technique. Genuine buyers WILL look at private sales from Allhomes and make an appointment to view whereas sticky beakers will go to open homes.)
4. Do you have some basic negotiation techniques and experience?

If you can come up with YES to these questions you should definitely go privately and avoid an agent. You should do some ground work first including having a solicitor organised and draft contracts prepared. Good photographs are very important as is the wording in your ad. There may be a little additional work for your solicitor but the cost of this will be nowhere near what you’re saving on agents fees.

Also be a bit weary of responses you get here on Riotact because it is likely that some of the responses will be from real estate agents!!!!

we are in the same boat and are very interested in what is recommended. We are strongly leaning towards doing it ourselves. In a place like canberra, where everyone goes to allhomes anyway, it just seems logical to do it ourselves.

I have had friends do it with no dramas, it doesnt seem too hard.

kakosi said :

I suggest if you’re going to hire an agent go out and look at how they are selling other homes first.

Turn up, open door, wait for offer.

We had a crack at selling a rural property privately. Eventually listed it with an agent and it was sold in no time for the price we wanted.

A lot of people will stay away from a privately listed property and the people who do show interest will think you should give it to them cheaper because you don’t have commissions to pay.

Just negotiate a better deal with an agent and let them deal with the hassles. What’s a measly 10g when it comes to a half million dollar property?

DIY all the way. I did, three years ago and sold within three days. Saved about $15,000 for about ten hours of my time, all up. You sound like you’ve already done most of the work and having good photos will help a lot.

Have an open house – maybe an hour on Saturday morning and an hour on Sunday morning, to ensure that everyone can attend. Make sure you take down the names of all visitors and call them later that day to see if they want a copy of the contract for sale, which you can email through.

As for legals, you should use Bradley Allen, their conveyancing staff are great.

We sold successfully last year through an agent.
We interviewed two agents and went with the agency using the Jenman system,
In Canberra this is the Real Estate shop. http://realestateshop.com.au/home/

I was very reluctant to pay the $2000 for marketing the other agency wanted (up front if I remember correctly). Real Estate shop will only even go to All Homes if their contacts system fails to find buyers within a short time period.

They took a lot of the pain and stress away, which is partly what you pay for. They also negoitated our buyer up quite a bit from her first offer, but know when she was at her limit and might walk. Again skills you pay for with a good agent.

If you decide to go through an agent definitely talk to Real Estate Shop.

Depends on how much time you have to do the viewings yourself. As long as you have a good solicitor you should be ok.

I suggest if you’re going to hire an agent go out and look at how they are selling other homes first.

I always said we would go private when we sold but last year we sold our first property last year we used an agent. Very pleased we did. It is already a stressful and emotional thing best left to a professional.

Maybe we would have gotten the same amount, maybe not.

I think you will find that when people make an offer they will take into consideration you aren’t paying an agent.

I would suggest go with an agent. If you do go for open homes try a twilight opening during the week.