Can anyone tell me why more people aren`t selling real estate privately?
I mean in a boom situation who needs real estate agents when houses are selling themselves.
We bought our house the minute it came on the market, the owners would be paying agents thousands of dollars for very little work.
I understand some people are busy and own lots of property therefore don`t have time but for new investors why not save thousands of dollars in fees to real estate agents and sell your house yourself?
I would think it`s relevant to the subject of positive cash flow if you can save money to use for new investments.
I know a person who is selling an oceanfront property for $1.2 million, so agent`s fees would be at leat $30,000?Your thoughts?
HI Powderfingers,
Good question however I know of a couple of private sales that have just sat on the market for some weeks when properties in that area are being sold within 20minutes of listing with an agent. One in particular I think is way over priced but what it does do is help slow the market a little and every bit helps if you ask me. Roll on rate increases. I can’t wait to start picking up the bargains that every one is panic buying at the moment.
If you are selling privately you have to do it properly. don;’t just stick a sign in the front yard and expect people to beat a path to your front door. Advertising is a must, flyers etc.
Agents earn their commissions for expertise in the field. (ex agent speaking) I like to pay people what they are worth. There is no substitute for good advice.
Cheers
A bad agent actually costs the seller money, there are many bad agents keen to rack up a commission at any cost. You describe a few in your article (house sold in a day=sold for too little)
A quality agent is worth double their commision because a quality agent should appear to be an impartial, expert negotiator on the sellers behalf. On a million dollar property, a good agent should be worth up to $200 000. Recently, in my case, the good agent was worth about 25 000 on a 160 000 sale.
The key is to find a quality agent
Yes you both made good points Kaydee and Harold.
I agree with you Kaydee, there will eventually be some bargains to be found, from the over spending going on.
Harold, you`re exactly right, our house was cheap so the agent obviously convinced the vendor to sell at that price for an easy commission.I have heard that 50% of houses sold in Europe are private sales. Some cities have a high proportion of auctions. It’s a mentality thing.
I have done a few developments and the reason I decided to stick with an agent (even had my own signs made etc) was that the previous year only 36% of his sales came from ads. The rest were from people looking at other listings and other agents. I would have to be VERY sure of a sale to cut out 2/3 of my purchasers. Of course, the market is different now, and I wouldn’t dream of using an agent first up on my own home, as nothing ever lasts 2 weeks in our suburb, and there’s never more that 6 listed.
BTW, the agent sold one the first week and the other the second week, and that wasn’t when the market was very hot.
If you use an agant, try to find a really good agent you can continue to work with. There are so many who, even if they try, are a waste of time and money.
Hi Everyone,
I am actually in Real estate Not residential but commercial (Hotels to be specific) I was reading your discussion on private sales, as with any professional body their are your fraud’s (you know talk heaps act little) these are the type of people that give agents a bad name. A good not average, but GOOD agent is worth every cent they earn. I NSW the sources or Real Estate buyers goes somthing like this:
Personal Referral 33%
Company Image 25%
Sign 15%
Office Personnel Initiative 10%
Newspaper Ads 9%
Open House 5%
Walk Ins 3%so by cutting out agents your losing 68% of your potential purchasers!!!!
THere is an easy way to sell your house privately, it is called FSBO.. Have a look at http://www.fsbo.com.au (I think)
For a fixed price they give you the means to sell your house, including signage and flyers, but then the rest is up to you. It is something I would consider after reading about it on the website.
I remember seeing something about it on a current affair or today tonight a couple of years ago. Anyway, looks interesting.
STeph.Here for a good time not a long time, just do it!.
I have worked as a developer for many years and would always happily give a listing to an agent.
Firstly the agent knows the market (or should do so).
Secondly, how would a householder know what the value is (unless one puts in a lot of time looking at houses.
Thirdly etc., if time is of the essence the agent has already a lot of people on his books looking for property, he knows how to promote the property properly, he is a very necessary buffer (and negotiator) between yourself and any prospective buyer (that alone is worth the money).
I presume that anyone who thinks he can do the task himself is also baking his own bread, repairing his own shoes, servicing his car himself etc etc.
Yes there are some bad eggs and it is up to you to get a number of opinions from several agents.
The one who says he can sell the property for a lot higher price than most of the other agents is most likely a b/s artist and a liar.
Go with the one your gut feeling tells you is the right one.
Do not however lock yourself in for a long time, always insist on a (written) assurance that the property will be continuously advertised and that there will be a regular open house and (try to) negotiate the commission rate.
There is a lot of competition out there – then again, the lowest commission rate is not necessarily the best agent either.
If you want to have more assurance spend a couple of hundred dollars on a valuation.
Pisces133
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