Selling your home can be an expensive affair, with marketing costs, advertising campaigns and agent commissions chewing through your profits. What if you could cut out the middleman, then, and save yourself thousands of dollars?
According to property and finance expert Peter Boehm, a leading Yahoo!7 Finance
columnist, it is possible to successfully market and sell your home without engaging a professional real estate agent – but he’s quick to point out that there are pros and cons you need to carefully consider first.
Pros of DIY selling
Technology has levelled the playing field somewhat, as it’s now possible to use online resources to market your property yourself.
“It’s no longer necessary to spend thousands of dollars on newspaper advertising, glossary brochures and magazine inserts – or maintain shop fronts like estate agent offices – to market a property, since this can be done relatively cheaply and with greater reach [online],” Boehm says.
For sale by owner (FSBO) websites are becoming increasingly popular here and abroad, as they cut the real estate agent out of the negotiation and allow buyers and sellers to connect directly. These types of websites are based on the premise that property is bought, not sold.
“If we look at what's happening in places like the US, Canada, Italy, Germany and Israel, between 25% and 50% of all property sold is done directly by sellers through do-it-yourself or FSBO websites,” Boehm says.
Typically, real estate agent charge commissions ranging between 2% and 3%, with a further spend required for marketing and advertising.
“The cost of listing on an FSBO site is significantly less, ranging from zero (for free listings) to around $900, depending on the level of sales and marketing support you need,” Boehm says.
“Clearly, sellers who sell themselves are going to save tens of thousands of dollars in sales and marketing costs and could, as a consequence, be more willing to negotiate on price – meaning there may be a knock-on financial benefit for buyers as well as sellers.”
Cons of DIY selling
There is much more involved in selling a property yourself than simply listing it online, Boehm cautions, so vendors need to be careful that they’re not biting off more than they can chew.
“For starters, you're going to have to be more involved and spend more time managing the day-to-day sales process,” he says. This means making yourself available for regular inspections, responding promptly to phone calls and emails and generally managing the sale campaign.
Also, major property sales websites such as www.realestate.com.au account for “around 90% of all property searches”, Boehm says, and as a DIY seller, you’ll miss out on using this resource. Realestate.com.au will only accept listings from registered real estate agents, so unless you know someone in the game, it’s impossible to list your own home for sale on the site.
“There are other important considerations to think about – things that you may be worried about doing yourself, or that require independent expert support and guidance on,” Boehm adds.
- Pre- and post-sale legal advice
“You need to make sure all of the necessary legal documents are complete and accurate, and that your legal and financial interests are protected – this is where your lawyer or conveyancer comes in,” Boehm says.
- Pre-sale marketing advice
Your property needs to be marketed in the best possible way, and without an agent’s involvement, it will be up to you to organise the property's presentation, quality photographs, sale boards, brochures and copy writing.
- Sales negotiations
“You'll have to negotiate with buyers and complete the necessary sales documents or appoint someone to act on your behalf,” Boehm says. If negotiating isn’t your strong suit, consider asking a friend or relative with this skill set to step in on your behalf.
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