Private Sales Are Losing You Money
4 traps of the home-sell movement
Private sales are a false economy, and Northlanders are bearing the brunt of this online trend.
It seems the lure of zero commission private sales is causing many Northlanders to bypass real estate agencies in favour of Trademe sales and roadside advertising. It’s easy to understand the attraction – after all, it’s a simple enough process when everything goes right, and cutting out the middleman may seem to allow for a higher sale price from the vendor’s point of view. So where’s the catch?
There are a number of honest-to-goodness traps in the private sale game, and many of them could end up haunting you for a lot longer than a 4% commission! Let’s take a look at the top 4 ways private sales are losing you money.
Private sales: sharp buyers!
Make no mistake, when you sell privately, you attract some very sharp customers indeed. Now, we’re not trying to say that every person who comes through your private open homes is after the bargain of the century – but it’s a little like bargain hunters at a garage sale. Often your buyers will have done their homework, will know the true value of your home, and will bank on you not having done as much research as they have. Also, they may have more of a feel for the market, having visited a number of open homes before yours.
Getting an offer straight off the bat therefore might be more of a warning sign than a reason to celebrate!
A seller’s market could leave you homeless
So you’ve accepted an offer. You’re very happy – this offer is well above what you bought the property for, and you feel that it’s a great price for the house. The sale goes through, you sign the paperwork, you finish that bottle of champers – and then you start looking at places to buy. Uh oh; this is where things can go pear-shaped! It turns out that the reason why your house sold so quickly is that you’ve just sold in a seller’s market, and this is going to leave you dead in the water when it comes to buying another property of the same or greater quality. This is a pitfall of private sales.
One word: Insurance
While everything may be going perfectly at the time of your sale, there’s every possibility that the new owners will discover something they were unaware of, are unhappy with, or that simply changes their feelings about the whole deal. This is real life stuff right now: those happy, friendly purchasers can become your worst nightmares literally overnight. What protection do you have if they come to you with a complaint? Do you know your legal rights and responsibilities?
You’ll find that when things go wrong, a real estate agent will be able to buffer any repercussions with their professional indemnity and liability insurance, containing any collateral damage and protecting you from any lawsuits or claims an unhappy purchaser may come up with.
Play the market, baby
Your real estate agent knows how to get the best price, period. It’s a skill, something they do for a living, and (let’s be honest) it’s in their best interests! There are things only a real estate agent will think about: for instance, having your house on the market for too long is a negative. Most of us know that.
But did you realise that it’s not until about the 6-week mark that buyers start to really sit up and take notice? It’s at this point that many real estate agents begin to receive multiple offers, and they’re then able to start negotiations with multiple buyers. Now doesn’t that sound more attractive than jumping at the first hint of interest?
So what’s the verdict? A professional real estate agent knows the market, knows your buyer, and knows how to close a deal. They’ll also protect your interests in the event of any nasty post-sale conflicts, and they’ll handle all of the legal paperwork pertaining to the sale. Sounds pretty good right? So take another look at that 4% and decide whether your private sale really is a safe bet: and whatever you do, don’t sell to the first person who shows interest!
For more information on how we can save you money, contact the team at goodGround Real Estate: professionals who care.