Monica from Bellville asks:
We bought our current home in Bellville shortly after getting married, but I have been transferred to Durban. Some of our friends have suggested we sell privately, to save a fortune in agent's commission. I've heard I can save R80 000 or more on the sale of our home.
Is that true? Do real estste agents really charge that much for selling a house? Why would anyone use an agent?!
Dear Monica,
You ask some good questions. Questions few people ever come out and actually ask:
Can private sellers really save R80 000 or more?
The popular answer is YES. If you don't have a real estate agent involved in the sale of your home, you obviously don't have to pay an agency commission. And the commission is very often much higher than R80k.
The less popular answer is MAYBE. You might end up selling the property to a buyer who has chosen to get agency representation for himself. If this happens, the buyer's real estate agency commission will be paid from the purchase price. The purchase price might be adjusted upward to allow for the agent's commission, but unless you are an expert negotiator, it probably won't be.
The realistic answer is NO. Buyers who negotiate with the owner of a property directly are very well aware that the owners have chosen not to appoint a real estate agent. Suddenly they will also set their sights on the "savings" you had hoped to secure for yourself. You will most probably not be able to hold onto your private sale commission "saving".
This is why it is critically important that you learn how to handle a private sale correctly long before actually putting your house up for sale.
Do real estate agents really charge a fortune for their services?
The answer to this question will depend on the agent and you. There is no such thing as a
a fixed commission. Real estate agency commissions are negotiated between the agent and the client. So, you only pay your real estate agent as much as you agree to pay.
You ultimitely decide if you want to pay a lot, or a little, for your agent's services. But the trick is actually negotiating the commission you feel comfortable with. And frankly, if you cannot negotiate a good commission agreement with your real estate agent, you have to wonder how you will fare negotiating a good price for your home.
Do agents really charge so much for selling a house?
Not really, if you take the time to look behind the curtains:
How will you determine if your asking price is right? Will you have to get a professional valuer to determine the market value of your home?
Will you be able to find enough serious buyers quickly? What is your marketing plan? Real estate agents usually have buyers who they have been working with for a while. That is why they can sometimes sell a home in a very short time. Are you ready to wait for your property to sell?
Advertising is expensive. How much were you planning to spend advertising your home? Will you be able to advertise it effectively?
Are you comfortable with asking very personal questions to perfect strangers? Who will qualify your prospective buyers to determine if you should take them seriously?
Are you comfortable allowing perfect strangers to roam your house at all hours?
Will you be able to show your house well? Do you know the finer tricks to make your house more attractive to buyers? Do you know when to speak up and when to shut up?
How much is your time worth? And how long do you expect the property to sit on the market before the actual sale?
Can you spare the time? Or will you have to fit the sale of your house into your busy schedule? Can you afford the risk of making prospective buyers wait untill you can fit them in?
Will you be able to handle the legal aspects yourself, or will you need an attorney to assist you in handling the paperwork? Legal advice usually cost money.
How is your negotiation skills? Do you know how to give the buyers what they want AND get what you want? Can you detatch yourself from your emotions to negotiate effectively? Do you know when to speak and when not? Or will you tip your hand when it matters most, giving the buyers an edge?
Why would anyone use a real estate agent?
Real estate agency is a valuable service, including many different disciplines, which you might have difficulty fulfilling properly all on your own. So if you have the time, the patience and the interest in selling your own home, make sure you do a lot of homework to ensure you get the best price in the best possible time frame.
Still so keen on selling your home privately? Does this explain why people choose to use real estate agents?
Private Sale - Why not?
From what you told me, it seems as if you are a little pressed for time...
