A recent major study conducted by the Real Estate Institute of New Zealand showed that on average real estate agents secured a selling price 15% over and above those selling their house privately. We are talking major dollars here. Therefore, this debunks the theory that selling privately will in fact save the seller money by not having to pay a real estate commission. The truth of the matter is that invariably the seller will in fact lose money when selling privately. We’ve seen this happen too many times. This study confirmed what I have experienced in my 37 + years in real estate. Selling privately is simply not a good idea for a number of reasons.
Here are 6 reasons why private selling is not a good idea:
- It is likely to cost the seller money, not save money as many may think. An experienced agent will know what the market value of the home should be and will set the best selling price range for their sellers.
- Major property marketing channels that ensure high-quality leads from potential buyers are generally only available to real estate agents. In today’s market, this invariably leads to multiple offers which would be extremely difficult to handle if you were selling privately.
- The real estate agent is a third party and in a unique position to negotiate the very best price for the seller. In most cases, the seller is not in a strong negotiating position through a lack of experience in this area.
- Often private sellers are approached directly by someone they know and this often means the seller settles for a much lower price than what the market would have offered on average. This significantly minimises the potential for the best possible offer.
- Selling privately will not necessarily offer less hassle. Experienced Real Estate Agents, like the team at Watson Real Estate, put a home under contract within 9 days on average.
- It is not unusual for buyers to expect a bargain or at least a reduced selling price as the seller does not have to pay a real estate commission.
Let’s do the maths. Let’s look at a case study
Although the numbers used above are very conservative, you can see that using a professional property consultant, is simply better.