Um… to save money?
Yep, it’s the easy answer to that question. In fact, it’s often the only answer. It’s based on the assumption that property in Australia sells itself, a theory that’s frequently perpetuated by services, such as For Sale By Owner, BuyMyPlace, No Agent Property, and the like, which each promise savings of up to $10,000 and a quick and easy sale if you sell your property privately.
But property doesn’t sell itself and often buyers are reluctant to participate with a vendor in a conversation that they would more than happily have with a real estate agent; conversations that frequently result in the successful sale of the property.
Properties that sell prior to auction, for example, only do so because the agent successfully negotiated the sale with buyers that he or she gauged, based on their feedback following an inspection, were interested enough to make a pre-auction offer to the vendor. Pre-auction sales only occur for two reasons:
- The first is that eager buyers are willing to pay a substantial amount more for the property, just to take it off the market before auction;
- The second is the lingering deadline of auction day itself, which creates a sense of urgency among buyers that cannot be recreated with a private treaty sale that has no deadline.
How quickly do you want to sell?
This brings us to a discussion about how quickly you’d like to sell your home. The average property in Sydney spends 30 days on the market, although many homes around the inner city, lower north shore, and northern beaches spend between 12-21 days on the market, according to RP Data figures. That’s if they’ve been listed with a real estate agent.
Most homes sold privately are advertised for 60-90 days, but it’s unclear what percentage of those homes are no longer advertised because a buyer was found, or because the property was withdrawn from the market.
A good sales agent wants to sell your home for the best price, as quickly and efficiently as they can. It’s in their best interest to do this, just as it is yours. A property that sits around on the market for too long becomes stale, and gives buyers pause to question if there’s something wrong with it. Likewise, a lack of buyer interest sometimes incentivises the few buyers that are interested to make low-ball offers.
Do you have the right contacts?
A sales agent can combat all of this by contacting people in their database of pre-qualified buyers. These pre-qualified buyers are usually people who went to an auction or made an offer on one of the agent’s other listings, but missed out; they’re people who are actively looking to buy now, rather than passively perusing properties while they make up their mind. Usually, their finances are ready to go.
When you throw a few pre-qualified buyers into the mix at an open home, a property will sell much faster than if you didn’t have them. Even if the eventual buyer wasn’t previously known to the agent, the extra turnout at an inspection heightens the sense of competition among buyers, and that speeds up the process — which also pushes up the price.
Even though selling your home privately does come with the promise of a few thousand dollars saved, it often takes longer to sell property privately, which can sometimes result in greater value for money for the buyer, rather than for the vendor.
Of course, people do sell successfully by listing their homes themselves. Just make sure you’re informed and know what’s involved. Before making a decision on whether or not to sell privately or to use an agent, subscribe to receive access to our free educational guide to selling property, called Selling Your Property: What You Really Need to Know. Alternatively, for more property news, insights and analysis, continue reading our blog.
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