Selling a home has traditionally involved the use of a real estate agent who has been tasked with the responsibility of marketing and selling the home. For their time and effort they are paid a commission on the sale proceeds. Whilst many view this as a necessary part of the sale process, the question needs to be asked, can I sell this house without an agent?
The good news is that it is actually possible to take control and sell your house privately and for the sake of some time and energy, thousands of dollars can be put back into your pocket.

Before I go through the pros and cons, I feel it is a good idea to explain how the commission process for real estate agents works. In this sense, real estate agents don’t always have your best interests at heart.

Real Estate Agent Commission Structures

You will employ an agent who works for a particular firm; that firm will have a set commission structure. As an example a NZ firm will charge the following, 4% on the first $250,000 ($10,000) and then 2% thereafter. Some agents even charge the 4% through to $350,000. They will also generally charge you an administration fee of $500. This fee covers a basic marketing package but you will generally be expected to pay for media advertising outside your set package.

So say you sell your home for $400,000. You would expect to pay out $13,500 in commission. Of this half goes to the firm and half to the agent. If another agent introduces customers to the property then the 50% that is set aside for the agent is split between the selling agent and the listing agent. For this scenario we will assume that the listing agent is also the selling agent. They will receive $6,750 for the sale as their share of the commission.

If your home was sold for $420,000 the commission to the agent would increase to $6,950 or an extra $200, whilst you would get an additional $19,600. As we can see the additional income is hardly enough to motivate the agent. The incentive for the agent to get the best possible price for your home is not really reflected in their commission, a speedy sale and fast turnover of listings is more important.

The agent does have access to buyers and a thorough knowledge of the property market (hopefully), but most of the agents in the market today have elementary training due to widely accessible entry requirements within the industry.

Sell your House Online

With the internet being used as a major marketing tool for real estate sales, it is easy for people looking to sell to do their own market research. The internet is also a great tool to use when attempting to market your property on your own or even sell your house online. Sites such as eBay and TradeMe are cheap to use and easy to set up. It’s possible for you to have your property advertised in a matter of minutes. The number of real estate agents that use these sites to market properties or for online house selling is testament to its marketing power.

Can You Sell a House Without an Agent?

Short answer: Of course you can! Real estate agents do not hold any special powers that enable them to deal with property that the average person does not have. If you feel you are capable of selling your property then chances are, with a little help from some associates, you probably can sell your own house.

With the widely accepted use online house selling now, it is possible to market your own property yourself for a fraction of the costs it would cost you to employ an agent. You know your home better than anybody and can use this information to your advantage. You can set up open homes at times that suit you and can deal directly with the people who are looking at your property. You are sheltered from the real estate banter that so many people hate.

On the flip side, there are people out there that do not want the hassle of dealing with people, spending time answering questions and have to sit around and watch strangers walk through your home commenting on your favourite holiday snaps that hang on the wall. For these people, employing a real estate agent is probably the better idea.

How to Sell your House Privately

A good property solicitor is worth their weight in gold. They can draw up sale and purchase agreements, offer advice on what clauses to put in the contract and also help answer any questions that you may be unsure of. If selling a home for the first time, employing the services of a trusted solicitor is recommended. Generally speaking, most people will employ a solicitor to help out with the sales process even if it is just to control the discharge of mortgage security.

The financial implications of selling a house privately as well as sell tips and advice and more information on how to sell your house privately will be addressed in future articles.

Property Investment requires selling of houses almost as much as it requires buying of houses. One of the key property investment tips to consider is whether to sell the property by auction. Here are the ten key reasons why property investors need to consider using an auction instead of a negotiated sale to sell their investment property.

1) Transparency

If the residential rental properties are owned by a group of investors, then transparency is a must. The person managing the sale needs to show his fellow investors that the sale was genuine. Too many scandals involving backhanders and under the table dealings have emerged during the recession aftermath to take any risks with your credibility.

An auction is more transparent than an open sale because it is visible, and the formula is simple – the highest bidder wins the sale. This is not that case in an open sale, where the winner may just be the person who entered negotiations first, and this is too vulnerable to a sale happening because the two parties know each other.

2) Potential for Investment Gains

The increased potential for improved property investment gains is obvious. Buyers are competitively out bid each other. They are under more pressure to bid higher than could ever be replicated in a negotiated sale.

3) Completion Rate

One of the biggest issues with a negotiated sale is contract conditions. Buyers and sellers list their conditions in the contract as to what needs to happen or what can’t happen to complete the sale.

Skilled property investors use conditions effectively. However, compared to an auction sale they can just create hassle.

Auctions have a higher completion rate due to not having conditions placed on the sale. At the end of the auction the buyer and seller sign on the dotted line and the sale is complete.

4) ‘Conditional on Finance’

Of the conditions, the ‘conditional of finance’ is the biggest hurdle for investment property sellers. If a buyer enters the negotiations with that in the contract the seller is forced to wait and see whether the buyer gets the finance. If the buyer doesn’t come through with the finance, the seller simply has to start again with a new buyer.

5) Cash Buyers

The presence of cash buyers increase both the likelihood and the ease of a sale. Cash buyers make a sale easier for an obvious reason – they have the money. Even if bidders are not cash buyers they will at least be financed or have preapproval.

6) Marketing Costs

Auctioneers and realtors that specialize in auctions generally have large databases of potential buyers. The database plus the strict timeline an auction offers is perfect for reducing marketing costs. Simply contact the database, put a sign out on the front lawn and conduct open homes for the next three weeks. To increase the buzz around the neighborhood a simple mailbox drop could be considered.

Compare this to the limitless marketing costs that could be involved with negotiated sales through traditional newspaper advertising that could go on indefinitely.

7) Definitive Timeline

An open sale has no clear timeline. It can go on indefinitely. An auction sale, however, has a deadline: the end of the auction. Providing at least one buyer bids the seller has the option to complete the sale.

8 ) Controlled Viewings

The open nature of a negotiated sale’s timeline means the viewing schedule can be very open for buyers and a burden for sellers. Alternatively the contracted timeline of an auction sale reduces the amount of time a seller needs to spend showing people the property. Three weekends’ worth of open homes is often adequate.

9) More likely to end in a sale

An auction is more likely to end in a sale because motivated cash buyers arrive in a competitive bidding environment willing to make a sale.

10) Pre Auction Offers

Even before the auction takes place many property investors receive offers. For the reasons stated above sellers may not want to accept these offers. However, the fact that they have this option as well as the opportunity to take into a competitive bidding scenario really does allow for the best of both worlds.