Selling a property privately may seem like a walk in the park but in reality the process is far more complicated and difficult than most people think. Lea Jacobs discovers why
YOU could sell your own property, but why would you want to? Yes, it sounds an easy enough exercise and yes, in theory anyway, you could save money, but given the complexity of the process there are a number of things that can go horribly wrong.
Ask most business people and they will tell you that although it is easy to fill in a tax return very few would consider doing so without the aid of an accountant. Why? Because they run the risk of making an error and if they do it could prove to be costly. It’s the same when you sell a house. The only difference is that while most will admit to having had to pay too much to the taxman, very few, if any, will admit to having lost money through a private sale.
We’ve all heard the stories of how a seller beat the system and made a mint, but seriously, how easy is it to play estate agent and come out of the deal smiling?
Adrian Goslett, CEO of RE/MAX of Southern Africa, says one of the main advantages of using an agent is the number of potential buyers they have on their database. You may say that the CEO of a large real estate company is going to say that, but think about it — the reason that real estate agencies sell more property than private individuals is because buyers approach the professionals in far greater numbers than they do those selling a property privately.
That’s not the only reason estate agents seem to hold most of the cards. Goslett says that overpricing is one of the industry’s biggest headaches and will not only lead to the property staying on the market for longer, but creates the wrong perception in buyers’ minds.
Securing a bond may also prove to be more difficult for those taking the private route. mainly due to buyers’ lack of understanding of a bank’s requirements. There are mountains of documentation, which, if completed incorrectly, could jeopardise a sale.
Even if the buyer and seller feel confident enough to tackle all of the above, there are other issues that crop up in just about every deal. Advertising the property, for example, can be expensive, particularly if you want it to be advertised in the traditional media such as newspapers and exclusive magazines. It also pays to remember that 80% of homes in SA are sold due to repeat and referred business.
Perhaps the biggest challenge facing those who are willing to go it alone is the time it takes to market the home successfully.
An agent does far more than simply taking a few pictures and knocking a “for sale” sign in the ground.
“The amount of time that has to be invested in getting a property sold is a burden on a home own- er,” says Goslett. “The private seller needs to ask himself some very important questions before he starts to market his property actively. Are you immediately available to show your home when a potential buyer wants to see it? How objective will you be when the buyer starts criticising elements of the home? Is the buyer coming through the door prequalified for a home loan or have they just popped in on a whim? At this stage only 40% of bonds that are applied for are granted by South African banks, which means that the average seller will probably have to ‘sell’ their home two and a half times before achieving a successful registration.”
The bottom line has to be exactly how much money a buyer is going to save by taking the private route — and let’s face it, it is the buyer who ultimately ends up paying an agent’s commission.
It has been shown time and time again that those attempting, and failing, to sell privately will often approach an agent to do the job at a later stage. What is interesting about this is that although sellers then have to factor in the commission when selling through an agency, more often than not the actual selling price will remain exactly the same as it was when the owner was trying to sell it privately. Makes you think, doesn’t it?