Agents fees vs selling a house privately

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14 years 4 months ago #11249 by reggit
In a few months we'll be looking at selling our place in town - the first time we have ever sold a property. Can someone enlighten me please on standard agent fees (goes in a scale of percentages, doesn't it) and also has anyone been successful selling a property privately - pros and cons :)

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14 years 4 months ago #174633 by Birman Babe
Tigger, I think they all differ from company to company & you can also make a deal with some agents when it comes to commission. We have always sold our own houses as, with TM, websites, etc, it seems to be reasonably easy and, in all honestly, I dont think many real estate agents earn the commission you get charged (hope I dont offend anyone by saying that). By doing it yourself you can pretty much use that agenct commission for advertising your own open homes and also as a bargaining chip when proepective buyers try to beat you down in price. I have been looking at houses recently & I cant believe how litttle the agents know about the property i.e. whether it has been rewired, in a wet zone, re-stumped, etc. Other people might see it differently but I would always sell my own property.

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14 years 4 months ago #174634 by jen
Regardless of whether you decide to sell privately or not.. never sign any agreement (even one from a real estate agent) without having a solicitor check it over first. This is doubly important on a private sale but still important in other cases.

With the market being slow, you could get better exposure through an agent but check the listings over a few week where you're considering advertising privately and see if there are heaps of them (ie: stuff isn't moving) or if they're still selling. Compare that with some of your local agents listings maybe to see what's going on there?

I know there's pretty much a glut of listings on trademe etc. But the agents could be deperate for listings and some may negotiate their fees (you can also list with multiple agents.. I wouldn't give anyone an exclusive listing with things taking longer to sell now.

jen (returned to townie life)
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14 years 4 months ago #174644 by wyseyes
Selling privately is usually our preference - or selling through an advertising helper (like TradeMe, GoGecko or Homesell). Homesell not only list the house in local papers, but on their website and freely on Trademe. They get no commission, just the minimal advertising fee up front.

Now agents demand lots of money for little show.

I have found agents spend very little time, and your money, in trying to sell the house. Sure, they arrange the advertising (between $500 and $3000 worth), then the rest of the commission goes into the pocket. Think about the commission of $10,000 the agent receives, what do they really do for that?

Some agents spread themselves around on openhome day, to the point where they get in some 'representative' who sits reading magazines, greeting lookers, ask them to sign in and 'look around'. They know nothing, can't answer questions, not helpful. Mind you, sometimes the agent is the same.

The best person to conduct a tour of your house, is you.

Most importantly is to set an internal price. A realistic price that (after expenses like lawyers, advertising etc) you can be happy with. Lock that in stone, don't let anyone talk you under (here again the agents are sometimes desperate for a sale, and talk 'compromise').

There is the opinion that buyers can use the fact that you aren't using an agency to drive the price down - thinking that the price will be $10000 cheaper. So set your happy price $10000 higher, then negotiate to split the difference.

I see you shiver in anticip......................................................................................ation

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14 years 4 months ago #174648 by Ziggy
Hey Tigger, we have sold all of our places privately, though two of those three were also listed with a agent but we retained the right to private sell in the contract.

This is a great way to go if you are unsure as that way you have everything to gain, if the agent get the $$ agreed you pay x but if you sell it by word of mouth, trade me etc then you can get it sorted and not pay anything. If you list with a agent and don't retain that right to private sell even if someone knocked on your door wanting to deal with you and buy your place you would have to pay commission.

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14 years 4 months ago #174652 by GrantK

tigger;145789 wrote: In a few months we'll be looking at selling our place in town - the first time we have ever sold a property. Can someone enlighten me please on standard agent fees (goes in a scale of percentages, doesn't it) and also has anyone been successful selling a property privately - pros and cons :)

We sold our first house privately Tigger, back in 1990 before the internet was invented, and that definitely made things more difficult. We had to pay out for quite a few ads in the Herald.

Now with TradeMe and the likes, it's much easier. We will be selling our current house in the next year or so (hopefully) and I have recently done some looking around and settled on Homesell as Wysyes mentioned above.

Have a look at this web page; it should answer a fair few of your questions:

http://www.homesell.co.nz/articles.php?task=viewdetails&table=articles&recs_a=73

As for the percentages charged by your run-of-the-mill real-estate agents, it is usually between 3 and 4% + GST. Which adds up to a LOT of money on a $500,000 house.

I hope that helps.

Cheers,
Grant.

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14 years 4 months ago #174658 by The Kats Place
My understanding is 4% on the first $400,000 and 6% on the balance - thats what they were asking for the place I just sold.

kats
Live your life in such a way that it will be easy for people to say nice things at your funeral [;)]

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14 years 4 months ago #174659 by GrantK

The Kats Place;145821 wrote: My understanding is 4% on the first $400,000 and 6% on the balance - thats what they were asking for the place I just sold.

You could well be right there TKP, I haven't looked at it for a while.

Keep in mind too that those fees are + GST which for residential homes, cannot be claimed back.

Here's another little snippet of interest from yesterday's TradeMe Property Newsletter:

http://www.lifestyleblock.co.nz/vforum/attachment.php?attachmentid=79&stc=1&d=1203656709

You can see how far TradeMe Property is ahead of the other Real Estate sites. And yet some Real Estate Agents -- notably Bayleys -- do not use TradeMe. Some sort of snobbery thing going on there possibly :confused:

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14 years 4 months ago #174665 by reggit
Thanks guys, my BIL is a lawyer [;)] so will be involved in any agreements put together before they are signed!

We are also getting a registered valuation just before we put it on the market that we can refer people to, regardless of whether we decide to go with an agent or not...

Take a break...while I take care of your home, your block, your pets, your stock! [;)] PM me...

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14 years 4 months ago #174668 by PRU2
Getting your own reg valuation is a good idea, you know exactly where you stand, when bargaining starts etc,
Try and avoid if you can "subject to the sale of a prospective purchasers property", (this is quite often unavoidable) as it only needs one of the contracts in the chain to fail, and then you are back to square one. If you do, make sure you as the seller puts in "a cash out clause", and don't get signed into sale and purchase agreements that give all the benefits to the buyer. If they are serious buyers they will have finance approved quickly, be suspicious if the buyer keeps delaying or extends the dates out.
Remember you are in control and get everything checked over by your solicitor, and keep on at the buyer if deadlines go by and you don't get confirmation when agreed on. They can be ploy tactics.
Once the Sale and Purchase agreement is underway your solicitor should be in control and deal directly with the buyers solicitor.
Good Luck, enjoy. :D

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14 years 4 months ago #174673 by GrantK
Here's another tip from the Bayleys' lady yesterday:

- Buy a copy of the LIM report to have handy for prospective buyers

It avoids yet more delays with any Sale & Purchase agreement because with some councils, it can take up to 10 days to produce a LIM report. Yes, it does cost around $200, but it avoids another unnecessary delay in the process as buyers are typically given up to 15 working days to procure and examine the LIM before waiving that condition.

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14 years 4 months ago #174723 by DiDi
OK - here I am with a difference of opinion! Grin.

I recently sold 5 acres of bare land and I was absolutely thrilled with the service I received from the Real Estate Agent. There was no way in **** that I could have shown that many people the land, let alone taken all the phone calls and making arrangements to suit me, while working full time so you need, in my humble opinion, to take that into account as well.

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14 years 4 months ago #174729 by GrantK

DiDi;145890 wrote: ...There was no way in **** that I could have shown that many people the land, let alone taken all the phone calls and making arrangements to suit me, while working full time so you need, in my humble opinion, to take that into account as well.

Yes, you're dead right DiDi. It does take a big time commitment to sell privately. Last time we managed to pull it off, even though the kids were 4, 4 and 6 years old respectively. I wouldn't try and go through that again, but this time it should be easier with any luck.

Last time we listed our place we started out with an exclusive agency which then lapsed into a general agency through several agents. At the same time we had a private sale sign out front, and ran our own adverts in the Herald. We found that most of the visits from agents were for showing their various salespeople through our house, rather than actually showing prospective buyers.

This experience put us off, and in the end, it was a contact made through our own Herald advert. that netted the sale :cool:

Now that TradeMe is available, it screens out an awful lot of tyre-kickers as they can see pretty much what is on offer from the online ad. It will be an interesting experience for sure :)

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14 years 4 months ago #174773 by flyingfeathers
I'm soon to be a shark, whoops meant to say real estate salesperson [:0] :D

Working out what percentage I get of the 4% commission turns out to be not a great deal in the end [}:)] No sales no pay as well, good job OH works a steady job thankfully for me to do this.

It's amazing what peoples perceptions are of the work sales people do, the agent who sold our last place basically ended up working for not very much at all by the time we cut his commission way down and the amount of advertising and time it took to sell in the end.

Trademe is a great site but as we found not a lot of people (especially around here) don't buy from that site. We found we looked at it daily and then if we found a property on there we would go on to another couple of real estate sites before deciding whether it was something we wanted to see. If it was selling privately we tended to avoid it because we weren't confident at the time of how the process worked. Would definitely consider now going ahead and buying privately because we know the process inside and out.

Buyers are coming more around to private sales but it's not always easier and find that usually salespeople have a number of people on the book that may not look daily on the private websites.

Usually agents charge around 3-4% but as I've said we bargained hard and got it down to around 2%. Get the agents in and let them have a look around see what they say price wise, if you're brave enough go it alone for a time. If nothing happens put it on with the salesperson you feel most comfortable with.

Good luck :)

7 acres in the wonderful South Wairarapa

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14 years 4 months ago #174776 by maggies mum
Replied by maggies mum on topic Agents fees vs selling a house privately
We used an Agent, I felt we paid a lot of money, but he brought heaps of people round & he negotiated a price we were happy with. To be honest we could have done it ourselves but it was stressful enough as it was without having to deal with the hiccups along the way with out an agent.
The fella we used was the companies No1 Agent and one of the top on the country.

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