Selling your home privately: the need to knows
A comprehensive guide for selling your home privately in NZ.
What you need to know:
- What is a private sale?
- The pros of selling your home privately
- The cons of selling privately
- How to make a good job of selling privately
Most New Zealanders can’t imagine selling a home without a real estate agent to help them through the process which is, after all, the sale of their most expensive asset.
But what happens if you don’t want to work with a realtor and you’ve got the time and energy to deal with all the buyers’ questions and viewings? Sure, it’s a less common approach, but that doesn’t mean it can’t be done – and Trade Me Property is here to support private sellers.
Read on to see what it all entails and decide if it’s for you.
What is a private sale?
A private sale simply means that you’ve decided not to work with a real estate agent when selling your home. This means all of the legwork they’d normally pick up, from marketing your property to showing people around open homes, will be your responsibility instead.
Selling privately doesn’t mean you have to do everything alone, however. For example, you’ll still need the services of a lawyer to help you with drawing up a sale and purchase agreement, as well as helping out with any other legal matters that come up.
If you're selling privately, it's up to you to get the word out and bring in buyers.
The benefits of selling a home privately in New Zealand
Generally, if you’re selling without a real estate agent, you’ll be doing it for one (or, more likely both) of these reasons:
1. Cost saving
2. More control
For some, it’s important to feel fully in control of selling your property. While a good real estate agent will work with you, and follow your instructions you’ll inevitably lose a degree of control.
Other benefits of selling your home privately:
- Cutting out the middle person: some people simply don’t like working with real estate agents, or have had bad experiences in the past. By selling on your own, you won’t have to worry about managing this relationship.
- Price flexibility: because you’re not having to pay estate agent fees, you might feel you can put your house on the market for less, and thus attract a larger pool of prospective buyers (if you’re good at getting the word out!).
- You know your house better: ultimately, even the best realtor out there won’t have the same knowledge of the property that you do. If you feel confident that you know what buyers are looking for, and how your home fits the bill, you might be able to make a more compelling argument.
Selling your home privately puts you in the driver's seat.
The drawbacks of selling a home privately in New Zealand
There’s no doubt that an experienced real estate agent brings a lot to the party. If you decide to sell privately, you’ll need to be aware of what you’re missing out on:
1. Agents will likely bring you a bigger pool of buyers
There are a few reasons for this:
- Good agents have an existing pool of buyers: savvy sellers will choose an agent who has a track record for selling properties similar to their own. The agent will have met plenty of buyers hunting for properties like yours who they will notify when your home comes to market.
- They have the right professional contacts: from stagers, handymen or women to photographers, experienced agents will be able to call on their extensive teams to get the ball rolling quickly for key stages of selling a property.
- They know what buyers want: today’s real estate consumer is demanding, and you may find yourself overwhelmed by the sheer amount of admin involved in answering queries and keeping them happy. Seasoned agents will be used to handling this and will have a system for keeping in touch with a pool of buyers.
2. There’s more work and stress if you’re selling on your own
Selling a home without an agent will mean you’ll be doing the majority of the heavy lifting.
The task can quickly become stressful and all-consuming. This is particularly the case if you’re also looking to buy a property – juggling the two without professional help to lean on is tough.
3. You could miss out on valuable market knowledge
Technology has revolutionised the real estate industry, and good agents have heaps of valuable insights about local and national trends at their fingertips. Their data can help both you and buyers gain a better understanding of what your house is worth.
Of course, you can do this work too. For example, Trade Me’s Property Insights tool allows you to view records, rateable values (RVs), estimates, and recent sales for over 1.5 million NZ properties.
Real estate agents have market insights and knowledge you could miss out on by selling privately.
4. You might end up selling for less
One of the toughest things for first time private sellers is handling price negotiations. Here, the experience of a seasoned agent can be invaluable in navigating the process and coming out with a good result. Agents work very hard at getting competition going between buyers which tends to raise the price you end up with.
Having said that, your lawyer can act as a go-between with the buyer and be in charge of the negotiating if it’s not your thing.
Tips and must-knows for selling your home privately
1. Make sure buyers know about any issues with the house
This isn’t just a tip, it’s a legal requirement.
While you don’t have to advertise problems with your home, if a buyer asks the question, you need to give them an honest answer. Also, if a buyer indicates interest in making an offer, you may also need to tell them.
2. Get a lawyer (or conveyancer) onboard
We’ve already mentioned this one, but it’s worth emphasising again. Especially when it comes to drawing up sale and purchase agreements, having a lawyer is a necessity when selling privately.
And once you’ve signed a sale and purchase agreement, you’ll need your lawyer or conveyancer to hold the buyer’s deposit in their trust account.
3. Get your pricing right
Without a real estate agent to bounce ideas off, it’s on you to decide how much you’re going to ask for.
There are a few things you can do to help get this right:
- Use online tools: a good first port of call for valuing your house can be to use tools like homes.co.nz’s Property Insights.
- Attend open homes for similar properties: as well as picking up useful tips for your own open home, by attending these events and checking what the properties eventually sold for, you can get a good ballpark.
- Get a professional valuation: professional valuers look at a range of factors to determine how much your home is worth in the current market.
4. Don’t get bounced into a sale
When selling alone, it can be easy to sell to the first person who puts in a good offer. Of course, the decision is entirely yours, but if you think you can do better, don’t be afraid to back yourself and either negotiate or walk away.
It can also pay to do your own reports, for example builder’s reports or LIM reports, to ensure what a buyer says their report told them, is true.
5. Don’t skimp on marketing
Are you going to hire a professional photographer and stagers? Or do you know people who can help you out? Buyers will expect a certain standard and they will punish you if you don’t deliver.
And remember, it’s worth taking the time to write a really good Trade Me listing that will catch buyers’ eyes.
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