The real estate agent told me they were giving me a good deal. A commission rate of “only” 3.95%. Oh and then they mentioned I would have to pay for a photographer for professional photos. Ok, I thought, why is that not included in the commission. Then they said if I wanted to list on Trademe, I would have to pay for the listing fee on top. Still seemed strange to me that wasn’t included. Oh and then if I wanted to go for auction that would be another fee.
Then the kicker- I was told that I would also need to pay for an advertising campaign for a spread in a property magazine. A property magazine that the company that the agent worked for owned! What?
All up; here is what it was going to look like to sell my house
- Commission at 3.95% : ~ $13200
- Auctioneer fee: $499
- Photographer: $399
- Listing on Trademe: $359
The marketing campaign, advertising package, including a spread in a magazine: $2499
Total to sell my house: $16,959
I took one look at this figure and asked the agent to kindly leave my house. And the lawyer’s fees would be on top of that!
That fee was nearly equivalent to what I paid on the mortgage for an entire year!
I decided to try to sell privately!
Now I have seen many privately listed properties, and I could tell the amount of effort that has gone into them. Namely, not a hell of a lot. I was determined to be different. After all, I was working to save myself $16,959. There were several things I had to consider. I had to determine my pricing strategy, I had to advertise, and I had to host open homes, and I had to be prepared to negotiate.
Considering I had talked to several agents, I knew roughly how much they thought the house could sell for, they were estimating between $320K to 350K. I am no expert on property values after all, but this would give me a good value to start off at. So I decided to advertise with a price of “$339,000 + to view”. Taken right out of the real estate agents handbook. What does the “+” even mean when you see houses advertised like this?
Now it was time to advertise. My strategies here was exactly like the real estate agent. List on Trademe for $359. I needed some photos, but I had to stage my subject. I cleaned the house from top to bottom, cleared all the junk so that none of it was in sight. Mowed the lawn, tidying the garden, and staged photos and painting on the wall. I couldn’t believe that it was the same house I had been living in for 4 years.
I decided to take the photos myself, as I had a decent camera and thought of myself as a photographer. However, the photos were, let us say, not so great. Plan B went into motion, and I hired a semi-professional photographer who had a listing on Trademe. He came by one lunchtime and took the photos. He only charges $299, reasonably expensive for the hours’ work, and maybe a few hours touching up in Photoshop, but I was happy with the results.
I carefully wrote a listing on Trademe, uploaded the photos, and created a double-sided physical flyer in Microsoft Word.
Then I nervously waited until the open day the next Sunday.
The first night I listed on Trademe, I received 6 phone calls and several emails. They weren’t from potential buyers thought.
They were all real estate agents, saying that I should consider listing with them if I can’t manage to sell my house. One even said that I was wasting my time and should give up now. Many were saying that they could get me far more money than what I was listing it. I thought that they would have to sell my house for $17k more than what I was listing for that to even be worth it. And since that was above their highest expectation of what my house would sell for I passed all the offers up.
I then updated my Trademe listing stating I wanted no contact from agents.
The week ended and I had my first open day. My intention was to hand them each a flyer and give them a quick tour. There were too many people for me to show each one around. So I just gave them a flyer and let them at it.
After that one open day, I had 2 potential buyers already very interested. One wanted to negotiate on price and come back for another time to have a look, and the second was already organising a building report to be done. No mention of price from this guy. That was a promising sign.
I ran two more open days over the next two weekend. I had around 5 to 6 families or couples come through at each one. I didn’t hear from the first keen buyer from the first open day. The second keen buyer had the building inspector through and was making his decision.
On Monday night, the second keen buyer ranges me and made me an offer at the price I had listed. $339,000. He was going to send it to my lawyer.
Long story short that was how I sold my house privately at a cost of $658, and about 20 hours worth of time I’d spent listing, advertising and hosting open homes. A total saving of $16,301. And I still keep in contact with the new owner on occasion!
After all this the things I learn where it is a relatively easy process to sell a house privately. The hardest part was keeping it super clean for the open homes.
So if you ever want to sell your home privately, I would suggest you give it a proper go. There is a potential for you to saving thousands in commiddion fees.
*I must mention that in the midst of all this I was in contact with a lawyer from the beginning. The lawyer charged me $1200 to do all the paperwork, but that is not included in my final price, as I would be paying this if I sold privately or through an agent. In hindsight I could have possibly got more for my house, as the buyer who had purchased it must have thought he was getting value for his money as there was no negotiation, but let’s not be greedy.
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