How To Sell Your Property Without A Real Estate Agent

[youtube id="uoBshsXFdSM" align="left" mode="lazyload" maxwidth="500"] Selling your property yourself can save you thousands in agent commissions. Here's how to sell your property without a real estate agent. There are a lot of people who sell their properties every single year without the use of a real estate agent and thus saving themselves quite a large commission. Today I have with me Daniel Baxter from YourHotProperty.com.au. He helps people sell their properties without a real estate agent and he is going to talk us through the pros and cons of doing that as well as the process on how to sell your property without a real estate agent. Ryan: So hey Daniel, thanks for coming on today! Daniel: Hey Ryan, thanks for having me. I am really excited to be here today. Ryan: So, let us talk first about why would people consider selling their property without the use of a real estate agent. Most people will sell their properties through a real estate agent, what is the benefit of selling your property without a real estate agent? Daniel: Well, the biggest benefit - I guess the reason why we have, it is not just I guess, managers that have come to us. We have investors, we have developers; I guess what we do and how we can help people can really work with anybody. So, the big one is obviously the commission savings. Agents, the way that they are charging people, obviously, the fees are huge. Property prices are increasing, obviously, so did these fees. And the truth is most of them are doing less than what they did years ago but they are still charging the same or if not more. Ryan: And so what are the general fees that a real estate agent will charge someone to sell their property? Daniel: Well, it definitely varies throughout Australia. I mean the average probably, say in the metro area, is about 2%. But when we start moving out to rural areas and things like that, I have had clients with agents quoting anything up to 4.8% of the property price. Ryan: Okay. So 2% of a $500,000 property is $10,000. Is that right? Daniel: Yes. Ryan: And then a lot of agents as well will charge on top of that for advertising fees so you will be up for hundreds of dollars to list your property online, hundreds of dollars for a sign, hundreds of dollars for professional photos and stuff as well so you are kind of looking at an extra $1,000 or $2,000 or something in a lot of cases for advertising. Is that right? Daniel: Yes, easily. It is probably at least $2,000 to $3,000 most agents will put together for their marketing packages that they will suggest to people. But if you are looking at an auction campaign, a lot of agents love to talk everybody into an auction campaign. Some properties definitely suit that, a lot of them do not, but it tends to pay advertising so agents love it and a marketing campaign that can run anywhere between $4,000 to $10,000, easily. Ryan: Oh wow. I did not realize auctions were so much more expensive than just selling your property regularly. Daniel: Yeah. It is a very aggressive marketing campaign and they like to use a lot of print. As soon as you use print, obviously the marketing costs just skyrocket. Ryan: Yeah, and what is print media these days... Daniel: Well, to be honest I am really not a fan and I am happy to say that. Look, the statistics these days suggest that about 90% of buyers generated for property are coming online, so it does not really make sense to spend what might probably be $10,000 on print media what you might call paper magazines or your domain magazines and things like that, your local papers and things that come out where you choose their offers and things like that. It does not make sense to advertise and spend a fortune when very small percentage of the market is actually going there to search for property. Ryan: Okay. So the biggest incentive for people to sell themselves obviously so they do not have to pay their agent their commission, but before this we were also talking a little bit about are agents actually the right person to get you the best price for your property or not. Daniel: Absolutely, yeah. That is the thing. A lot of people come to us as well because they love the chance to get a little bit more control over when they sell their property. They are involved in the sale. They know what offices are actually being received and if they are not being received as well. It is one of the biggest things we have when people come to us and say that there is just no communication or there is a lack of communication between the agent and themselves. They do not actually have the feel for where the sale currently is at that point in time. Obviously, if you are involved in the sale you have an opportunity; you are up close to the buyers, you know exactly whether you have people excited or keen about the property or you do not. And if you do not, at least you know then, "Well, is my property overpriced? Do I need to look at a new pricing strategy or something like that? Or is there something else that I am not aware of?" And usually when you are getting that feedback firsthand, you can actually make an educated decision of what step you should take next rather than just relying on an agent to say, "Oh, you know Ryan, the market is not quite where I thought it was 2 weeks ago. You are going to have to adjust your price." And this is what I get told all the time, so yeah, control is always a big thing too. Ryan: Yeah, and we were talking before that agents have a commission structure where they are getting X% for the property, maybe let us call it 2% like we did before. We are saying that if you are selling a $500,000 property at 2%, you are getting about $10,000. Well, agents are probably getting about half of that because they have to pay half to the owner of the business as well... Daniel: In principle, yes. Ryan: And then, for you as an owner, getting an extra $10,000 will be awesome for you. To get an extra $10,000 for your property; but for the real estate agent, $10,000 is 2% of that is $200. They are only getting half of that, so it is $100. So they keep your property on the market for an extra week or 2 weeks or 3 weeks to deal with open houses and calls and stuff like that to get an extra $10,000, which means $100 in their pocket. I have worked on commission before and I understand the motives and things like that; like doing all of that extra for $100. Generally, most people are incentivised by that. I do not know, I think the commission structure is broken in terms of the motives and we see that through the statistics; they say that when real estate agents are selling their own properties, they keep them on the market longer. They generally get more for the properties. I do not know. It calls into question whether or not the commission structure and what we are paying the real estate agent is actually delivering the best results. I definitely think this is something to consider. But a lot of people would be scared about considering this because it just feels overwhelming or they feel like they do not know what they are doing. Can we talk through what is the process to get your property on the market, to get it for sale and go through that process? Is that alright? Daniel: Yeah, absolutely. I think that would be a great way to start because you also have to understand our service - look, it is not designed for everybody. I guess we have designed it for a smart, savvy homeowner or property owner who wants to save some money and is happy to be involved in the sale in certain aspects. And I guess the stream culture where we love DIY; we look at renovation shows and everything like that. Everybody is happy to do their part; if they can do a little bit, save some money, that is what everybody is happy to do, and that is where we come in, that is how we have designed our system. Ryan: The first question is do you need some sort of license or do you need some sort of permission from a government body in order to sell your own property? Daniel: Absolutely not, if you own a property you can sell it yourself. Obviously, as far as the legal system goes, as far as the contract and things like that, we would always suggest that people always engage or list a conveyance or a settlement agent if in WA to look after the process for you. If you do that then they are going to guide you through as far as exchanging of contracts, deposit money, what needs to happen there and when, and obviously conversing with the buyers, assessor or conveyance to look after that whole process for you. And to be honest, that is what we are paying, they are professionals at what they do, so we leave that in their hands to guide you legally through that part, so that is actually really easy. Ryan: So I am just thinking, let us say that I have a property that I want to sell. I know that I can sell it myself, is my first step to like contact a solicitor and engage the solicitor and say I want to sell my property myself? Or do we engage them after we have received an offer for the property? Daniel: Okay. So that is once again, that can depend on the state that you are in. A lot of states, I guess legislation varies as far as when you need to a contract in place and when you do not. So different states, it just depends on that; so Victoria - yes, New South Wales -yes, Queensland - the contract is actually drawn up after you find a buyer for the property when you are selling privately. So it can be a little bit different and that is something that we guide our clients through. I guess the first step that we would always say to people if you want to look at this process, it really does not differ from a traditional agency as far as what it takes to get a great result. It is very similar. So firstly, it is all about preparing the property for sale. Obviously,