What are the costs vs benefits of selling privately in a Hot Real Estate market?
This is a valid question, as we see properties selling in record time. You may calculate the commissions and say 'I could do that and save' or maybe you have other reasons... let's take a look at those:
Some benefits or reasons people sell privately:
- Control of the Sale - they want to show it, advertise it, and work an offer to get it sold. They have the time to coordinate phone calls and have the sales skills and time to work and convince the buyer that this is the right home. Also, who knows the property better than me?
- Save Commission - saving half or all the commission is enticing... who wouldn't want to save money? NOTE: You will typically have to pay at least one agent as 98% of homes sold in Ottawa have an agent involved. Also, the cost of a lawyer increases because they do more work.
- Convenience - this is related to control. They can control the time that they will show the property.
- Agent Reluctance - had a bad experience with Realtors and don't have the trust.
- Want to price it at 'their price' - that may be not what Realtors are advising and they want to do it their way, whether it sells or not.
These are all valid reasons and could be beneficial to an individual if everything goes according to plan... BUT... there are some blind spots/costs that usually aren't considered... here they are:
- Time - we only have so much time in a day, but a buyer wants to see it on their schedule. A lot of private sellers pick only their time, or don't follow up with agents or leads in time and they buy something else. NOTE: Limited showing time, limits buyers.
- Market Value Changes - changes are happening to price and Realtors have the changes at our fingertips... sellers need to dig for info and usually don't understand it fully... partially because of...
- Emotional Attachment - it's your home... so of course there's an attachment! This typically leads to overpricing, in which buyers will not look at an overpriced home or view it and offer on another one. Also, there can be some uneasiness when potential leads are insensitive with questions or feedback, which then turn them buyers away. This leads to no offer at all.
- Unqualified Buyers - As Realtors, we qualify our buyers. As a seller, it's hard to do so and unqualified buyers waste a lot of your time.
- Exposure - Limited exposure. You only have 24 hrs. in a day! A Realtor gives exposure to more buyers via marketing and our agent network usually gets 3-5x the showings than a private sale...which leads to...
- Multiple offers - you may get an additional offer but what if there were 6 or 7 offers you could get? Nine times out of ten it creates a higher sale price.
There are more reasons, and I'd love to hear your feedback on what I posted and what you believe... feel free to connect with me on my website at www.InvestProperty.ca.
I hope this was of good value and I look forward to chatting soon,