When the real estate market tightens up due to interest rate increases or other factors, lots of home sellers will start thinking that if they do away with the services of an agent and sell privately, they will be able to lower their home price and sell faster.
However, there are numerous problems that can occur between the time a home is put on the market and the time it is actually transferred to a new owner, and knowledge of these problems may well help you turn a would-be private seller into a client. Just ask them the following questions:
Do you really know what your property is worth in today’s market?
Price a home too high and you’ll discourage potential buyers, too low and you’ll lose part of your profit. Real estate prices are never fixed, especially in the current economic climate, and by working with a good agent, you can establish what buyers who are in the market today are willing to pay for properties like yours in the same or similar areas.
This price could be different tomorrow or next week. What you paid for your property originally, how it is valued by your municipality or insurance company, and how much you need to buy your next home have no bearing on the current market value.
Do you have comparable properties to show buyers?
Even if homeowners do have some information about recent sales and prices achieved in their area, this may not be enough to help them price their homes correctly or convince buyers that they will be getting good value. Serious buyers will usually want to see other homes in the area to get a good feel of what is available for their budget, and a good agent will usually be able to help them do this.
How will you advertise and market your home?
Can you prospect for homebuyers during the day? Buyers are seldom represented by agents in South Africa which means that most of them are going to use a newspaper, property magazine or the Internet to search for a home. Will you be able to place your advertisement or listing where it will it is likely to attract the most attention and will you always be available to handle the responses to these ads, qualify buyers and arrange viewings? Effective advertising is part of the deal when you work with a good agent.
Can you call a potential buyer back without being on the back foot?
Does the seller know what to say, what not to say, and what questions to ask potential buyers? Agents know how to identify a qualified buyer and not someone who simply wants to gain entry to a home; and know how to set the stage for negotiations over the property.
Are you available to find prospective buyers on a full-time basis?
Most homeowners will have a job that is away from home for most of the day, making it impossible to show the home except in the evening or on weekends. Many buyers can’t or won’t have the patience to wait to see a home – they are too afraid someone else will come in and make an offer before they get the chance. Having an agent who is prepared to show buyers the house while you are still earning at your regular job is worth the commission and will get you the sale much sooner.
Can you take objections and criticism without getting emotional or upset?
The chances of finding a buyer with the exact same tastes and appreciation for your home as you have are slim to none. Buyers are looking for homes that suit their needs and lifestyle preferences, so as a private seller you will have to keep smiling while they detail everything they would like to change about your precious home and make much of every little flaw they can find in order to maximise their negotiating position. Working with a good agent means you won’t have to do this and will have someone professionally trained to keep their cool and negotiate on your behalf.
Are you familiar with all the financing possibilities to help facilitate the sale?
In a perfect world, every buyer would come to the table with the whole purchase price in cash, but the reality is that the majority will require a home loan for the sale to go ahead. Do you know where to send them? Do you know what the benefits are of applying for a loan through a mortgage originator? How will you establish what kind of credit record they have so you can tell if they are even likely to get a loan? In fact, how will you be able to tell if they can even afford your home? Working with a good agent means you won’t end up accepting an offer from someone who isn’t financially capable of buying your property and wasting marketing time and money while potentially also losing the interest of other, more qualified buyers.
Do you really have time to handle all the paperwork?
It’s the property owner’s job to get the home ready for showing to potential buyers and it is tough enough to handle repairs and maintenance, staging, appointments for viewings and walk-throughs with prospective buyers.
The short of it
The thrust of your argument is simple:
If a seller doesn’t work with an agent, they will also have to organise show days, place and evaluate the advertising (seeing what works and what doesn’t), become an expert in real estate contracts and establish all the legal responsibilities and potential liabilities. Then, if they do find a buyer who is interested, the seller will need to handle their own price negotiations to move the sale to a conclusion. They may be obliged to help the buyer organise finance, and make sure all the necessary info and documents get to the attorneys who are handling the property transfer. This is all while trying to find and buy a new home themselves and organising the move.
A would-be private seller should be able to see that the lure of not using an agent isn’t worth the considerable effort that is needed in order to make a success of a sale. Asking these questions should bring a client back round to feeling confident in using you agent expertise to handle the selling of their property.