With interest rates up and property prices down, it could be time to consider ditching the real estate agent and selling your home yourself. Selling property DIY style with no agent will cut the commission and potentially save you thousands of dollars.
However, there are some things you should know first.
Selling property DIY: risks and rewards
On average, Australian real estate agents charge around 2 per cent to 3 per cent commission on the final sale price of your home. That can be quite a chunk of change. For example, you’d be looking at paying an agent between about $16,000 and $24,000 to sell an $800,000 property.
Read: What happens to your super when you die?
That’s a price tag that’s motivating many homeowners to think about selling property DIY style. After all, no agent means you can cut the commission. But while it’s certainly possible to sell your home yourself, there are some potential risks that are worth considering.
Getting the valuation wrong. Real estate agents tend to use lots of property data to set the sale price of your home. Without an agent’s input, you could risk asking too little for your home and ripping yourself off, or too much and fail to find a buyer.
Not understanding your legal obligations. Australian states and territories have different regulations you’ll need to follow when selling your home yourself. For example, in New South Wales, you’re not allowed to advertise the sale price as ‘offers over’, and in Queensland you’ll likely need to provide a five-day cooling off period.
Hosting open houses. Unless you have the gift of the gab, giving potential buyers tours of your home can be trickier than it seems. Different buyers will value different things, so you may need to tailor your sales pitch to the individual buyer.
Read: Five tips to help you recession proof your life
Negotiating the deal. Fielding offers and negotiating the final selling price of your home can be a bit of a juggling act. Play hardball and you might risk chasing buyers away. But go too easy and you could risk leaving money on the table.
Five steps to selling your home without an agent
The good news is that all those challenges are solvable with proper planning. And if you’re willing to put the necessary time into selling your home without an agent, there’s a good chance you’ll end up with more money in your pocket.
Set the sale price. There’s a lot that goes into setting the sale price of a home. First, there’s the actual physical properties of the home. That is, the number of bedrooms, bathrooms and overall living space on offer, the age and condition of the home, and the size of the block it’s on.
The home’s location also plays an important role in the sale price, and the level of demand in the local property market influences how much the home is likely to sell for.
Pro tip: It can be worth paying for a professional property valuation to make sure you get this stage right. Using an independent expert will also help to ensure emotion around selling your home isn’t clouding your judgement.
Read: Think you know Australian law? Beware these common myths
Hire a solicitor. While it is possible to prepare the contract of sale yourself, paying a solicitor or conveyancer to do it for you can be worth the cost for the peace of mind that comes with knowing your legal rights and responsibilities will be looked after.
If you do decide to go it alone, you might want to check in with the relevant regulatory body in your state or territory to make sure you’re following the right legislation.
Be aware: Paying a solicitor or conveyancer can set you back anywhere from around $500 to $1500. But this fee usually isn’t included in a real estate agent’s commission, so you’ll likely still need to pay it even if you do choose to use an agent.
Advertise your property. Some major online real estate platforms don’t allow private sellers to directly post one-off listings. For example, to advertise an established property on realestate.com.au you must hold a registered real estate licence.
However, services like forsalebyowner.com.au and buymyplace.com.au can get your listing up on the major platforms (including realestate.com.au) for a reasonable fee.
Pro tip: Great photography will help set a strong first impression and get buyers interested in your property. While you can certainly take photos of your home yourself, hiring a property photographer will give your listing a professional look.
Open your doors. At this point, your phone will hopefully start ringing with inspection requests. Decide whether you’re going to host private appointments, or ask potential buyers to come to a pre-scheduled group open house. Either way, you might want to use a calendar app or spreadsheet to keep your inspections, buyer contact details and offers organised.
Be aware: Depending on the regulations in your state or territory, you might need public liability insurance to hold a private home inspection. This covers you against injury claims made against you if potential buyers slip or fall while attending your open house.
Negotiate the deal. While you might be dreaming of a bidding war that pushes the price of your home through the roof, proceed with caution. If you’re not in a hurry to sell, you might think about sticking to your list price as your first counteroffer. This can help to bring the buyer’s next offer up and reduce the negotiating margin.
Pro tip: Before you start any negotiations, it can be a good idea to know the lowest price you’ll accept for your home. This gives you a good baseline, and you can always reconsider if you need to speed up the sale.
The bottom line
Selling your home with no agent will certainly cut the commission and potentially save you thousands of dollars. However, selling property DIY style isn’t free.
You may choose to pay for a solicitor, a professional valuation, and to photograph and advertise your home. However, if you’re willing to put the time in, you should come out well in front.
This article originally appeared on Expert Analysis. It is republished with permission. YourLifeChoices is owned by Compare Club.
Have you ever sold a property yourself? What tips can you add? Why not share them in the comments section below?
The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.
