Selling your home is a hugely expensive experience, yet this fact is often forgotten in this champagne-popping era of record sales figures and hot auctions.
It is true that many sellers are securing great prices for their houses, but they still have to hand over stamp duty to the government, when they buy their new home and a commission to the real estate agent when they sell.
While the former is impossible to avoid, some vendors are choosing to bypass the latter by marketing and selling their own home and saving tens of thousands of dollars in the process.
For Sale by Owner
Investor and property lecturer Peter Koulizos has noticed the emergence of numerous For Sale by Owner (FSBO) sites over the past couple of years, which provide online packages for private sellers.
Most of the businesses offer a listing on the two main property sites – realestate.com.au and domain.com.au – with some throwing in property advice and signage for (in most cases) less than $1000.
“As technology moves even further along, I think we will continue to see this niche market grow,” Mr Koulizos says.
“The median house price in Sydney is $800,000 and if you are paying an agent 3 per cent on that you are looking at $24,000 in agent fees and that is not even including marketing costs.
“That extra money could be put towards a new car or even the deposit for an investment property.”
Go to the buyers directly
Craig Heppell worked as an agent for 12 years in Queensland before setting up his Agent in A Box website for private sellers in May last year.
Mr Heppell says his about-face came after he realised “people don’t follow agents, they follow properties”.
“There is a myth in property that there is a secret cave somewhere where agents keep their rabid buyers ready to fight over your property,” Mr Heppell says.
“The reality is that buyers are like trying to herd cats, and what they follow is properties, not the agent.”
Mr Heppell says while there will always be a place for traditional agents, his service – which offers a $349 essentials package that includes a listing on realestate.com.au, advice and signage – trades on the popularity among buyers for online home hunting.
Price it right
Barry Skinner, owner of Sell My House Online says price is the key to nailing a private sale.
“As long as you price the property correctly, and to do that you need to have a good understanding of the local market, then you will sell it,” Mr Skinner says.
Mr Skinner set up his business six years ago after he successfully sold his townhouse, without an agent, for $40,000 more than he was hoping for.
He initially interviewed three local real estate agents to sell the property in Shellharbour, on the south coast of New South Wales, and was dismayed when presented with three vastly different estimates for a sales price.
“I thought to myself, ‘I can do this, no one knows my home better than I do’,” he says. Mr Skinner created a blog for his home, which featured attractive photos, and ran an ad in the paper to advertise his blog and open for inspections.
While FSBO sites are the most popular model used by private sellers, a minority of people forgo the market altogether and swap homes.
In this scenario, a vendor exchanges their house or land for another of equal value, through websites such as My Property Swap.
Others may list their home on classifieds website Gumtree, or even stick a sign in the front yard with their mobile number on it, which may be cost-effective but is unlikely to reach a large pool of buyers.
Mr Koulizos also warns that sellers are unlikely to get a good price if they list on Gumtree as most people searching the site “are on the hunt for a bargain”.
Mr Koulizos argues that the private sale process may not be for everyone as some people need the negotiation skills of a top agent.
Furthermore, some vendors are unable to determine the true value of their home.
“Emotions become involved and if it’s your house you are selling, you may think it is worth a certain amount and not accept anything less,” he says.
Or you could under-sell it, too, and negate the money you saved on an agent by missing out on a higher sale price.
Which is why Mr Koulizos recommends private sellers obtain an independent valuation of their home, which costs about $300, before they list it.
Johanna Leggatt is a Melbourne-based freelance journalist. Follow her on Twitter at @JohannaLeggatt