You, Yes You, Can Sell Property Privately
(with a little help from your real estate attorney).
What did Estate Agents do 10+ years ago that you couldn’t do?
Sell Property Privately – In the distant past selling your property required the services of an agent because they controlled the market. Remember that there was no internet, so a seller couldn’t advertise their property in a way that prospective buyers could easily access, and buyers had no effective way of finding sellers. It needed somebody to become an intermediary to gather lists of sellers and buyers and put them in contact with each other.
And so was born the estate agent. It made perfect sense – agents’ attracted sellers, marketed their properties in their shop windows (and later, newspapers) and when a buyer contacted them they would take them to the property and hopefully sell it. If it didn’t sell they would keep the prospective buyers’ name and in this way collect a list of prospective buyers.
Meanwhile behind the scenes, agents gathered skills and experience on how to administer the marketing, legal and relationships of the selling process, thereby entrenching their position as “the only viable option to sell a property”. For this fairly unique service they charged the buyer a fee, or commission, which peaked in South Africa at circa 7.5% of the value for which the property was sold.
What do Estate Agents do today that you can’t do?
Sell Property Privately – In the mid-1990’s the internet started being widely used in South Africa. There are two major impacts that this has had on the property industry. Firstly, individual sellers and buyers now have a practical tool that allows them to contact, and contract with, the same groups of sellers and buyers that sit on the books of agents, without having to use the agent to do so – for example, sellers can list their properties on free or paid portals and buyers in turn can search these portals by area and price until they find one suitable for their needs.
Secondly, search engines have allowed us to access web sites that explain and expose previously “hidden” information on just about anything – for example, sellers can search the deeds of all properties sold in their neighbourhood to help them value their own property, or download a template of a free legal contract.
So, what can an agent add to the process today? The two most important things that a good agent has, that most private sellers might not, are experience and certain skills – for example, experience on how to word an advert or prepare a home for a show day, and skills in negotiating with a buyer for the best price.
What Estate Agents would have you believe
Sell Property Privately – Articles published by agents would have you believe that private sellers are doomed to failure. Below is a sample of things they have said in this regard and our view on these statements.
“An agent brings an air of objectivity to the sale”. Maybe. Some agents have admitted that the only interest they have is selling the property, for whatever price (meaning they will push the seller to accept a low price so that they can get commission NOW). Is there such a thing as an objective agent?
“Familiarity with sale agreements and other legal documents”. This is where we as Neil Parker Attorneys, experienced real estate attorneys, come in. We will draft the necessary agreement based on the particular facts of the transaction. No pre-printed agreement full of unnecessary or onerous terms. A client specific agreement to protect you from the start together with legal advice before you sign. All included in our professional fee agreed upon upfront.
“A professional agent has access to an existing ‘book’ of buyers and to referrals from other branches”. Correct. But so do we. As real estate attorneys we have built up a database of buyers and sellers, whom have been our clients over the last 20 years. And we will also list your property on the most effective marketing tool currently out there – the large internet property portals – that we have access to. We estimate that more than 80% of interest in a property for sale comes from prospective buyers who identified the property on the internet.
We will also interact with select estate agents when we are instructed to do so, to assist with the marketing of your property, at no additional cost to you. But we control the interaction and ensure that you are not inundated by all and sundry.
“Inexperience in negotiation (skills to get the best price or close the deal)”. Attorneys are trained in negotiation and we will attend to this aspect if instructed to do so.
What successful private sellers have to say
Sell Property Privately – Estimates of properties sold privately in America range from 15% to 25%, and are growing. There are no published statistics on SA sales but it would seem that the number of successful private sellers could be between 5% and 10% of all properties sold and also growing.
Some of their advice:
- Advertise widely on the internet portals
- Use social media
- Put up a ‘For Sale’ sign outside your house
- Have show-days
- Use a real estate attorney from the start
At Neil Parker Attorneys we can do all of this for you as well as attend to the paperwork and the conveyancing process, and the cost is all included in the once-off professional fee, which we agree upon upfront. And you dictate how involved you would like us to be.
The way forward for you.
You now have a choice. If you are a “serious” seller then you must consider the following:
An agent will do most of the work for you in selling your property but will charge a significant commission. If you choose the private seller route, together with an experienced real estate attorney like Neil Parker Attorneys (who, legally, can only represent you), you have all the tools necessary to facilitate the sale – the saving in monetary terms could be massive.