The Advantages And Disadvantages Of Selling Property Privately
There used to be a time when the natural step for buying or selling a property would involve approaching an estate agent. That was yesterday and today’s a different day. Today there’s a new generation of internet entrepreneurs making it increasingly easy for vendors and buyers to go down the private path. As more and more people are advertising private sales, where do you think people will start to look for property if they’re not displayed on the shop fronts?
So what is a private sale? It’s basically a process of selling a property without the middleman- the estate agent. As a buyer, you would deal directly with the vendor and vice versa.
Advantages of selling privately
Saving your pennies
Cutting costs. That’s without a doubt the main reason why people are starting to sell privately. An estate agent charges an average of 2% of the property sale price; you can put a private advert on a website for £100. If you sell a property at £200,000, that’s a saving of £3900. Sounds great, doesn’t it?
Void of Multiple agency agreements
If you work with multiple estate agents it would constitute as a “Joint Sole Agency” or “Multiple Agency” agreement and you would have to pay both parties regardless of who finds your buyer. That does not apply with private sales. You can advertise your property on every private sale website that exists if you like, even as pointless as it may be.
The prevention of funding a snake-oil estate agent
A lot of estate agents exploited the market during the property boom. Their costs went up drastically, yet their service didn’t necessarily get any better. In fact, it probably got worse because they were spoilt with buyers. Houses cost so much more than they did a decade ago, so while the commission has rocketed, the amount of work involved in selling a house has not increased by nearly the same amount. So on the basis of personal satisfaction, not handing over your cash to an estate agent is a major advantage as far as I’m concerned.
Nothing gets lost in translation if you deal direct with the potential buyers. Heaven forbid, I’m not saying that estate agents twist the truth or forget vital pieces of information, almost as if it fell out of their head. I’m just saying there is less chance of confusion because the element of Chinese whispers is taken out of the equation.
Moreover, you have the advantage of being able to judge for yourself on how serious the buyers seem.
I essentially see Estate Agents as PA’s for both the vendor and buyer, hence they’re meant to make the process of buying/selling property easier. But do they actually make it an easier process? Debatable. But I think not. Don’t get me wrong, I’m not taking away their worth, I’m just saying I think as a vendor I would find it easier talking directly to the buyer as opposed to talking through a middleman. As for the lead generation, that’s what the private sale websites are for.
Lack of pressure
Estate agents want a sale, and that’s usually at any cost. The quicker they process a sale, the quicker they’ll get their commission. So it’s no surprise that a lot of estate agents will try applying pressure to a vendor so they accept a less than ideal offer. Go privately and you’ll only be dealing with your own greedy little conscience.
Disadvantages of selling privately
Lack of experience
Unless you’ve sold a property privately before, you may actually slowdown the process of selling a property due to ignorance and naivety. Estate agents sell properties every day, so they know the process inside and out.
Issues such as Home Information Packs and the general process of selling a property may too much for a vendor with no experience of selling privately.
You need a certain edge
By eradicating an estate agent from the equation, you essentially become the salesman. Dare I say it, but estate agents have quirky personalities, and they know how to communicate- their facade is their most valuable asset. Without a decent frontage, you’re not going to sell candy to a kid, let alone an igloo to an Eskimo. So if you don’t have the gift of the gob, you may find the process of dealing directly with a buyer difficult. Hey, don’t get me wrong, I’m not saying it’s a bad thing that you don’t have the personality of an estate agent. The actual disadvantage is that you need a certain characteristic that an estate agent beholds. Scary.
Estate agents still pull in the punters
The private market is not at the same strength as using estate agents right now, consequently the masses at large are still using estate agents, so a private sale may take that little bit longer. But if you’re not in a rush to sell, you may continue counting the pennies you saved by selling privately.
You become the tour guide
It doesn’t matter how you sell your house, the potential buyers still want to view the property, unless you’re fortunate enough to land yourself with an insane buyer. I don’t know about you, but the thought of giving random people tours around my property seems, well, so boring. Plus, estate agents are good at making dingy little rooms sound so beautiful; I was never good at the bullshitting.
I’m going to keep it simple. If you’re not in any immediate rush to sell a property, I would recommend going private. Estate agents are out of fashion like the name Henry.
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