Beware trying the DIY route when it comes to selling

In these more difficult economic times sellers of homes will be tempted to go the do-it-yourself route and save on agent’s commission – but, says Lanice Steward, MD of Anne Porter Knight Frank, all her experience in property indicates that this can be disastrous.

“There is a considerable propaganda now in favour of going it alone with the help of private seller organisations and a perception in some circles that using them will result in a better price. I must say categorically that this perception is based on misunderstandings of the role of the estate agent and in every case that I have come across stems from ignorance of what the agent does and a lack of appreciation of what he or she can bring to the negotiation and sale process. It always amazes me that people who would never dream of trying to dispense with a doctor to diagnose or treat their own ailments or with a mechanic to service their motorcars somehow or other persuade themselves that they are qualified to market and sell their largest asset.”

DIY home sellers, said Steward, often begin their pricing/valuation investigations by visiting show houses in their region. Those, she said, will almost always be overpriced but without the relevant data to assess their real value in the current market, the seller all too often then follows the trend and overprices – or, in exceptional circumstances, under-prices (because one or two nearby homes have been wrongly priced).

Very occasionally, said Steward, the DIY seller “gets lucky” and finds a buyer who puts in a high price.

Far more often, however, they find that

  • · their DIY advertising costs are high and eat up their assets;
  • · the possible buyers haggle and attempt to downgrade their price by pointing out drawbacks and defects;
  • · the emotional strain of looking after people tramping through and criticising their home wears them down;
  • · many apparently serious buyers are in fact chancing it and know that their bonds will not be approved; and
  • · if and when they find a genuine buyer, they lack the legal and negotiating skills to get a good deal.

“Emotional flare-ups and painful silences often characterise the operation of a DIY seller,” said Steward.

On the other hand, said Steward, when an agent is from a reputable company and is trained, he or she will have at his disposal convincing market research which will enable him to justify and explain his valuation. He will also be emotionally detached and able to handle offensive, insensitive bargain hunters. He will be able, too, to benefit from participation in the agency’s large-volume advertising – and through his long association with the area, he will have a potential client list that will include many of those currently looking for property in that area, at that price, who may well have already been shown other homes on the agent’s list.

“Above all, perhaps,” said Steward, when the all-important negotiation process begins, the professional agent will recognise the pitfalls and traps to avoid and, when it comes to drawing up the offer and, later, the deed of sale, he will do this in a way that protects both parties from subsequent surprise or disappointment.”

Certain details in the deed of sale, said Steward, can be contentious.

Giving just one example, every deed of sale at APKF will, she said, include a list of all possible defects such as damp or a leak in the roof, which the buyer must acknowledge and accept in writing.

The agent will, if necessary, also arrange the beetle and electric certification. This type of extra documentation makes for a clean, satisfactory deal but is not available to DIY operators.

Then, too, says Steward, a good professional agent will work closely with selected bond originators to present the application to the bank in a way that will make it acceptable.

Once the deed of sale is signed, said Steward, the trained agent will continue to be involved, chasing up the legal conveyancers (and making sure they get the guarantees).

Steward also reminded aspiring DIY sellers that if they go it alone they will have to work through an attorney in drawing up the deed of sale, whereas in a “mature” agency this will be provided as part of the service, their documents being legally sound.

“The bottom line, therefore,” said Steward, “is that although on the face of it an agency commission may seem high, in reality it is not – and paying this money will almost always get you a better and sounder deal.”

Finally, added Steward, sellers must accept that buyers will almost always trust the agent of a big brand company, whereas they will be worried and distrustful of a DIY operator.

Article by: www.anneporter.co.za