Those who choose to sell their home privately should do so with their eyes wide open to the potential pitfalls that can arise.
“The seller must never allow himself to be tied down to one potential buyer and above all he should continue to market his property, even though he has to pay for advertising - had he used an agency, this would have been for their account.”
Tony Clarke, MD of Rawson Properties says there will always be one or two property sellers who, rightly or wrongly, think the commissions paid to estate agents are unjustifiable.
Such sellers will be tempted to go the DIY route and try to sell the property on their own, he says.
Without discussing whether this is a wise move or not, but assuming the seller does go it alone, Clarke has some words of advice for those choosing the private selling route.
He says the first piece of advice is to recognise that the private seller is targeting a different market.
“The buyer who goes to an estate agent recognises that he will probably have to pay a market related price and is possibly up against other buyers.”
The person who seeks out a private seller will quite often be a “shrewdy” – a bargain hunter, he says, and this type of buyer may start by trying to get the price down on the grounds that the seller is not paying commission.
This buyer, he adds will often think, probably rightly, that the private seller can be more easily “talked round” than an experienced agent.
Clarke warns that this buyer may well come armed with a portion of suspect market data, which the seller must be sufficiently clued up to be able to refute.
“Doing area research on prices is vital to the private seller’s success.”
Rawsons have proved time and again, says Clarke, that DIY sellers tend to end up agreeing to prices lower than an estate agent would have achieved for them, but certain sellers will always believe they will be able to negotiate a good price.
Although this may be difficult, the DIY seller must ascertain the financial position of the buyer: will he be able to get a bond and, if so, for how much?
A good agent, Clarke says will pre-qualify his buyers but it can be very hard for a private seller to do this as his questions may well be thought impertinent. Weeks can be lost while the buyer goes hunting for a bond, possibly with no success.
It is absolutely essential, therefore, that the seller keeps his options open throughout this period and continues to negotiate with other possible buyers, explains Clarke.
“The seller must never allow himself to be tied down to one potential buyer and above all he should continue to market his property, even though he has to pay for advertising - had he used an agency, this would have been for their account.”
Sellers often have the difficulty in showing their houses, says Clarke. “Without the discipline of working through an agent, potential buyers may turn up at any time of the day and may feel free to wander around and this can be a security risk.”
On show days all buyers inside the house should, says Clarke, be kept together and watched – call in the neighbours to help with this if need be – and all valuables should be locked away.
Clarke warns the polite buyer may refrain from expressing his doubts and misgivings for fear of offending the owner. The less polite, he adds will insult the owner and this could lead to all possibility of negotiations being taken forward ending forthwith.
In addition, Clarke says the seller should always remain conscious that the buyer, until contractually pegged down, can cancel his bond application and get out of a sale. He cautions that this happens regularly.
When it comes to drawing up the sale agreement, Clarke warns, the DIY seller has to negotiate a number of possible pitfalls. “If he is sensible he will employ an attorney, for which he will have to pay several thousand rand.”
By contrast, he says the estate agent will have the use of a tried and tested document - but either way, he must protect himself.
Clarke says there are a handful of private sales taking place in micro markets but the seller always needs to weigh up the costs of paying a professional agent against “doing it yourself”.