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  Reply # 1566032 5-Jun-2016 13:47
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Successfully sold my own home 2 years ago, using the strategy of sharing the commission and thus made $15000 more than I would have if using an agent to get the price I asked for. We did take a few months to do so, mainly because it was quite rural and a little known area with few footfalls.

The lawyer fees covered the contract writing and checking.
Most buyers get their own builders report, so there is no comeback on you for something you didn't know about being found out later.
I was always upfront about the 'uncertified' sleepout and some other building quirks, most of which the buyer felt added value to my property.

One Caution though, if you sign a contract that later falls though (building and finance are standard clauses) the lawyer adds each one to your running total of lawyer fees. (😡) as if seeing you both signed the document HE drew up needs an hour each time??

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  Reply # 1566033 5-Jun-2016 13:54
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Jaxson:

 

I think it pays to study this with a clear head.

 

 

 

On a standard house sale you're talking what 6%? of the sale price to the agent.  Depending on house values, that's in the range of $10,000 - $30,000 or so?

 

 

 

What is it that agents are bringing to you, what are you paying for?  Essentially its connecting you with the buyers through advertising/marketing, and with buyers who are not prepared to buy direct (and many are not, assuming some sort of guarantee from purchasing via an agent).

 

You are still paying for the legal fees regardless, they are simply connecting with the buyers and getting them to your property.

 

 

 

Basically, the question is, is that worth it for you?  In times where there is a lot of competition in the market, you'd probably do ok trying to sell yourself.  Ideally you want a multiple offer situation to drive buyers into a frenzy, and potentially agents can do that more if they have lots of buyers coming to them.  They'd obviously need to generate more than their sales commission for you to be better off than taking a lower offer yourself.  I think that's where the private sell can work well, if you're not greedy.  If you meet buyers half way into the agents commission, they pay less and you earn more, than if an agent was used. 

(As an aside... Watch out for ones who offer more than the valuation of your property, and who need finance to complete the deal, as the bank will only lend the lower of the offer and the valuation.

 

 

 

I'm amazed at the number of people who would freak out at the notion of spending $5,000 on advertising, yet are happy to pay $20,000 in commission to an agent?!

 

 

I think 3.6% is about normal. There are 1% agents but they will sell no matter what the price is.

 

If the house is straight, signed, you advertise, as stated previously, and if you get a few interested, you can see where the price lays. In ChCh at least auctions are the choice.W sold our other like that. To sell the second other, I'll get a sign made, see what happens. Many here are prove sale by treaty, or deadline sale, which is in effect a blind auction. I'd rather sell as a taking offers. Thats way you can let others know and they van counter offer or not.  

 

Open home? Take an iPad and a flask of coffee for two hours


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  Reply # 1566061 5-Jun-2016 15:39
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Geese: Presumably if using an agent in same circumstance the buck stops with the agent?

 

No, the buck always stops with you unless it can be proved the agent was negligent or deceptive. It's up to you to inform the agent of everything to do with the house, although by the time you have a face-to-face with them they should have done some research and know a reasonable amount anyway.

 

Dairyxox: Any half decent property lawyer should be able to guide you through any potential cross lease issues. 

 

QFT.


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  Reply # 1566114 5-Jun-2016 17:43
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With no particular love of agents, if you sell yourself, are you confident that you got the best price you could to offset the saving in agents fees?

 

In some locations sure you can, but AKL not so much......

 

 





Mark Ascroft
Wellington




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  Reply # 1566308 6-Jun-2016 10:39
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MikeB4:

if you are going to sell yourself wait until other houses in the street are put up for sale and put your own sign on your property especially when there are open days.



There are 2 houses on the street for sale already (out of ~40 houses), and when I moved in the agent never took their sign down (nor put a SOLD sticker on it), so I just left it there. 4 months later they haven't approached me to say "hey we had someone enquiring about your house but see its not listed with us, would you like to sell it?", so I'm guessing being at end of dead end street there is not enough traffic to worry about a sign.



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  Reply # 1566326 6-Jun-2016 10:43
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eracode:

Have to agree with timmmay. I dislike the real estate agent 'profession' with a passion. To paraphrase a well-known quote: Never in the history of selling was so much paid by so many to so few who did very little.


 



In my experience, without an exception, every agent when I've been buying or selling, or renting, has just been SO tired its not funny. Houses sell themselves really, and I've found agents I've dealt with have been pretty lazy as it comes so easy to them. Not saying ALL of them are, just the dozen I've dealt with.



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  Reply # 1566337 6-Jun-2016 10:54
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PhantomNVD: One Caution though, if you sign a contract that later falls though (building and finance are standard clauses) the lawyer adds each one to your running total of lawyer fees. (😡) as if seeing you both signed the document HE drew up needs an hour each time??


This here is probably my greatest problem, and what I was alluding to in the first post. There is nothing I am aware untoward about the house, its unmodified from new, however I purchased without a LIM and building report, so who knows what they may reveal which may scare off a potential buyer. Might get a string of tyre kickers racking me up a big legal bill.



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  Reply # 1566345 6-Jun-2016 11:11
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Jaxson: What is it that agents are bringing to you, what are you paying for? They'd obviously need to generate more than their sales commission for you to be better off than taking a lower offer yourself.

I think that's where the private sell can work well, if you're not greedy

As an aside... Watch out for ones who offer more than the valuation of your property, and who need finance to complete the deal, as the bank will only lend the lower of the offer and the valuation.


According to QV, houses in my suburb have increased in median value 8% in last 8 months since I purchased, therefore I'd expect to come out better off than I went in. If I use an agent, as long as their fees and lawyers fees mean I get back what I put in then I'll be happy.

But most people will need a mortgage, and my offer was made before a valuation was completed, and I was taken aback when valuation was a lot lower and bank said I'd have to "top up" with 100% my money above valuation to the offer amount.

That could be another +1 for agent over lawyer, as there may be a few who make an offer that later falls through as they don't have the cash to meet the mortgage shortfall.

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  Reply # 1566400 6-Jun-2016 11:48
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Conversely, they're just as likely to do so through an agent, so the lawyer fees will be the same, as will the risk of "tyre kickers" so again, unless you think the agent can upswell the house beyond their fee, you may as well make that $20,000 by doing it yourself.

Ask yourself, how long will it take to pay off that $20,000 more on my next Morgage, factor in compounding interest, and you're likely looking at a years worth of Morgage payments save by doing this yourself?

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  Reply # 1566404 6-Jun-2016 11:54
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Geese: 10 years ago I bought a section and listed it on trademe and promptly sold it. Was very very easy process, lawyers fees weren't even very high.

In 4 week's I'm going to list my house for sale. I could list on trademe, communicate with potential buyers, facilitate people seeing the house, but am guessing surely there is more to what an agent does to justify their fees?

The house is a cross lease and my main concern is I want the sale to be a done deal, without worry that a buyer will come back at me, for things they may find out that I'm unaware of. Presumably if using an agent in same circumstance the buck stops with the agent?

 

 

 

No, the buck does NOT stop with the agent, never has.

 

When you use an agent you sign an agreement with them absolving them of any liability anyway. 

 

The sales and purchase agreement is the one the Auckland Law Society created, you can get a copy from your lawyer for $20 or so. Mine gave me a copy for free.

 

The only time an agent can be held liable is if they deliberately misrepresent a property/who the buyers are/etc and even then the punishment is much less than the reward.

 

You as the seller have a legal obligation to disclose anything that may influence the sale, e.g. is a preschool going in next door, has there been a murder, chemical spills, flooding, zoning changes, undocumented extensions (building, sewerage, electrical, etc), subsidence , etc etc etc.

 

 

 

Buyers/sellers are no more protected by using an agent.

 

Real estate agents are the least qualified of anyone in the sale/purchase chain (lawyers, building inspectors, engineers, etc) but they take the largest fee by far

 

and when properties go up by 20% so do their incomes.


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  Reply # 1570713 12-Jun-2016 20:56
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eracode:

 

Have to agree with timmmay. I dislike the real estate agent 'profession' with a passion. To paraphrase a well-known quote: Never in the history of selling was so much paid by so many to so few who did very little.

 

 

 

 

 

 

This sort of thing is why:

 

http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=11654526

 

 


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  Reply # 1570761 12-Jun-2016 22:59
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The most compelling reason I have heard for agents not being particulary concerned about getting you the best price is shown in the maths below.

If you sell your house with an agent with a fee of 3.5% for $800k they make $28,000.

If the agent manages to get you an extra $50k (ie. House sells for $850k) the agent gets $29,750.

If we make the assumption that the extra money takes an extra six weeks of open homes and dealing with buyers, would it not be easier to concentrate on the next $800k sale than earning the extra $1750?

Of course even better is to lower the expectations of the seller so they think they were lucky to get $800k.

Jon

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  Reply # 1570774 13-Jun-2016 00:10
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jonherries: The most compelling reason I have heard for agents not being particulary concerned about getting you the best price is shown in the maths below.

If you sell your house with an agent with a fee of 3.5% for $800k they make $28,000.

If the agent manages to get you an extra $50k (ie. House sells for $850k) the agent gets $29,750.

If we make the assumption that the extra money takes an extra six weeks of open homes and dealing with buyers, would it not be easier to concentrate on the next $800k sale than earning the extra $1750?

Of course even better is to lower the expectations of the seller so they think they were lucky to get $800k.

Jon

 

Absolutely spot on, IMO, and one of my main reasons for my 'dislike with passion' comment earlier.

 

Their MO is "build up the owners' expectations until they've given us the agency, then quickly lower those expectations, sell the property asap and move on to the next one" - as you say.

 

Agents' commissions should be structured so that the more they sell the house for, the greater the fee they get - to give them incentive to get the max price. If they were going to sell my house for $800k and were set to get a fee of, say, 3%, I'd be happy to give them 3.1% of $810k. It's all FUBAR as it's currently structured.

 

Another main reason for my dislike is that the commissions are just too high for what they do. The 3% and 3.1% in my example above should be half those rates.


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  Reply # 1570793 13-Jun-2016 04:42
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jonherries: The most compelling reason I have heard for agents not being particulary concerned about getting you the best price is shown in the maths below.

If you sell your house with an agent with a fee of 3.5% for $800k they make $28,000.

If the agent manages to get you an extra $50k (ie. House sells for $850k) the agent gets $29,750.

If we make the assumption that the extra money takes an extra six weeks of open homes and dealing with buyers, would it not be easier to concentrate on the next $800k sale than earning the extra $1750?

Of course even better is to lower the expectations of the seller so they think they were lucky to get $800k.

Jon

 

Same logic but looked at the other way round: Let's say the agent says they will get you $800k for your house. You think that's a pretty good price so you sign them up with commission at , say, 3%.

 

They then start to lower your expectations and after a couple of weeks they come to you with an offer of $780k saying "this is what the market thinks your house is worth" and they put pressure on you to accept the offer.

 

At this point their commission is going to notionally reduce by only $600 from $24,000 (on the 'promised' $800k) to $23,400. You're taking an after-commission hit of $19,400. Small drop for the agent, pain for the vendor.

 

And who knows what they say to the potential buyer: "These people are looking for $800k but will probably accept $780k if you offer it".?

 

So if the agent can get you to accept, it's no real skin off their nose and they go on quickly to the next one. Big incentive for them to get you to accept any old lower price.

 

Maybe cynical on my part but the incentive is there for them to act that way. I don't put any weight on the 'ethics' of the 'profession'. The Real Estate Agents Authority is there only to catch the obvious bad eggs, not to correct systemic weakness.


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  Reply # 1570798 13-Jun-2016 06:19
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Jaxson:

I think it pays to study this with a clear head.


 


On a standard house sale you're talking what 6%? of the sale price to the agent.  Depending on house values, that's in the range of $10,000 - $30,000 or so?


 


What is it that agents are bringing to you, what are you paying for?  Essentially its connecting you with the buyers through advertising/marketing, and with buyers who are not prepared to buy direct (and many are not, assuming some sort of guarantee from purchasing via an agent).


You are still paying for the legal fees regardless, they are simply connecting with the buyers and getting them to your property.


 


Basically, the question is, is that worth it for you?  In times where there is a lot of competition in the market, you'd probably do ok trying to sell yourself.  Ideally you want a multiple offer situation to drive buyers into a frenzy, and potentially agents can do that more if they have lots of buyers coming to them.  They'd obviously need to generate more than their sales commission for you to be better off than taking a lower offer yourself.  I think that's where the private sell can work well, if you're not greedy.  If you meet buyers half way into the agents commission, they pay less and you earn more, than if an agent was used. 

(As an aside... Watch out for ones who offer more than the valuation of your property, and who need finance to complete the deal, as the bank will only lend the lower of the offer and the valuation.


 


I'm amazed at the number of people who would freak out at the notion of spending $5,000 on advertising, yet are happy to pay $20,000 in commission to an agent?!



Which valuation do the banks look at, the GV or do they still require the buyer to get a new one?

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