DIY Home sellers often live to regret their decision
Category Advice
There is in all probability no bigger mistake that a person wishing to sell his home can make, than to attempt to do it himself, without the help of an agent. This is the view of Rowan Alexander, Director of the Cape Town estate agency, Alexander Swart Property. He does NOT base his opinion on any feeling of resentment because firms such as his are not employed. Rather on the simple fact that all too often, those who go the Do-It-Yourself route end up regretting their decision to do so.
"The problem DIY sellers frequently experience, is that although they quite possibly know the true market value of their home and why it is a good property, they may be emotionally involved and inclined to act irrationally. As a result, they almost invariably lack the negotiating ability and detachment, which an accomplished estate agent has. In all likelihood the agent has been in this type of situation many times and knows how to get a deal that is fair to both seller and buyer - and to do it without ruffling feathers."
DIY protagonists, says Alexander, often make the big mistake of over-pricing their property-even when they know its market value fairly accurately. This may be due to their emotional involvement with the home and an understandable tendency to see it as better than it is. Often it is also due to the idea that they can then allow the potential buyer to beat the price down to what they wish to achieve. They fear that if they ask the market price at the outset they will be forced to reduce to a level lower than it should be. This fear is unjustified: today's buyers are shrewd and well-informed. They respect a seller, and his agent, if they set the right market-related price without dissimulation at the start.
"Estate agents in reputable companies like to be known for their transparency and straightforward dealing. Nothing is gained by setting a price that is too high - but the seller acting on his own, usually does not know this. At Alexander Swart we regularly sell homes at the asking price. We make it clear that while we are always willing to take offers well below the list price, they are almost certain to fail."
The man going it alone on his property sale, says Alexander, is also often not familiar with the whole concept of the time value of money. There are two aspects to this:
- Firstly and obviously, the quicker you sell your home, the less stress and disruption you will experience. A good agent will sell a property at the right price, faster than an amateur, thereby allowing the seller to move on expeditiously.
- Secondly and even more importantly, the cash savings of a quick sale will always be substantial. The seller will have fewer months to pay interest on his bond and will be faced with fewer maintenance costs, rates and taxes and insurance payments - all of which can eat into his eventual profit if his home "sticks" on the market. Furthermore, if he has partially or wholly paid off his bond, he will collect interest payments on the sale money he has received earlier than he might have expected. Taking as an example, a home seller paying R25 000 a month on a bond of R2,5million - if the sale transaction takes four months, he will pay almost R100 000 in bond repayments over that period and his other "extra" costs (as outlined above) might well come to R20 000. If, as is often the case, an astute agent completes the deal in two months, the seller will halve that outlay. DIY sellers however, often have protracted sales periods.
Alexander's final comment on this subject, is that when sellers DO agree to employ an agent, they frequently make the mistake of employing more than one. This he says results in the agents working for the buyers not the sellers, because they will be worried that their buyer's offer may be pre-empted by another agent with a mandate for the same home. Inevitably this will cause a lack of calm, cool negotiation and probably result in the home being sold for less than it should have.
Author: Independent Author
