Selling house yourself

Mr Bump

Some advise please,
I am putting my home up for sale in the next 5 days, I have had the house valued by 4 estate agents, also went over with each one what they where going to do for me in terms of selling it, not one of them could tell me anything they where going to do that I am not able to do, and for this they charge between 1-1.5% of the sale of the house,
I am thinking of selling it myself as I can advertise it, take the calls, do the viewings etc, this will save me approx 5k,
Am i missing something here with regards to the estate agents,??? I cant see why i should pay them 5k to do something I feel I can do??
Have any of you guys done this before??? is it better to use the estate agent and if so why?? or sell it yourself and save the 5k????

Bigcheeze

One thing you can't do is run any sort of bidding process. If people think some EA's are dishonest imagine making a bid to the owner and then the owner calls back an hour later saying someone else has bid 5k more. Even if the bid is genuine, an owner has zero credibility in this situation and the process is dead before it starts.

So you could negotiate with a single bidder but you're screwed if there's lots of interest in your house.

Also no one will pay you a booking deposit nor will they pay it to your solicitor.

People don't want to deal with the owner even if you know more about the property, the neighbors etc. they want to be able to say to the agent, this place is a kip etc, without someone emotionally involved being there.

Also EA's will often have a database of people registered with them who are interested in your type property. Particularly in settled Dublin areas.

2rkehij30qtza5

Just my tuppence worth but I think you are going to cut yourself out of a lot of potential buyers. I wouldn't buy unless from an estate agent but that's just me.

volauvent

I say go for it. If you are an assertive person it should be fine. I'd prefer not to deal with ea as are spoofers.

keith16

Bigcheeze wrote: »

One thing you can't do is run any sort of bidding process. If people think some EA's are dishonest imagine making a bid to the owner and then the owner calls back an hour later saying someone else has bid 5k more. Even if the bid is genuine, an owner has zero credibility in this situation and the process is dead before it starts.

Can you expand on this? Why would the owner care about their credibility if they have a genuine bid? If you know anything about negotiation, then you are more than capable of carrying out this part of the process....I'm not sure what you mean by the process being dead before it starts....if the seller is getting bids then surely the process is working

Bigcheeze wrote: »

So you could negotiate with a single bidder but you're screwed if there's lots of interest in your house.

Why would you be screwed? Surely this is the best situation for a seller to be in and maximise the sale value?

Bigcheeze wrote: »

Also no one will pay you a booking deposit nor will they pay it to your solicitor.

Why?

Bigcheeze wrote: »

People don't want to deal with the owner even if you know more about the property, the neighbors etc. they want to be able to say to the agent, this place is a kip etc, without someone emotionally involved being there.

Also EA's will often have a database of people registered with them who are interested in your type property. Particularly in settled Dublin areas.

There are plenty of people who don't want to deal with EA's either. There are plenty of ways to negotiate with a seller and even an EA without saying the "house is a kip", nobody will be interested in hearing that, private sellers and EAs alike.

Sure EA's have a database, but buyers and sellers also have this huge database called "the internet". Any leads and EA are practically meaningless when you can advertise your property to a huge audience for next to nothing.

And if you are a buyer and you are relying solely on an EA to sell you a property and don't use the internet, then you are seriously limiting yourself.

magicbastarder

keith16 wrote: »

Can you expand on this? Why would the owner care about their credibility if they have a genuine bid?

the 'if' is crucial here.
i would not even contemplate making a bid on a house if it was the owner controlling the bidding process (assuming a competitive bidding process)
@OP - you mention it might cost you 5k to go through an estate agent. so say your house is worth 300k, extrapolating from the percentages you've been quoted.
do you really think selling on your own will get you to within 5k of what an estate agent would get; they have access to customer databases, footfall and (yes) credibility you don't enjoy.

you'd save yourself 5k on fees, but you'd lose tens of thousands on the sale price.

keith16

magicbastarder wrote: »

the 'if' is crucial here.
i would not even contemplate making a bid on a house if it was the owner controlling the bidding process (assuming a competitive bidding process)

you'd save yourself 5k on fees, but you'd lose tens of thousands on the sale price.

Why not though? Sorry, not being smart, genuinely interested.

Depending on the situation, the seller has access to the house sale register and should know what similar houses in the area have sold for recently?

Can EA's really add tens of thousands to the value of a house?

magicbastarder

keith16 wrote: »

And if you are a buyer and you are relying solely on an EA to sell you a property and don't use the internet, then you are seriously limiting yourself.

people don't go to an estate agent and say 'sell me a property', though.
and the 'for sale by owner' market is so small that it's not worth the extra hassle and uncertainty pursuing it for most people.
from my experience, people generally look for houses on daft and myhome.ie, visit estate agents, and drive around the areas they are looking in, looking for for sale signs.

but the point is that you only need an estate agent to perform 1.5% better than you can to make it profitable to you. and they're (generally) much better at it than you are.

i'm not saying all estate agents are honest (and i could say a few things about some i know which would probably not last too long on a public forum), but selling a house yourself would be a prime example of penny wise, pound foolish.

magicbastarder

keith16 wrote: »

Can EA's really add tens of thousands to the value of a house?

i'd say so. the market has been sluggish, don't forget, with lots of uncertainty, so you can't necessarily point to a benchmark price which is a handy flag to wave.

i would say that if i saw a FSBO house, i'd be willing to make a bid on it, but once the owner started to ring me back with 'i have someone else who has bid 5k more than you', i'd bow out.

an estate agent would add value with bringing a bigger pool of potential customers, and some level of 'officiality' to the sale. yes, people don't trust estate agents, but some estate agents have better reputations than others, so that can be mitigated with careful selection of a good agent. with an owner, trust is a complete unknown.

magicbastarder

i should mention that in the last year, i have both sold a house and bought one. so i'm going by my own experiences and thoughts.
we had a few visits from estate agents when we were considering selling - one of them (a nationally known organisation) were so bad it was eye-opening - but they did not contradict what i'd heard about them.

keith16

magicbastarder wrote: »

i'd say so. the market has been sluggish, don't forget, with lots of uncertainty, so you can't necessarily point to a benchmark price which is a handy flag to wave.

i would say that if i saw a FSBO house, i'd be willing to make a bid on it, but once the owner started to ring me back with 'i have someone else who has bid 5k more than you', i'd bow out.

an estate agent would add value with bringing a bigger pool of potential customers, and some level of 'officiality' to the sale. yes, people don't trust estate agents, but some estate agents have better reputations than others, so that can be mitigated with careful selection of a good agent. with an owner, trust is a complete unknown.

As a buyer, however, that could work to your advantage. Would it not be worth entertaining them for a little while, as you say, final sale price could be 10s of thousand less were an EA involved?

magicbastarder

that is one potential advantage, yes.
but not good for the OP.

when we were looking, i don't recall seeing a single FSBO property around the areas we were looking in.

one thing worth mentioning; when we were selling, there was a half percent difference between the charges of the most expensive and least expensive estate agents (the least expensive were actively advertising themselves as a low cost solution). sounds fine, but the commission works out at €1000 cheaper per €200,000 sale price; and they didn't seem to offer as good a service. so don't jump at the cheap option simply because it's cheap.

Mr Bump

I have had 4 EAs out, none of them give me anything better then we will charge you for putting it up on Myhome.ie & Daft, etc, I can do this, ie blast it all over the internet (only thing i cant do is get the house on Myhome.ie as it is for EAs),
With regards to the price, well its simple i will look for the max, and if a good offer comes in i either say yes I accept of no I want 5k more, when the price is agreed the purchasing person pays deposit to my solicitor, and the process starts,

The reason for me asking the question is, "I see it as that simple", and save 5k, if I get an EA to do it I can tell myself i got more and it paid for the EA fees, but to me that makes no sence, what ever I get for the house will be the price, I will not sell it any lower then what i am looking for so weather its me or the EA in my mind its 5k,

Last week my friend had a viewing on his house, he was in the house at the time and the guy viewing it with his wife pulled my fiend aside and gave his number and said cal me, he said I would rather deal with the seller then the EA, thats what got me thinking, also I know the guy was thinking I will get it cheaper or at least share the cost of the EA, so why not sell it yourself in the first place,

All the comments are very valid, after reading them all, I still at present cant see why I sould not sell it myself,

P. Breathnach

magicbastarder wrote: »

...
i would not even contemplate making a bid on a house if it was the owner controlling the bidding process (assuming a competitive bidding process)...

I don't get this. The owner does control the process, even when working through an EA.

When there is an EA involved, there is some scope for a game of "good cop, bad cop". The EA can seem to side with a potential buyer, saying things like "I agree that your offer is good, but I can't convince the vendor that it is good enough. I'm pretty sure that if you could find another €5k, I could push the deal through.". In effect, the purchaser is playing a game of bluff with two opponents, even if the EA purports to speak for both.

Personally, I would also give some weight to the amount of foot-slogging a good EA puts in.

ted1

Do you work in sales?
Have you experience extracting more money out of people? This is what they offer, the ability to have no dignity and getting money out of people.

Here's an analogy, 2 garages in the same road selling the same cars, one is successful one isn't. That is down to the individual salesman

keith16

ted1 wrote: »

Do you work in sales?
Have you experience extracting more money out of people? This is what they offer, the ability to have no dignity and getting money out of people.

Here's an analogy, 2 garages in the same road selling the same cars, one is successful one isn't. That is down to the individual salesman

Yeah, that means both the buyer and the seller in this case. Often, EAs will sell based on what's acceptable to them, and not the home-owner.

The garage analogy doesn't work as they are selling the cars themselves, not on behalf of someone.

ted1

keith16 wrote: »

Yeah, that means both the buyer and the seller in this case. Often, EAs will sell based on what's acceptable to them, and not the home-owner.

The garage analogy doesn't work as they are selling the cars themselves, not on behalf of someone.

Comission based so higher sale price higher comission

keith16

ted1 wrote: »

Comission based so higher sale price higher comission

Not at the expense of a long lead time. There is an opportunity cost here too. Sure the EA could hold out for longer for a higer price but why would they? The cost involved in keeping the house on their books for a longer time means the additional returns of a higher sale price are diminished.

It's in their interest to get it off the books quickly, it's not always in the interest of the seller to sell quickly however.

Bigcheeze

keith16 wrote: »

Can you expand on this? Why would the owner care about their credibility if they have a genuine bid? If you know anything about negotiation, then you are more than capable of carrying out this part of the process....I'm not sure what you mean by the process being dead before it starts....if the seller is getting bids then surely the process is working

I'll try and clarify what I mean. Put yourself in the position of being the bidder. Say there are no offers and you offer 200k to the owner. The owner says let me think about it and calls back an hour later saying someone else has bid 205k. What do you do now ? Is this a real bid or negotiation ?

You could say an EA could do the same but 5k in price to an EA is 50 quid in commission but its 5k to the owner running the process. In summary, the owner has massive incentive to use phantom bids. The only real incentive an EA has to use phantom bids is to get the price to somewhere where the seller will consider. The incentive for the EA is to get a sale closed because thats when he gets paid.

Bigcheeze

keith16 wrote: »

It's in their interest to get it off the books quickly, it's not always in the interest of the seller to sell quickly however.

Depends on what you mean by quick. If there aren't offers within 6 weeks the EA has probably over valued the property. (at least in the parts of the market where there is some activity)

Bigcheeze

Mr Bump wrote: »

Last week my friend had a viewing on his house, he was in the house at the time and the guy viewing it with his wife pulled my fiend aside and gave his number and said cal me, he said I would rather deal with the seller then the EA,

That would ring alarm bells for me to be honest. I'd immediately be thinking this is some sort of messer.

Mr Bump

Bigcheeze wrote: »

That would ring alarm bells for me to be honest. I'd immediately be thinking this is some sort of messer.

It all seemed fine, my mate called the guy, he put in a good offer, it was not accepted, he came back with another offer (10k short of where my mate wanted it), so the couple have asked to come back again and view the house and have a chat, so it is working for my mate, if the offer goes up another 5k he will take it,

P. Breathnach

Mr Bump wrote: »

It all seemed fine, my mate called the guy, he put in a good offer, it was not accepted, he came back with another offer (10k short of where my mate wanted it), so the couple have asked to come back again and view the house and have a chat, so it is working for my mate, if the offer goes up another 5k he will take it,

So the EA did the work of finding a purchaser, and is now trying to cut the EA out of the deal and avoid paying the fees due. Put simply, that's fraud.

true

ted1 wrote: »

Here's an analogy, 2 garages in the same road selling the same cars, one is successful one isn't. That is down to the individual salesman

It could be down to lots of things...I bet the more successful of the two garage-owners would not waste money foolishly on paying another salesman 5k commission on every item he/she sold.

I know one house recently which was almost sold, but the estate agent concerned sold the potential buyer a slightly more expensive property ( belonging to a friend of the estate agent ) and convinced the buyer it was a better buy. Anyone who gives a property to an estate agent to sell is throwing away money.

Mr Bump

P. Breathnach wrote: »

So the EA did the work of finding a purchaser, and is now trying to cut the EA out of the deal and avoid paying the fees due. Put simply, that's fraud.

Yep i dont disagree with you,

Lyn256

As a buyer, I'd be delighted to see a house that I wanted 'for sale by owner' because I'm confident that I could get them to sell it to me for less than I'd have to pay an estate agent
(I've 15 years sales experience and am a reasonable negotiator and if I feel that the seller was a Joe Soap-I'm confident that I could sell the idea to them that I would be a better buyer-unless there was a LOT of interest in it)

I'm not a fan of EA's but a good one will def get you more for your house than selling it yourself unless you (seller) have strong sales, communication and negotiation skills

As another poster said . . . save a 2/3k on EA but cost yourself 10/15k by not being able sell and negotiate . . . .

magicbastarder

not that i know anything about what 'rules' estate agents work under, but i'd be very surprised if an estate agent would be comfortable with the seller attending a viewing.

plus, the seller in the above instance is running a big risk of the estate agent finding out the sale went through behind his/her back - if they introduced the buyer to the property, they are legally entitled to their fees, and there are numerous precedents set for this.

magicbastarder

true wrote: »

Anyone who gives a property to an estate agent to sell is throwing away money.

yes, you're going to hear stories about dodgy estate agents. which makes picking a good one important, but it comes down to this fact - to be worthwhile to you, you've to get within 1.5% of someone whose job it is to sell houses, and has greater resources to draw on than you, and will be trusted more than you. and whom people come to looking to buy a house.

btw, can someone confirm that you can only list on myhome if you're an estate agent?

StillWaters

As a buyer I would be very reluctant to hand €5k deposit over to a Joe soap who is not regulated at all. I would steer clear of any house for sale by owner. I would think if they are scrimping on this, what other corners have they cut?

true

StillWaters wrote: »

As a buyer I would be very reluctant to hand €5k deposit over to a Joe soap who is not regulated at all.

you would hand it to the solicitor / let your solicitor deal with the sellers solicitor for the conveyancing etc of the property.

15 and 25 and 35 years ago people went through travel agents to buy airline tickets. Travel agents took a percentage, just as estate agents do. Now many if not most people deal direct with the airline. The internet has made many people confident about buying and selling - think of donedeal, ebay, adverts etc. There is more transparency in buying and selling direct - thats why its increasing. Online websites means both buyers and sellers know what properties cost.

Geuze

Mr Bump wrote: »

Some advise please,
I am putting my home up for sale in the next 5 days, I have had the house valued by 4 estate agents, also went over with each one what they where going to do for me in terms of selling it, not one of them could tell me anything they where going to do that I am not able to do, and for this they charge between 1-1.5% of the sale of the house,
I am thinking of selling it myself as I can advertise it, take the calls, do the viewings etc, this will save me approx 5k,
Am i missing something here with regards to the estate agents,??? I cant see why i should pay them 5k to do something I feel I can do??
Have any of you guys done this before??? is it better to use the estate agent and if so why?? or sell it yourself and save the 5k????

The mere fact that estate agents have existed for decades indicates that they can add value and do more............


...sure if they couldn't, then nobody would hire them..............




................ but people do hire them, every day, so they must add value.

QED.

RATM

Interesting discussion, I can see the pros and cons of both sides.

One thing I think there might be a market for is a kind of a halfway house. From a buyers perspective the biggest complaint about EA's seems to be them not returning calls, sometimes not showing up at the right times for viewings, etc. Basically not doing their job which isn't good for sellers either.

I think if an estate agent offered a service whereby they advertise the house AND they deal with the negotiations but the vendor showed the house to buyers then that might get some traction.

For one showing houses is a time consuming thing to be doing. Some houses might have 20 or 30 viewings before offers come in. Serious buyers will insist on a second viewing and even some will want a third if they've two ideal places in mind and want to separate them.

So if they owner actually showed the buyers the house that would save EA's a hell a lot of their time from their working day. The vendor still gets the benefit of the EA's advertising power and the benefit of an intermediatary to negotiate price.

Of course EA's would have to offer such a service at a lower % commission than they currently do. But if it means they get €1000 less for selling a house but save themselves 40 or 50 hours showing the thing then that may well be worth their while.

magicbastarder

true wrote: »

15 and 25 and 35 years ago people went through travel agents to buy airline tickets. Travel agents took a percentage, just as estate agents do. Now many if not most people deal direct with the airline. The internet has made many people confident about buying and selling - think of donedeal, ebay, adverts etc. There is more transparency in buying and selling direct - thats why its increasing. Online websites means both buyers and sellers know what properties cost.

but a house costs 1000 times as much as an airline ticket. and there are far more legal ramifications to buying a house; plus, your analogy falls down on a second point in that when you buy an airline ticket direct, the company you are buying from is a known quantity.

to make your analogy closer to the debate at hand, you'd be going to a completely unknown website to buy a ticket. or paying some guy you met in a pub for a flight to alicante.

68Murph68

I think if you're reasonably intelligent there is little to no benefit in using an estate agent.

Due to the way commission works,estate state agents have little to no interest in getting the best price for your house, they just want to get it sold.

Suppose you are selling a house.
You agree a 1.5% commission with the EA.
An initial offer comes in of €280,000
In this case the estate agent will pick up €4,200.
What incentive is there for the estate agent to put in more work to get the price up to €290,000. They would only receive an extra €150 in this case but the seller would receive €9,850. How much extra work is the estate agent likely to put in?

Ask yourself what determines what price you will get for the house?

In my opinion the number one factor is the number of seriously interested parties with the actual finances to be able to pay the price you want for the house.

I really doubt the vast majority of estate agents will be able to affect this key factor all that much.

Irish estate agents have a very poor reputation in terms of honesty and in terms of customer service.

I would advise anyone selling their own home to do as much research as possible on the process. Also if you have friends/family ask them for their opinion. Ask them to be brutally honest and tell them you want to know what's wrong with your property/your valuation/your strategy.

If you are considering using an estate agent
Ask the estate agents exactly what they provide for their fee in terms of their services. what do they do? how many viewings will they conduct?
Ask them why they will get the best price for you.
Ask them what they provide that you can't do yourself.
Ask them why you should choose them as opposed to the EA down the street.

Also - you will definitely have to pay a solicitor. I would say get as much bang for your buck out of your solicitor. If you can get one who has a track record of dealing with the property side of things this would be a big advantage.

Selling your own home isn't for everyone, but its definitely do-able. I know of a few people who have done it and none of them has any major regrets.

P. Breathnach

68Murph68 wrote: »

...
What incentive is there for the estate agent to put in more work to get the price up to €290,000....

1. Professional pride (the better EAs have some).
2. Over a good number of transactions, the bits of additional commission add up.
3. Reputation - that's what brings in clients.

true

now some apartments and properties are the same price as a prestige car or jeep. You can get a house or apartrment in many parts of the country for 40 - 50 or 60k. If you were selling a nearly new X5 jeep or Audi A6 would you risk letting an estate agent type try to advertise it on donedeal for you ( as opposed to daft.ie ) and handle all the negotiations? More than a few estate agents just want to sell the properties, and mark "sold" on them. More than a few have been found or suspected of doing deals to help their friends or relatives etc. I'd trust a secondhand car salesman before an estate agent, going by personal experience.

magicbastarder

i once called an estate agent a '****ing crook' on the phone to him, and tried to make a complaint to the IAVI about him (this was about ten years ago); but the IAVI seemed a bit perplexed about how to deal with the call. he was an absolute gangster who was trying to screw me out of money.
but that said, i decided to sell my house through a reputable estate agent, and am happy i did so.

RATM

68Murph68 wrote: »

I think if you're reasonably intelligent there is little to no benefit in using an estate agent.

Due to the way commission works,estate state agents have little to no interest in getting the best price for your house, they just want to get it sold.

Suppose you are selling a house.
You agree a 1.5% commission with the EA.
An initial offer comes in of €280,000
In this case the estate agent will pick up €4,200.
What incentive is there for the estate agent to put in more work to get the price up to €290,000. They would only receive an extra €150 in this case but the seller would receive €9,850. How much extra work is the estate agent likely to put in?

The authors of Freakonomics wrote a whole chapter on why estate agents own houses sell for more than the market average and explained much of this off in the same way you have done.

There is a simple way around it really but it is up to the vendor to introduce it to the contract.

Lets say the EA values the house at €300k and the vendor agrees with that valuation and would be happy to achieve that price. So you draw up a contract that pays the EA 1.5% for achieving €300k. But then you put a bonus scheme into the contract to incentivise him to out perform the market and get you a higher price. So you could say that for every euro he achieves you over €305k you will pay him a 10% commission. That alone incentivises him to get you an extra €5k and it doesn't cost you anything extra over the agreed 1.5%. But if he achieves you €315k then the agent stands to gain an extra €1000. So his commission structure would look like this:-

Total Sale price €315k
€305k @ 1.5% = €4575
€10k @ 10% = €1000

Total €5575

The extra €1000 bonus represents around an extra 17% fee on what he would have got if it was just a flat 1.5%. So the agent is incentivised to try to push your house to €315k as to him personally it is worth an extra €1000 whereas under the 1.5% structure all he would have gotten out of it is an extra €225, making it not worth his while.

There is nothing stopping vendors putting conditions like that into contracts with EA's. The EA's who know their game and who are good salesmen will be attracted by such a bonus scheme. The ones who are lazy and know they aren't good at sales will be repulsed by it. Which in itself is a good way of separating the wheat from the chaff, it helps to filter the bad agents out before the process has even begun.

Mr Bump

All, thanks for all your imput, very interesting comments / views, just an upate from me, I have let to word out in the area that I am selling, I have not even put the house on the net yet, I have 3 viewings this week already, I have told them what i am looking for, (15% more then what I will accept for it), so lets watch this space,

RATM

Best of luck with it Mr.Bump, hope it goes well for you

magicbastarder

worth noting that the market in dublin is a bit manic for 3 and 4 bed houses in well established areas; when we were looking (september last year), we were at an open viewing where there were 25 people in the house at one point - and a friend was recently at one with close to 100 people attending.