Selling a property can be an expensive exercise. Understandably, most people are working within a budget and are looking for ways to minimise costs. Undertaking a DIY sale by not using an Estate Agent is one way to cut costs but, as we explain below, this strategy might quickly turn out to be “penny wise, but pound foolish”.
Using an agent should achieve four critical things. It should;
- Increase the probability of achieving the highest possible price for your property.
- Shorten the time to receive and accept an offer on the property.
- Increase the probability of the transaction successfully completing after an offer is accepted.
- Take the “hassle” out of selling property.
Just how much weight an individual will attach to each of the above is situation specific. However, it is evident that the majority of sellers do see the benefits as according to data released by Zoopla, over 99% of sellers use an agent and here are the key reasons why;
Market knowledge – with the amount of information now available on the internet, anyone who wants to spend the time to understand property market conditions, selling prices achieved and the competitive landscape is able to do so by researching listing websites, government databases and the like. However, Estate Agents do this day in, day out for a living. They have a considerable amount of knowledge not only about current market conditions, but also in which direction the market might be expected to move, why particular homes are selling for higher prices than others etc. Not having a good grasp on overall market conditions could mean that you possibly under or over price your home.
Pricing - setting the right selling price is absolutely critical. You obviously don't want to undervalue your home. But you also don’t want to fall into the trap of asking too much and letting your property go “stale”. If a property fails to sell in a reasonable period, people will naturally ask “what’s wrong with it?”. "Has it received a poor survey?". "Has a mortgage lender valued it lower than the asking price?". One point we would stress is that you should be cautious when using “on line” valuation tools. No matter how good their systems or algorithms, they cannot possibly take into account the specific condition of your property or the nuances of the local market.
Objectivity – on the positive side, nobody knows your home better than you do. You will understand all of the things that work for you, what you have enjoyed about living at the property etc. However, what might have been important to you when buying and living at the property may not be important to others. When you sell a house yourself, you lose a level of “objectivity” and “independence” about what other people might see as positive or negative aspects of your home.
Advice – while selling a home is not overly complex, as outlined below, there are a significant number of steps involved and a considerable number of parties that need to be coordinated. While navigating your own way through a sale is possible when everything runs smoothly, having considerable experience to draw on is important when things don’t quite go plan and issues arise which, in the considerable majority of transactions, invariably happens.
Marketing – to achieve the maximum price for your property and sell it in the shortest period of time, you will need to develop a marketing plan that not only reaches as wide an audience as possible, but also targets specific categories of buyers to whom your home would be particularly relevant. A marketing plan for your home will need to assess the positive attributes of your property, any issues that might need to be managed with buyers, assess your competition, identify your target buyers and then develop a detailed marketing campaign incorporating digital and print advertising. An agent will also work their existing database of buyers and investors who might be interested in your property. You will achieve a better price for your property if you can achieve a level of "competition" and this is where a great marketing plan comes into play.
Relationships – selling a property is about more than just trying to find a buyer. The sales process involves a number of different parties including solicitors/conveyancing firms, mortgage companies and lenders, mortgage brokers, in the case of leasehold property – the landlord and their agent etc. Estate Agents will have established relationships with the majority of parties which an be helpful in resolving issues and expediting the process.
Assessing the offer – any offer that you receive on your home needs to be assessed, not only on its financial merits, but also on the ability and probability of the buyer being able to complete the transaction. Assessing the extent and complication of any chain, the financial position and borrowing ability of the buyer are all important aspects of determining whether or not to accept an offer. The last thing you want to do is to say "yes" to a poorly qualified buyer, spend considerable time and money, and then have the transaction fall apart after a couple of months. This is where your Agent’s experience and advice becomes invaluable. It’s frequently said that “any offer is a good offer”. At Aspire, we do not concur with this, as we believe that only a “well qualified offer is a good offer”.
Managing the negotiations – selling a home inevitably results in a negotiation over price and terms and conditions. An effective negotiation requires a level of objectivity and in the heat of the battle, the ability to find common ground and a way to move the transaction forward. Having an Agent coordinate between buyer and seller removes some of the emotion from the negotiations and ensures that an objective third party is working hard to find a compromising solution to any problem.
Psychology of the buyer – buying a home involves both a logical and an emotional decision and most good agents know this. There is a lot of psychology involved and having an understanding of what a buyer will be going through emotionally is important. The concepts of "confirmation bias", "anchoring" and "buyer’s remorse" are all important considerations and understanding them increases the likelihood of a successful transaction.
Managing sales progression - as a seller, it’s great to experience the euphoria of receiving and accepting an offer on your property. However, unfortunately there is still some considerable work to do before you “pop the cork” to celebrate the sale. The period after offer and before completion is called sales progression and the data clearly shows that a transaction still has a 40% chance of not completing successfully during this process. Being able to deal with issues relating to mortgage valuation, survey results, contractual complications, problems at other points of the chain are all critical to ensuing that a sales transaction is “held together” and reaches a successful conclusion.
Buyers remorse - it’s always possible that the buyer might have a change of heart or mind. After the adrenaline wears off, buyers tend to start to question their decision. This is called “buyer’s remorse” and a majority of buyers will go through this process. Again, this is where an agent really needs to earn their commission. A good agent understands that a buyer might have second thoughts and will proactively work to provide the information and assurance needed to settle the nerves. The positive news is that the research shows that “buyer’s remorse” while common, is a temporary state of mind for buyers which seldom lasts for more that about one week.