The majority of property owners in Australia use the services of a real estate agent to sell their home. While a ‘tried and true’ method for vendors, it is possible to sell your home without the services of an agent.
It’s a tempting idea – bypass the hefty real estate commission and fees and sell in your own time.
With a number of flat-fee package services on the market or the option of managing the entire sale process yourself, this can be a cost-effective alternative to traditional engagement with a real estate agent.
However, there can be pitfalls for the inexperienced seller. We will look at the pros and cons of this method of selling a property.
What options are there to sell without an agent?
A number of companies in Australia offer a flat-fee, packaged service which covers marketing and advertising, buyer negotiations and contracts.
These typically have different tiers of payment – basic packages can arrange brochures and signage, all the way through to a premium service with a comprehensive advertising campaign, buyer negotiations and contract management.
As the vendor, you are still responsible for preparing your home for sale and managing inspections. You will also need to factor in the standard costs of selling a home which include solicitor or conveyancer fees, capital gains tax, building inspections and bank fees.
You will also need to pay for a home staging service if you want your home presented professionally for sale, and for the services of an auctioneer if you opt to sell through auction.
The other option is to manage the entire process yourself – preparing your home for sale, organising signage, brochures and real estate listings, holding inspections, dealing with potential buyers directly, exchanging contracts and receiving and holding a deposit securely until settlement date.
You will still need to engage a solicitor or conveyancer to draft a contract of sale and any other necessary legal documentation.
The Pros of Selling Your Home Yourself
No Fees or Commission
In Australia, real estate commission can vary between states and for metropolitan and regional areas. In Victoria, the average commission is 2.05% (Source: Open Agent.com.au).
You may also pay a tiered or sliding scale commission as an incentive for an agent getting a higher sale price. Some real estate agents may be paid a bonus for securing a higher price than the reserve price.
Typically, vendors also pay for advertising and marketing. This is usually a set fee which covers photos, flyers, social media campaigns, real estate listings and glossy brochures. Sometimes these costs are included in the overall commission paid.
For example, on a property for sale at $750,000, the commission would be $15,000. A flat-fee service can cost from a few hundred dollars up to a few thousand, so the savings can be quite significant.
If you sell your home yourself, you will need to pay for advertising and marketing yourself. A campaign run by a real estate agent typically encompasses photography, video, signboards, brochures and floor plans, auctioneer fees and online and print property listings.
This can cost $3000 – $5000 or more, so remember to factor this into your budget – costs can add up if your property does not sell in the first few weeks.
As the owner, you can deal directly with potential buyer and lend a more personal touch to your sales campaign.
Another advantage is the pace at which you run the campaign – with no real estate agent ‘ on the clock’ you may find a more relaxed pace with which to run your sales campaign.
The Cons of Selling Your Home Yourself
Selling a house is time-consuming – taking calls, arranging inspections, dealing with suppliers for your marketing, and keeping your online listings up to date can chew up a lot of time. This is fine if you don’t work full-time or are retired, but juggling the task of selling your home alongside work and job commitments can quickly become exhausting.
No Emotional Detachment
Coming face to face with potential buyers who point out the faults of your home and try to talk you down to a lower price can be daunting and confronting – something that is avoided when using an agent.
Some buyers will be put off with dealing with an owner directly, believing that their lack of legal knowledge and experience may hamper the sale process.
The Pros of Selling Using a Real Estate Agent
Knowledge and Experience
A local real estate agent will generally have a wealth of experience and knowledge about the local market that they can bring to bear when selling your home.
You Pay For Their Time
Paying fees and commission to an agent means you can hand over the process of selling your home to a group of professionals who have gone through the process many times before.
Access to Professional Resources and Branding
An established real estate agency will be able to advertise and market your property professionally with resources that you may find surprisingly expensive if you go it alone. You are also paying to access the brand and reputation of the agency, something which takes a long time to establish and which can be valuable in a competitive market.
The Element of Remove
An agent can present your property to its best advantage to potential buyers without any emotional attachment or bias, leaving them free to negotiate with interested parties on your behalf.
The Cons of Using A Real Estate Agency
Fees and Charges
It goes without saying that the more you sell your home for, the more commission you will pay. On a million-dollar property you will pay roughly $20,000 in commission and several thousand for a professional marketing campaign. This can be offset against the more favourable price that an experienced agent can help you achieve.
Who To Choose?
It can be daunting choosing a real estate agent in a crowded market. Should you go with one who charge a lower commission but who are newer on the scene or one with an established reputation with higher fees? We have some tips on how to choose the right real estate agent for you.
Do They Have Your Best Interests In Mind?
If you unlucky enough to choose an unprofessional or unscrupulous agent, you may find yourself under pressure to sell for price you know is not fair, in order for the agent to pocket their commission quickly.
Have you decided to sell your home?
What is an Owner Builder Defects Report and why is it important?
Under Section 137B of the Building Act 1993, any renovation work that has been completed needs to be inspected by a suitably qualified person. The Owner Builder Defects Report forms part of your Section 32 documents. The purpose of the report is to protect both the purchaser and the owner, so they know the condition of the renovated property before a transaction takes place.
The report highlights any faults or defects in the building work, any incomplete work and will identify if second-hand materials have been used.
Book a Home Inspection Hub Owner Builder Defects Report if you have constructed, renovated, altered, extended, improved or repaired a home or have taken out a permit but had a builder undertake the work.
Some of the types of renovation work we check include:
- Decks, verandahs or pergolas
- Kitchen Renovations
- Full House Renovations
- Swimming Pool or Spa Installation
- Bathroom Renovations
- Garages and Sheds
- Retaining Walls
Why is an Owner Builder Defects Report with The Hub so important?
- An Owner Builder Defects Report can only be provided by a prescribed practitioner. At The Home Inspection Hub, we have a number of suitably qualified inspectors who can inspect your renovation work and prepare the 137B Report.
- We can prepare the report on our custom-built iPad inspection app and then send the report straight to your conveyancer if necessary
- The 137B Report will enable the owner of the property to obtain domestic building insuranc which is required for any domestic work with trade value over $16,000.
- Under the Building Act, it is an offence to sell your property within the 6.5 year timeframe without a Defects Report and Builders Warranty Insurance. It’s important to note that heavy penalties apply for non-compliance.
- In addition, if you fail to provide an Owner Builder Defects Report, the purchaser has the right to pull out of the sale agreement without incurring penalties.