C21 New Zealand News

Most Private Sales Cost Vendors

BY TIM KEARINS,

CENTURY 21 NEW ZEALAND

This spring is a timely reminder that homeowners who use a real estate agent can expect to get on average 15% more for their property than they would by selling it privately.

In late 2020, REINZ released extensive industry analysis that showed engaging an agent to sell a home would achieve the vendor the highest premium in 18 years.

With house prices now softening it could be tempting for some Kiwis to think they could sell their home themselves and save some money. However, in this market, a skilled salesperson and negotiator is all-important.

Vendors need an agent who can firmly push back on cheeky offers yet still close a deal. Today’s buyers are naturally keen to reference current market statistics and sentiment. A good agent will defend a property’s value, focusing on its positive aspects that stand the test of time – such as location, school zones, section, space, storage, condition, sun, and design.

REINZ’s research has shown time and time again that while selling privately may save vendors commission, they’ll end up with less on average compared to what an agent would’ve delivered.

The message that private sales often cost money, not save it, is getting through. REINZ’s analysis showed a decrease in the percentage of people choosing to sell their property privately – down to 14% in 2020.

It’s also important to consider that because a buyer knows a vendor won’t be paying for commission in a private sale, they often use that as a negotiating tool from the outset to reduce the price accordingly.

DIY vendors often overlook the critical importance of property presentation including decluttering a full house or staging an empty one. What’s more, the increasing use of drone and video footage, virtual tours, 3D floor plans, and extensive social media exposure now play a key role in attracting buyers and achieving top dollar.

Since Covid-19, we’ve noticed more buyers have got used to doing their shortlisting online, rather than by property visits in person. Hence, a property’s online appearance and cut-through is more critical than ever. A good agent and agency can deliver a world-class marketing package at considerably less cost than what most individuals could achieve.

Human nature also dictates that many buyers simply don’t like dealing with sellers directly. They’d rather liaise with a professional third party. Other advantages an agent brings include legal protections for vendors, honed negotiating skills, and a wide network of contacts.

Buyers should select an agent who’s continuing to sell houses for good money. Statistics show in this market, high volume sellers are often low-value sellers. Selling plenty is not as important as selling well.

When all is said and done it’s easy to see why, overall, agents continue to achieve the best sales result for a property.

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