Tempting For Some, But Selling Privately Could Be Costly

“In a softer or challenging real estate market, some Kiwis could be tempted into trying to sell their homes privately to save on commission. The reality is, it’s likely to end up costing them more,” says Tim Kearins, Owner of Century 21 New Zealand.

“In fact, during these times, real estate agents become really important,” he says.

Mr Kearins says extensive industry analysis, conducted by REINZ, has in the past shown that engaging an agent to sell a home could achieve the vendor the highest premium in two decades. In fact, homeowners who use a real estate agent could get on average 15% more for their property than they would by selling it privately.

“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,” he says.

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

The Century 21 leader says in a challenging real estate market, securing the right agent is all-important.

“In times like this it’s good agents, not advertising, who sell properties. They need to be hungry, fully prepared, and have the skill to target the most likely buyers and keep them interested. Critically, they then need to deliver a successful real estate negotiation and sale,” he says.

Another catch with private sales, Mr Kearins says, is the fact that a buyer knows a vendor won’t be paying for commission in a private sale. Subsequently, they often use that as a negotiating tool from the outset to reduce the price accordingly.

“It’s important for vendors to remember demand for property remains, with new buyers entering the market every month. A good agent and agency will find them,” he says.

Other skills and advantages dealing with an agent include legal protections for vendors, honed negotiating skills, and a wide network of contacts.

“Human nature also dictates that many buyers simply don’t like dealing with sellers directly. They’d rather liaise with a professional third party. Overall, it’s easy to see why agents continue to achieve the best sales result for a property,” he says.

Tim Kearins says since the Covid-19 lockdowns and restrictions more buyers have got used to doing their shortlisting online. 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,” he says.

Given New Zealand is once again seeing more immigration, Century 21’s international reach is also increasingly appealing to vendors. Every listing goes onto Century 21’s global website which can be translated into 19 different languages.

www.century21.co.nz

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