The BBC’s show asked ‘can I sell my house without an estate agent?’. This simple answer to this is, ‘yes, of course!’… but the real question should be, ‘do you want to?’. And to answer that, you need to know a fair bit about what selling your own home involves, and what you have to gain… or lose.
Why would you want to sell your own home, rather than employ a company to do it for you? The most obvious reason is to save money. Estate Agents’ fees vary, but usually range between 1% and 2% of the final sale price of the property (usually plus VAT). So, on a £200,000 home, you could save £4,600. That’s a lot of money, certainly enough to make it worth considering axing the agent!
But it’s not the only reason. Selling your own home is a challenge, and involves a range of skills and experiences that can be engaging and interesting. As with any venture, setting a goal and working to achieve it can be justification in itself. It is daunting, perhaps, but it is also very rewarding to succeed in something unfamiliar. Selling your own home does mean that it’s all down to you, and you will know what’s happening in the process, even if it takes some time to master the details. So, selling your own place might not just be financially advantageous, it could also be a fascinating and rewarding challenge. Put like that, it’s a wonder why anyone does use estate agents!
But in fact the overwhelming majority of people do use an estate agent – including most people who are, of have been, estate agents themselves. Again, the biggest reason is financial. Agents are much more likely to get a higher sale price, because buyers go to estate agents to find their new home. Most buyers now use internet sites like rightmove, but private individuals cannot advertise on the major property websites. Agents register prospective buyers every day, and start with an up-to-date list of house-hunters. On that £200,000 home, an agent is much more likely to find a buyer willing to pay £200,000. A private seller might well never reach that buyer, and may get a ‘best offer’ of, say, 95% of the price… or, in this example, £190,000. Suddenly the £4,600 “saving” on fees has cost you £5,400 in real money!
More than that, estate agents have two other big advantages in getting you a higher price than you might achieve on your own. First, they are experienced negotiators. It’s their job, and they do it every day. This might not matter if your own experience includes negotiating big-ticket items, but the second factor is always true – prospective buyers are not reliably going to tell you their financial position. An agent should always know the upper limit of a potential buyer’s budget, and can advise you whether someone is genuinely offering the most they can afford, or if they are just trying to cut a good deal. An agent is more likely to know if the buyer needs a mortgage, or has to sell their own home before they can buy, or indeed if they have cash in the bank and can move tomorrow!
The agent is also more likely to know the potential buyer’s true opinion of your home. It takes some chutzpah to face someone in their own home and tell them their bathroom’s horrible and the water feature they built themselves is a mess… but a viewer will tell the agent, not least because the viewer wants the agent to find them something more to their preference next time. If the same things are putting off different viewers, the agent will see the pattern and can let you know – just like on those property shows where the seller sees buyers on the hidden camera discussing the pitfalls of the house, and is always shocked by the comments. When dealing directly with the owner, most viewers are polite, and say bland, nice things… but this can mean anything from ‘we’d rather sleep in under a bridge than live here’, right through to ‘we love it and will give any amount to buy it’. You might never know which it is, but the agent will, and either way it means an agent might be better placed to get the best possible price from the right buyer
It’s not all about the money, either. Estate Agency should be – first and foremost – a service industry. Estate agents are there to take the pressure off sellers, by looking after the niggardly and time-consuming details of seeing a sale through to completion. Sometimes it can be very easy – no survey problems, no mortgage problems, efficient solicitors and a very smooth transaction. But on other occasions, it can all get very difficult… a surveyor insists of a damp and timber report, the mortgage company insists on remedial works before completion, the ‘solicitor’ is a call centre and nobody knows what’s going on, and the buyer’s buyer’s buyer starts to get cold feet. That is when a good estate agent really earns their fee! And, in cases like this, you are not just paying the agent for their time and expertise… in effect, you are paying the agent to worry and stress on your behalf, and to sort out every problem when it arises while shielding you from anxiety whenever possible.
Perhaps it’s worth returning to the words of Jonny Benarr, the presenter of ‘Axe The Agent?’ and ‘To Buy Or Not To Buy’ He says: “In today’s market I would only axe the agent if I had the time to sell my house because there is a lot of work and effort involved. I would be too busy to do it myself, but it is worth having a go if you have time – you have nothing to lose by trying it and you could save thousands in fees.” It’s worth remembering, though, that Jonny Benarr was an estate agent for six years before becoming a TV presenter. Without those years of experience, most people might indeed have something to lose, especially if the price they get on their own is significantly lower than that which an agent could achieve.
But, either way, the biggest issue that Benarr has identified is not money… it’s the time and the work involved. If you are thinking of selling without an agent, that is the most important consideration.
Pros and Cons for using an agent
Reasons to use an agent:
- Agents will reach far more buyers – Agents can advertise on websites like Rightmove, but individuals can’t. Agents already have a database of potential buyers. House-hunters go to estate agents, and read agent’s adverts in the newspaper. More potential buyers means you are more likely to get a higher price.
- People who view your home may not be honest and upfront with you about their opinions, but probably will tell a third party what they liked and didn’t like about your home
- Potential buyers will not reliably tell you about their financial situation. Agents are more likely to know what a prospective buyer can afford, or which of two potential buyers is in the best position.
- You will have an experienced specialist to give you advice at all times
- Agents are experienced negotiators and may get a higher price
- Agents can spot and anticipate potential problems, and are more experienced in overcoming them
- Agents have established relationships with most local solicitors, surveyors, mortgage brokers, and other industry specialists
- If you are in a ‘chain’, agents are used to sharing information with one another and with solicitors to make sure everything holds together
- Agents will do the work that you will otherwise have to do yourself – from measuring and photographing your home, writing adverts and sending out details and showing people around, to negotiating the sale, talking to solicitors, working out the ‘chain’ and ensuring each stage happens when it should. This is very time consuming, and can require knowledge and experience.
Reasons to sell without an agent:
- You avoid agency fees
- You are in complete control and will know exactly what’s going on. You’re the master of your own destiny!
- You get to negotiate directly on the price, which is great if you are experienced in negotiation from your own work or life experiences
- It’s very satisfying to look after your own affairs
- It’s a great way to build up your own knowledge and experience
- If you, or your friends or relatives work in a related industry, you can get expert information without the cost
- If you have lots of time, most people have the ability to do everything needed to sell a house