Most house sales involve a real estate agent, but it is possible to buy or sell privately - if you’re prepared to do the work that the agent would usually do.
The advantage is that you don’t pay fees to an agent and an agency, which can be a significant saving for both sides of the transaction.
The disadvantage is that you don’t have an agent to mediate the sale, run a marketing campaign, and provide advice.
Finding a private sale
Word of mouth can be effective so spread the word among family, friends and colleagues that you are looking for a private sale.
Advertising in local forums can also work and letterbox drops can inform potential sellers directly in neighbourhoods you may like.
Work with a property lawyer
If you’re considering selling your house privately, or you’re dealing with a private seller, you need to have a good relationship with a property lawyer, says property writer Joanna Seton.
Seton has bought houses privately three times and sold privately twice.
“A good property lawyer will help you navigate all the clauses that can be added to a sale and purchase agreement,” Seton says.
“They can help you add clauses that will protect you if you uncover something during your due diligence research, or solve problems for your buyers. For instance, if they (the buyers) spot some uncertified wiring, and you can quickly add a clause saying that you’ll rewire it, that provides a quick answer for buyers. Fumbling on these issues will tend to put buyers off.”
Presentation is vital when you’re selling
When you sell privately, you need to present your home as smartly as possible and have excellent photographs.
Seton recommends considering investing in home staging and a professional photographer for best results.
As a private seller, you cannot list on some of the mainstream property listing sites, although Homesell offers some marketing options that can allow you to list via their registered agents.
“I marketed two private sales on TradeMe and found that I got plenty of interest both times,” Seton said.
“I didn’t even make signs for the outside of the house, and I didn’t sell in particularly hot markets. I marketed with a sale by negotiation, had a really realistic figure in mind and I was open with what I expected once people were in.”
Negotiate with tact and civility
The negotiation stage of a private sale can be the most fraught – and it can take some time. Seton has twice used a letterbox drop to buy a specific property she had her eye on, and in both cases it took several months to negotiate a sale.
“Agents mediate the negotiation process, so if you’re doing it on your own you’ve got to use all your tact and civility. If you try to lowball owners or bargain too hard, that will put off the vendors. You need to endear yourself to the sellers, and you need the people skills to get the deal over the line without annoying the other party.”