Selling house yourself

RATM

Interesting discussion, I can see the pros and cons of both sides.

One thing I think there might be a market for is a kind of a halfway house. From a buyers perspective the biggest complaint about EA's seems to be them not returning calls, sometimes not showing up at the right times for viewings, etc. Basically not doing their job which isn't good for sellers either.

I think if an estate agent offered a service whereby they advertise the house AND they deal with the negotiations but the vendor showed the house to buyers then that might get some traction.

For one showing houses is a time consuming thing to be doing. Some houses might have 20 or 30 viewings before offers come in. Serious buyers will insist on a second viewing and even some will want a third if they've two ideal places in mind and want to separate them.

So if they owner actually showed the buyers the house that would save EA's a hell a lot of their time from their working day. The vendor still gets the benefit of the EA's advertising power and the benefit of an intermediatary to negotiate price.

Of course EA's would have to offer such a service at a lower % commission than they currently do. But if it means they get €1000 less for selling a house but save themselves 40 or 50 hours showing the thing then that may well be worth their while.

magicbastarder

true wrote: »

15 and 25 and 35 years ago people went through travel agents to buy airline tickets. Travel agents took a percentage, just as estate agents do. Now many if not most people deal direct with the airline. The internet has made many people confident about buying and selling - think of donedeal, ebay, adverts etc. There is more transparency in buying and selling direct - thats why its increasing. Online websites means both buyers and sellers know what properties cost.

but a house costs 1000 times as much as an airline ticket. and there are far more legal ramifications to buying a house; plus, your analogy falls down on a second point in that when you buy an airline ticket direct, the company you are buying from is a known quantity.

to make your analogy closer to the debate at hand, you'd be going to a completely unknown website to buy a ticket. or paying some guy you met in a pub for a flight to alicante.

68Murph68

I think if you're reasonably intelligent there is little to no benefit in using an estate agent.

Due to the way commission works,estate state agents have little to no interest in getting the best price for your house, they just want to get it sold.

Suppose you are selling a house.
You agree a 1.5% commission with the EA.
An initial offer comes in of €280,000
In this case the estate agent will pick up €4,200.
What incentive is there for the estate agent to put in more work to get the price up to €290,000. They would only receive an extra €150 in this case but the seller would receive €9,850. How much extra work is the estate agent likely to put in?

Ask yourself what determines what price you will get for the house?

In my opinion the number one factor is the number of seriously interested parties with the actual finances to be able to pay the price you want for the house.

I really doubt the vast majority of estate agents will be able to affect this key factor all that much.

Irish estate agents have a very poor reputation in terms of honesty and in terms of customer service.

I would advise anyone selling their own home to do as much research as possible on the process. Also if you have friends/family ask them for their opinion. Ask them to be brutally honest and tell them you want to know what's wrong with your property/your valuation/your strategy.

If you are considering using an estate agent
Ask the estate agents exactly what they provide for their fee in terms of their services. what do they do? how many viewings will they conduct?
Ask them why they will get the best price for you.
Ask them what they provide that you can't do yourself.
Ask them why you should choose them as opposed to the EA down the street.

Also - you will definitely have to pay a solicitor. I would say get as much bang for your buck out of your solicitor. If you can get one who has a track record of dealing with the property side of things this would be a big advantage.

Selling your own home isn't for everyone, but its definitely do-able. I know of a few people who have done it and none of them has any major regrets.

P. Breathnach

68Murph68 wrote: »

...
What incentive is there for the estate agent to put in more work to get the price up to €290,000....

1. Professional pride (the better EAs have some).
2. Over a good number of transactions, the bits of additional commission add up.
3. Reputation - that's what brings in clients.

true

now some apartments and properties are the same price as a prestige car or jeep. You can get a house or apartrment in many parts of the country for 40 - 50 or 60k. If you were selling a nearly new X5 jeep or Audi A6 would you risk letting an estate agent type try to advertise it on donedeal for you ( as opposed to daft.ie ) and handle all the negotiations? More than a few estate agents just want to sell the properties, and mark "sold" on them. More than a few have been found or suspected of doing deals to help their friends or relatives etc. I'd trust a secondhand car salesman before an estate agent, going by personal experience.

magicbastarder

i once called an estate agent a '****ing crook' on the phone to him, and tried to make a complaint to the IAVI about him (this was about ten years ago); but the IAVI seemed a bit perplexed about how to deal with the call. he was an absolute gangster who was trying to screw me out of money.
but that said, i decided to sell my house through a reputable estate agent, and am happy i did so.

RATM

68Murph68 wrote: »

I think if you're reasonably intelligent there is little to no benefit in using an estate agent.

Due to the way commission works,estate state agents have little to no interest in getting the best price for your house, they just want to get it sold.

Suppose you are selling a house.
You agree a 1.5% commission with the EA.
An initial offer comes in of €280,000
In this case the estate agent will pick up €4,200.
What incentive is there for the estate agent to put in more work to get the price up to €290,000. They would only receive an extra €150 in this case but the seller would receive €9,850. How much extra work is the estate agent likely to put in?

The authors of Freakonomics wrote a whole chapter on why estate agents own houses sell for more than the market average and explained much of this off in the same way you have done.

There is a simple way around it really but it is up to the vendor to introduce it to the contract.

Lets say the EA values the house at €300k and the vendor agrees with that valuation and would be happy to achieve that price. So you draw up a contract that pays the EA 1.5% for achieving €300k. But then you put a bonus scheme into the contract to incentivise him to out perform the market and get you a higher price. So you could say that for every euro he achieves you over €305k you will pay him a 10% commission. That alone incentivises him to get you an extra €5k and it doesn't cost you anything extra over the agreed 1.5%. But if he achieves you €315k then the agent stands to gain an extra €1000. So his commission structure would look like this:-

Total Sale price €315k
€305k @ 1.5% = €4575
€10k @ 10% = €1000

Total €5575

The extra €1000 bonus represents around an extra 17% fee on what he would have got if it was just a flat 1.5%. So the agent is incentivised to try to push your house to €315k as to him personally it is worth an extra €1000 whereas under the 1.5% structure all he would have gotten out of it is an extra €225, making it not worth his while.

There is nothing stopping vendors putting conditions like that into contracts with EA's. The EA's who know their game and who are good salesmen will be attracted by such a bonus scheme. The ones who are lazy and know they aren't good at sales will be repulsed by it. Which in itself is a good way of separating the wheat from the chaff, it helps to filter the bad agents out before the process has even begun.

Mr Bump

All, thanks for all your imput, very interesting comments / views, just an upate from me, I have let to word out in the area that I am selling, I have not even put the house on the net yet, I have 3 viewings this week already, I have told them what i am looking for, (15% more then what I will accept for it), so lets watch this space,

RATM

Best of luck with it Mr.Bump, hope it goes well for you

magicbastarder

worth noting that the market in dublin is a bit manic for 3 and 4 bed houses in well established areas; when we were looking (september last year), we were at an open viewing where there were 25 people in the house at one point - and a friend was recently at one with close to 100 people attending.