The five objectives of most home sellers
Whether by private sale or using a traditional agent, not everybody wants the same result when they decide to sell their home. Some people want to achieve the highest sale price. Others want to save on the exorbitant commissions and marketing fees charged by real estate agents. There are those who want to maximise how much they pocket from their sale. Many care mainly about the convenience and how to minimise the headaches involved with the process of selling. There are also people for whom the most important factor is a quick sale. These are five distinct and often competing objectives. Understandably, most homeowners would like to achieve more than just one of them. Unfortunately, the more of them you aim for, the more difficult it becomes to successfully achieve them. You have to decide where to compromise. Despite having these five, competing objectives to juggle, for a long time homeowners have only had two solutions to chose from: a real estate agent or a private sale. Both of these come with significant compromises.
A better alternative to both a real estate agent and a private sale
Obviously, the best result is achieved when you minimise the number of objectives that you compromise on. The good news is that there is a way to do just that. There is a new method of selling called the Assisted Private Sale™, which combines the cost benefit of a private sale, with the expertise that you would expect from the very best real estate agents. Before I explain the benefits of this method, let’s examine the little known compromises that come with a traditional agent sale and a private sale.
Selling with a real estate agent
The majority of people choose to sell with a real estate agent because they perceive – mostly incorrectly – to be making the least amount of compromises. They are willing to make compromises on the costs they will incur and how much they pocket from the transaction. In return, they hope that they will achieve the highest sale price, in the shortest amount of time and with the most convenience.
Highest sale price?
Most people mistakenly believe that the only way to achieve the highest sale price is with a great real estate agent. What these people are not aware of is that real estate agents actually have a disincentive to achieve the highest sale price for you. I wrote about this here and here. It is not an agent – or any person for that matter – that achieves the highest possible price. It is a formula or a process that does this. Fortunately, this process doesn’t care who follows it. In reality, by engaging a real estate agent, most people are compromising on the sale price they could achieve. This leaves convenience and speed of sale as the only reasons to use a real estate agent. People may find the rare conscientious agent, who helps to achieve the highest sale price. Unfortunately, the real estate fees involved, mean that they will compromise on how much they pocket from the transaction. In most cases the costs of engaging an agent far outweigh any uplift they help to achieve in the sale price.
Only those who have never experienced it believe that selling a home is convenient. The truth is that selling the home that you’re living in is a pain in the backside. Even if you engage a real estate agent, you have to organise and coordinate any preparations for sale, such as decluttering, painting, repairs etc. You need to do the preparations before each open home and then leave your home for an hour while groups of mostly sticky beaks trample through your house. You then have to clean up afterwards. You still have to negotiate with the buyer, through your agent and you still have to complete all the legal paperwork that goes with the conveyancing process. No real estate agent can make this completely convenient and your involvement is required. As a matter of fact, you will compromise the success of your sale campaign by not being involved or interested in the process. While selling with a real estate agent is more convenient than selling privately, there is a large element of perceived convenience for those who choose a real estate agent. There is always some effort and inconvenience involved with selling. Whether this be with an agent or privately. Many people who engage an agent realise that the perceived convenience was not worth the cost.
Quicker agent sale?
This leaves the speed of a sale as the only benefit of using an agent. Or does it? Contrary to what most people think, a commission incentivises a real estate agent to sell your home faster, and NOT for the highest possible price. I wrote about this here. If you have read it, you will understand that there is often (not always) a compromise between selling for top dollar and selling quickly. If you are OK with a lower selling price in order to sell quicker, than that is fine and an agent can often help.
Conditioning delays the sale
Unfortunately, there is a further complication. Most agents know that one way to win your listing is to quote a high sale price. Once you sign up and they lock you in, they start the process of conditioning you down to a more realistic price point. This method is actually taught to agents at one of Australia’s largest and well known real estate companies. How quickly you end up selling now depends on how fast the agent can condition you down and how desperate you are to sell. Even if you are keen to sell, it may take a while for you to get over the shock of having to ‘reduce’ your price by $30,000. The longer it takes you to accept this, the longer it will take you to sell. You already know that a real estate agent is going to cost you significantly and reduce how much you pocket from your sale. We have also established that an agent is not likely to achieve the highest sale price, make the process convenient or necessarily achieve a quicker sale. A logical question would then be: Why use a real estate agent?
Most private sellers ask themselves this exact question and reach the obvious answer that they will not be listing with a real estate agent. They are not desperate for a quick sale and are prepared to compromise more on convenience. Let’s be honest, a private sale does involve a little more work (but not much more). In exchange, these people are hoping to achieve a higher sale price and maximise how much they pocket, by avoiding the exorbitant commissions and marketing fees.
Higher private sale price?
What most private sellers don’t realise is that a home can’t be sold, it can only be bought. I wrote about this here. There is a process or a formula that leads to somebody buying your home and being prepared to pay top dollar. Private sellers simply don’t know this formula and so usually end up selling for less than they could have. Their shortsighted attempt to save $15,000 in real estate fees often leads to underselling by $30,000. Sadly, they may even be ‘happy’ with their sale price, without knowing that they could have easily achieved $30,000 more. As a result, they often end up pocketing less than they could have even with a real estate agent.
A quicker private sale?
Many private sellers don’t know either the real value of their homes or how to pitch the price to the market, or both. This can lead to a slower sale, especially if their expectations are unrealistically high. Most private sellers end up making just as many compromises as those who sell with a real estate agent. They may achieve their goal of not paying high real estate fees, but at the costs of a higher sale price; pocketing less than they could have, and some convenience.
What is the solution?
You probably agree by now that of the five competing objectives many home sellers have, they need to make some compromises on one or more of them. These are personal and difficult decisions to make. Despite these sensitive compromises, until recently, there have only been two options available to homeowners who wanted to sell. Hopefully I’ve shed light on their limitations. Whether a private sale or an agent sale, both these methods require significant compromises to be made by homeowners. These compromises ultimately leave them short changed, often by tens of thousands of dollars.
Assisted Private Sale™
Having said this, both methods have some advantages. For a private sale it is mainly the low cost. For an agent sale – if the agent is a good one – it is the expertise of someone who knows the formula and process and offers a little more convenience. Fortunately, there is now a hybrid method known as the Assisted Private Sale™. This combines the cost benefit of a private sale with expert assistance and increased convenience. More importantly, it minimises the compromises associated with both alternatives.
How much you pocket is the main focus
It is designed for people for whom maximising how much they pocket from their sale is the highest priority. Many homeowners confuse this with maximising their sale price. If you want to maximise how much you pocket from the sale of your home, you need to achieve both the highest possible sale price as well as the lowest possible selling costs, which ideally means, no commission. This is where an Assisted Private Sale™ helps. It follows the proven formula and process that achieves the highest possible sale price, at the lowest cost and within a reasonable time. All this with minimal compromise on convenience. Everyone wants to reduce the number of compromises they have to make when selling their home. Until recently, there hasn’t been a method that has allowed people to reach all five objectives associated with a sale. The introduction of the Assisted Private Sale™ has forever changed this. You can now keep your compromises to a minimum when selling your home. For more information, please visit: www.revolutionaryrealestate.com.au