There’s no doubt about it — selling your house by yourself is a challenge. With legal obligations, setting a sale price, and drafting purchase agreements, it can all get overwhelming, especially for first-time home sellers. However, thousands of people do it every month so once you know the process and implement a strategy on how to sell your house privately, it’s actually very doable.
Plus, as house prices skyrocket, so does the amount you pay a real estate agent. Commission rates typically range from 2.5% to 3.95% of your selling price. Nowadays, some agencies charge $10,000 more than others, even for a median-priced house.
The rising commission rates is why many home sellers across New Zealand attempt to sell their properties on their own. It’s simply a matter of saving on costs and having direct communication with potential buyers.
With that in mind, let’s look at the steps on how to sell privately.
1. Determine your property’s fair market value
The first step is to get the price right. Price your house too low and without an independent third party negotiator you run the risk of underselling it. Price it too high, and your property can sit for months on end without selling. Even in a strong market overpriced properties sit for extended periods of time, just because the market is strong doesn’t mean buyers will buy the property at any price. To avoid these pitfalls your focus should be on setting your asking price at a level you are happy with yet you know is realistic.
There are four ways that you can use to determine the value of your property:
Get a real estate agent to do a competitive market analysis
A real estate agent can visit your home and conduct a detailed analysis of your property. The agent should also compare your home to similar properties in the area which have been sold recently. This service is generally carried out free of charge and the property estimate is often reliable.
However, you may get a sales pitch along the way and there’s a probability the agent will give you a high estimate on your property to get you to list with them. You can speak to a few different agents so you can compare their proposals.
You can search online to get an idea of the average price of property sales in your area. However, while some of these website services are free, take note that not all of them are up to date with the most recent sales. Additionally, while local sales are helpful indicators of property values in your neighbourhood, you’ll also need to take into account the condition of your property plus features that likely differentiate your property from the rest.
Rating value (RV)
Your property’s RV is basically the value that the local council uses to determine your property’s payable rates. While it is not necessarily the market value, it is one of the factors a buyer may use to determine your property’s overall value. You can request for a copy of your latest RV notice from your local council.
You can ask a registered valuer to give you an accurate estimate of your property’s value. This service comes at a cost, but registered property valuers are extremely detailed and knowledgeable about building methods, materials, and legislation. They also know their local real estate market.
The valuation will consider the type of property you have, recent property sales in your area, your home’s features and what your house is made of. You can find a registered property valuer on the Property Institute (PINZ) website.
2. Know your legal requirements when selling privately
An important part on how to sell property privately is knowing your legal responsibilities. Here’s a rundown on what you’ll need to know:
Share relevant information about your property
When selling your home, regardless of whether it’s with a licensed agent or privately, you need to disclose information that will affect a buyer’s decision. For example:
- Property drainage issues
- Alterations to the property without the required consent
- Known structural defects
- Boundary or other known land issues
If you don’t disclose these issues, the sale could fall over at the conditional stage, or the buyer could even seek compensation from you.
Talk to a lawyer or conveyancer
Want to avoid the stress of preparing a sales and purchase agreement that’s legally compliant and ticks off all your requirements? Most lawyers and conveyancers offer a free consultation for home sellers considering a private sale process.
A lawyer can definitely make it easy for home sellers to get the legal paperwork right, and it’s nowhere near as expensive as you might think, particularly when measured against the cost of a real estate agent. When preparing your sales and purchase agreement, your lawyer will listen to your requests and incorporate your special conditions. As they have expert knowledge of property law and how to sell property privately, the lawyer will reduce the risk of conflict later on by ensuring the contract is fair and legally binding.
Your lawyer can also arrange a suitable time to settle and liaise with the conveyancers, banks and lawyers involved with the other party.
3. Talk directly to buyers on Yelsa!
Now, we’ve come to the last step on how to sell your house privately – choosing the best sales method! Yelsa is a revolutionary real estate app that connects you directly with motivated purchasers looking for properties like yours. This makes selling your house privately much easier, streamlined, and more affordable. When you sign up on Yelsa as a Seller, you’ll get instant access to all the active Buyers looking for a property just like yours, and the app continues to notify you as new matching buyers enter the market.
Sellers can run the Yelsa Buyer Match and browse the list of registered buyers on the app whose needs match the features of your property. You can then unlock the second level of each Buyer’s profile for a one-off fee so you can carefully evaluate Buyers before you invite them to your home. You can also directly converse and negotiate with Buyers, helping you both save on agent fees. Yelsa has completely revolutionized the process of selling property, all while helping Sellers save on marketing and commission costs. For more information on Yelsa and how to sell your home privately, head over to our Help Centre. You can also download the app now to check out all the amazing features at the tips of your fingers!