There are more options than ever when it comes to selling your home, from using online agents, private agents, or auctions; each has its own benefits and restrictions. So, which is the best choice for you?
Selling a house is a big life decision for many people, and you want to make sure that you are making the best decisions. With more choices comes an opportunity to find the best solution for you, but it also means that you must put more effort into finding what this solution is. The main two options you have available when selling your house are a private sale and an auction, and the two options are quite different.
Selling a house at an auction
When people hear the process of selling a house at auction, they immediately decide that it is the best option for you. At first glance, this may be true – the process is fast, and the time you have to spend waiting to sell and either cash in or free up the capital to move to a new home is minimal. At its most basic selling, a house at auction is the same as selling anything at auction; the house is given a slot on a specific day and is sold to the highest bidder.
There are a few more steps to consider, though. When you put your house up for sale at an auction, you will be given a day of sale, and in the time running up to that, the real estate agent will market the auction to get as much interest as possible. This will include print marketing, direct mail, hosting the details online similar to what you can find here at https://supremeauctions.com/, which is what you need to ensure that your house sells for a fair price, and the advantage is that many people look to auctions to find houses to buy. It is often ‘professional’ property owners that will take to auctions as the process is faster for them if they are looking to make a quick purchase. When the house is being advertised, there will be a ‘guide price’ attached to your property, which will be in line with what the agent expects your house to sell at. This is generally about 10% lower than the actual expected sale price of the house to get extra interest and start the bidding process.
One the day of the auction, you may also have a reserve price, which is the lowest amount that you will accept for a sale of the property. There is also the option to list a house with no reserve, called an ‘absolute’ sale. Another key difference between selling at an auction compared to selling privately is that the house is bought and sold ‘as is’. This means that the buyer cannot ask or negotiate with the seller to make repairs or changes to the house as a part of the sale. The house goes regardless of its condition, and the buyer must accept it. The advantage of this is if you need to sell a house quickly and do not have time to make repairs, you can simply list it for auction and give all the work to someone else. This may be the case if you are selling a house that has come to you through a deceased relative, for example.
The benefits of selling a house at an auction
- The process is simple, and you are not required to negotiate the final price.
- The buyer must pay a non-refundable 10% deposit and as to cover all commissions.
- Urgency is created, making the timeline much faster. Most house sales through auction are made from start to finish in around 30 days.
- An auctioned house sells on your terms, meaning that you aren’t waiting in ‘limbo’ waiting for someone to buy your house while you want to move on.
- You aren’t required to meet the inspections that are required when selling a house privately. The buyer can have inspections done but off their own back.
- You are not required to make repairs or changes to the house as a part of the negotiation process.
- People bidding against each other will help bring the price of the house to its real market value. All of the marketing and admin is done by a professional team on your behalf.
Negatives of selling your house at auction:
- There is a more stringent screening method to buy at an auction, so your pool of buyers may be lower than when selling privately.
- You may not get the full market price of the house if there is a low turnout to the auction.
- Some buyers assume auctions are only for old or run-down properties, so don’t check them.
- You have no choice in the buyer when it has gone it’s gone.
For sale by owner (FSBO)
The next option for selling your house is to do it yourself without the help of an agent. This is called ‘for sale by owner’ or just ‘FSBO’. The key difference between this and selling at an auction or through a private agent is that you do not have a professional helping you through the process.
This is a good choice if you are motivated to learn the process yourself or if you already have the necessary experience to sell a home without any help. The main benefit of selling your house yourself is that you don’t have to pay the sometimes costly commissions that come with selling a house with an agent – a standard commission is between 2-6%, which can be a significant amount of the final amount that you make from the sale.
The main things that you need to sell a house yourself is time, motivation, and skills. Time and motivation can help to overcome a lack of experience, though, as you can spend your time learning the regulations that you need to meet to sell your home correctly. For many people selling a house, though, time and motivation is not something readily available. If you have a full-time job or a family, then it may make more sense to pay someone to do the hours of work needed for you. In addition, most surveys show that houses sold by an owner with no help sell for less than if an agent was involved. This is due to the inexperience with setting the correct price on the market as well as less experience in negotiating prices.
Benefits of selling a house yourself:
- You know your home better than someone who hasn’t lived in it, making you the best person to inform others about it.
- Avoid paying significant commissions.
- You can make the marketing materials, images, and describe exactly how you want them.
- Sell the house in your own time.
- Leaning a new skill may be appealing to some sellers.
Negatives of selling a house yourself
- You need to work out the selling process and all its regulations with no help.
- Marketing may be more difficult without the distribution network of an agent.
- Negotiating the price may be difficult if this isn’t something you’ve done before.
- The sale price may end up being slightly lower because of limited knowledge of setting market prices.
Selling a house privately
This is the third and most common method of selling a house, so most readers are probably more familiar with the process. An agent will take care of creating marketing assets, marketing the property, organizing viewings, negotiation on price, and the sale itself. For this service, a fee is charged with around 3-6% of the final price of the house. It is generally advised to contact several different realtors and get a few quotes and valuations of your house to get the best deal. A compromise between using a private agent and selling yourself is to use a company like Purple Bricks, which is an online agent. The fees are significantly cheaper, and you get most of the benefits of hiring a local agent such as marketing on large websites and a free valuation. This is an option definitely worth considering when you are looking to sell your house.
Benefits of selling a house privately:
- You get a professional to help you with the sale of the house.
- Their commission is attached to the sale price, so they are motivated to sell it for the highest possible price.
- You get access to professional photographers and floor plans to make your listing look as attractive as possible.
- Access the agent’s marketing channels, email databases, and direct mail lists to maximize your reach.
- Fully outsource the process and save time and energy.
Negatives of selling a house privately:
- Selling fees can be expensive and eat into the money you receive after the sale.
- The process can still take a long time as you are reliant on buyers that may have a chain.
- The quality of the agent helping you isn’t guaranteed.
