Selling your property yourself can save you thousands in agent commissions. Here’s how to sell your property without a real estate agent.
There are a lot of people who sell their properties every single year without the use of a real estate agent and thus saving themselves quite a large commission.
Today I have with me Daniel Baxter from YourHotProperty.com.au. He helps people sell their properties without a real estate agent and he is going to talk us through the pros and cons of doing that as well as the process on how to sell your property without a real estate agent.
Ryan: So hey Daniel, thanks for coming on today!
Daniel: Hey Ryan, thanks for having me. I am really excited to be here today.
Ryan: So, let us talk first about why would people consider selling their property without the use of a real estate agent. Most people will sell their properties through a real estate agent, what is the benefit of selling your property without a real estate agent?
Daniel: Well, the biggest benefit – I guess the reason why we have, it is not just I guess, managers that have come to us. We have investors, we have developers; I guess what we do and how we can help people can really work with anybody. So, the big one is obviously the commission savings. Agents, the way that they are charging people, obviously, the fees are huge. Property prices are increasing, obviously, so did these fees. And the truth is most of them are doing less than what they did years ago but they are still charging the same or if not more.
Ryan: And so what are the general fees that a real estate agent will charge someone to sell their property?
Daniel: Well, it definitely varies throughout Australia. I mean the average probably, say in the metro area, is about 2%. But when we start moving out to rural areas and things like that, I have had clients with agents quoting anything up to 4.8% of the property price.
Ryan: Okay. So 2% of a $500,000 property is $10,000. Is that right?
Ryan: And then a lot of agents as well will charge on top of that for advertising fees so you will be up for hundreds of dollars to list your property online, hundreds of dollars for a sign, hundreds of dollars for professional photos and stuff as well so you are kind of looking at an extra $1,000 or $2,000 or something in a lot of cases for advertising. Is that right?
Daniel: Yes, easily. It is probably at least $2,000 to $3,000 most agents will put together for their marketing packages that they will suggest to people. But if you are looking at an auction campaign, a lot of agents love to talk everybody into an auction campaign. Some properties definitely suit that, a lot of them do not, but it tends to pay advertising so agents love it and a marketing campaign that can run anywhere between $4,000 to $10,000, easily.
Ryan: Oh wow. I did not realize auctions were so much more expensive than just selling your property regularly.
Daniel: Yeah. It is a very aggressive marketing campaign and they like to use a lot of print. As soon as you use print, obviously the marketing costs just skyrocket.
Ryan: Yeah, and what is print media these days…
Daniel: Well, to be honest I am really not a fan and I am happy to say that. Look, the statistics these days suggest that about 90% of buyers generated for property are coming online, so it does not really make sense to spend what might probably be $10,000 on print media what you might call paper magazines or your domain magazines and things like that, your local papers and things that come out where you choose their offers and things like that. It does not make sense to advertise and spend a fortune when very small percentage of the market is actually going there to search for property.
Ryan: Okay. So the biggest incentive for people to sell themselves obviously so they do not have to pay their agent their commission, but before this we were also talking a little bit about are agents actually the right person to get you the best price for your property or not.
Daniel: Absolutely, yeah. That is the thing. A lot of people come to us as well because they love the chance to get a little bit more control over when they sell their property. They are involved in the sale. They know what offices are actually being received and if they are not being received as well. It is one of the biggest things we have when people come to us and say that there is just no communication or there is a lack of communication between the agent and themselves. They do not actually have the feel for where the sale currently is at that point in time.
Obviously, if you are involved in the sale you have an opportunity; you are up close to the buyers, you know exactly whether you have people excited or keen about the property or you do not. And if you do not, at least you know then, “Well, is my property overpriced? Do I need to look at a new pricing strategy or something like that? Or is there something else that I am not aware of?” And usually when you are getting that feedback firsthand, you can actually make an educated decision of what step you should take next rather than just relying on an agent to say, “Oh, you know Ryan, the market is not quite where I thought it was 2 weeks ago. You are going to have to adjust your price.” And this is what I get told all the time, so yeah, control is always a big thing too.
Ryan: Yeah, and we were talking before that agents have a commission structure where they are getting X% for the property, maybe let us call it 2% like we did before. We are saying that if you are selling a $500,000 property at 2%, you are getting about $10,000. Well, agents are probably getting about half of that because they have to pay half to the owner of the business as well…
Daniel: In principle, yes.
Ryan: And then, for you as an owner, getting an extra $10,000 will be awesome for you. To get an extra $10,000 for your property; but for the real estate agent, $10,000 is 2% of that is $200. They are only getting half of that, so it is $100. So they keep your property on the market for an extra week or 2 weeks or 3 weeks to deal with open houses and calls and stuff like that to get an extra $10,000, which means $100 in their pocket.
I have worked on commission before and I understand the motives and things like that; like doing all of that extra for $100. Generally, most people are incentivised by that. I do not know, I think the commission structure is broken in terms of the motives and we see that through the statistics; they say that when real estate agents are selling their own properties, they keep them on the market longer. They generally get more for the properties. I do not know. It calls into question whether or not the commission structure and what we are paying the real estate agent is actually delivering the best results.
I definitely think this is something to consider. But a lot of people would be scared about considering this because it just feels overwhelming or they feel like they do not know what they are doing. Can we talk through what is the process to get your property on the market, to get it for sale and go through that process? Is that alright?
Daniel: Yeah, absolutely. I think that would be a great way to start because you also have to understand our service – look, it is not designed for everybody. I guess we have designed it for a smart, savvy homeowner or property owner who wants to save some money and is happy to be involved in the sale in certain aspects. And I guess the stream culture where we love DIY; we look at renovation shows and everything like that. Everybody is happy to do their part; if they can do a little bit, save some money, that is what everybody is happy to do, and that is where we come in, that is how we have designed our system.
Ryan: The first question is do you need some sort of license or do you need some sort of permission from a government body in order to sell your own property?
Daniel: Absolutely not, if you own a property you can sell it yourself. Obviously, as far as the legal system goes, as far as the contract and things like that, we would always suggest that people always engage or list a conveyance or a settlement agent if in WA to look after the process for you. If you do that then they are going to guide you through as far as exchanging of contracts, deposit money, what needs to happen there and when, and obviously conversing with the buyers, assessor or conveyance to look after that whole process for you. And to be honest, that is what we are paying, they are professionals at what they do, so we leave that in their hands to guide you legally through that part, so that is actually really easy.
Ryan: So I am just thinking, let us say that I have a property that I want to sell. I know that I can sell it myself, is my first step to like contact a solicitor and engage the solicitor and say I want to sell my property myself? Or do we engage them after we have received an offer for the property?
Daniel: Okay. So that is once again, that can depend on the state that you are in. A lot of states, I guess legislation varies as far as when you need to a contract in place and when you do not. So different states, it just depends on that; so Victoria – yes, New South Wales -yes, Queensland – the contract is actually drawn up after you find a buyer for the property when you are selling privately. So it can be a little bit different and that is something that we guide our clients through.
I guess the first step that we would always say to people if you want to look at this process, it really does not differ from a traditional agency as far as what it takes to get a great result. It is very similar. So firstly, it is all about preparing the property for sale. Obviously, if you can prepare the property and you are the little bits and pieces correctly and you take the time to get them right, then you are going to do everything that you can to put yourself in the best position to get the best results. So that is, I guess, step number 1.
Ryan: Okay. And then what about step number 2, I guess, will be trying to understand what our property is actually worth.
Daniel: Absolutely correct!
Ryan: You do not want to list it for too much and then it is crickets and no one comes; or you list it for too little and you get a lot of people through but they are all the wrong people because they do not want to pay what the property is actually worth.
Daniel: Absolutely correct. Yeah, pricing your property for sale is definitely the second step that you need to do. I mean, when you spend a lot of time with your clients on this because like you said, because it is all true important that this is correct and this is where a lot of agents will get it wrong as well. They will tend to go and they will try and buy a listing to get the person to sign up with them and then obviously, then they are happy to price their property that. And then they want to try and obviously get the owner to get the price to make it a bit more competitive and get interest and things like that. But we do not want to take…
Ryan: This is something people should be aware of when real estate agents are coming around; that they do have a motive when giving you the value of your property. They want the listing, they want to sell it, they want the commission, and so there is a habit that some real estate agents will overprice your property to get you super excited to hire them because you are the super confident real estate agent. But realistically your property is not actually worth that, so when it comes the time to list with that agent then they will try and talk you down to what the property is actually worth, so often when you do get valuations from real estate agents, they are not – you cannot guarantee that they are going to be accurate or without ulterior motives.
Ryan: So what can we do to understand the value of our property?
Daniel: Yes, there are lots of things you can do and I guess it just comes – I mean, I know you are in the property investor area and things like that. It comes down to doing your own due diligence, it really does. The more of that you do, I guess your arms and your education when it comes to setting your asking price, so obviously we do a comparative market analysis report which is exactly the same report an agent will provide you usually when they come to your home to get an appraisal for you. That is going to give you current market data as far as trends in the market place, comparable properties for sale, but also sold in the last 6 months that you can look at yours and obviously make sure that you compare apples with apples when you are looking at the proposed value of your property.
Ryan: So really people should be looking at what is currently in the market, what has recently been sold in the area in the last 6 months as well as maybe even a little bit further back depending on the area, and really just getting a feel for what properties are previously sold in the area. Is that right?
Daniel: Yeah, that is definitely a good start. Other things I suggest are: if you have the time, if you can actually go and physically look at properties that are comparable to yours and inspect them. You know, just have a little bit of a chat with the agent, why not. And actually get a feel for them, what the agents are saying about the property, about the market and things like that; if you can do that, once again, that is really powerful for you to arm yourself with. Besides that, as far as setting the price, something I like to do with our clients is put myself in the position of a potential buyer. This is something I think that is really powerful from our end because I am not there as an agent and trying to get the listing because I know I am going to get paid a huge commission and things like that.
They are obviously putting themselves in a position where they can be secured by their motivations, where I can just look at our client’s properties, the photos, the details that they provide and obviously provide feedback on that too. But then I also do a comparison myself as far as what am I looking at with your property, what am I looking at as your competition and put myself in that buyer position and see how does it ring. Do I look at these and think there is value in that property? Do I look at things expensive? Do I look and go, “Wow, that seems to be cheap. Why is that?”
Ryan: You are going to pretend that you are a buyer, look at the entire market. Pretend that your property is just one property in the market and say I am a buyer with X budget, “Does this property (which is the one I am selling), how does this look compared to everything else?” Like, does this look like a great bargain and something that I definitely want to go and check out? Or does this look overpriced compared to everything else and so there is no point going after it because it is just charging too much money. So I think, yeah. Those 2 things are good.
Daniel: Absolutely correct.
Ryan: People can check out, if they want to do it themselves, there is a site called OnTheHouse.com.au, where you can find comparable sales from there; and there is a site called DSRdata.com.au, where you can see trends for the area. You can see also vendor discounting so how much are people actually discounting their property below the listing price. That could be useful as well. So, let us say we got to the point where we think we have an understanding of the value of our property; now it is time to go ahead and list the property. I guess we need to get photos done. Do most people take photos themselves or do they pay a professional to do it?
Daniel: Yeah, that is right. The next step is definitely marketing advertising; what is going to be the best approach to give you as much exposure as you need so we can attract the maximum amount of potential buyers. Exactly right, so it comes down to the listing websites we are going to use. Obviously, you definitely want to make sure that you are on RealEstate.com and domain.com; they are Australia’s 2 biggest places in the market.
They are probably accounting for as far as online inquiries, they are probably at least 90% of them. If you ask anyone what site you go to look for properties, nearly always Real Estate or Domain. So if you are on those, you are giving yourself a good chance.
The next step is, like you said, your photos, floor plans, your signboards, all those other bits and pieces that are just going to finish it off. Photos – I am a big believer in professional photos. Obviously, we offer those to our clients. Some people choose to take their own. Some use a professional; it is totally up to you. If you are a good photographer, if you have a good one in your family, go ahead and take your own. Otherwise my suggestion is always photos because it is your one chance to make a good first impression.
Ryan: Well, that is the thing. I think people need to be thinking now that the majority of sales, the majority of interests is coming through the internet.
Ryan: And when you are looking on RealEstate.com.au, like put yourself in the buyer’s shoes, what are you doing? You are scrolling through a whole bunch of different properties. And if you have a property and the photos are not that good, you cannot imagine what the house is going to be like, the chances are more and more people will skip over that. Whereas if you have something that looks really nice, that is enticing; people, nowadays, want to have as much experience of your property before they even go and visit it. And I know from looking at a whole bunch of rentals and things like that, there are so many properties that you just do not visit because the photos do not give you the right impression about the property or you think it is not for you. And so having photos done right, I think like, if it was me, I would definitely pay to get professional photos done.
Daniel: Absolutely. It really is a no-brainer. If you cannot get someone excited by what they see online Ryan, you certainly are not going to get them to come to your home for inspections. So, yeah. What you said is 100% correct.
Ryan: And now, when you are listing on RealEstate.com.au and Domain and things like that, I do believe RealEstate.com.au – I am not sure if they have changed this, but you could only list on there if you are like a real estate agent; so a standard person wanting to sell their home cannot just go and list on RealEstate.com.au, which is why services like YourHotProperty.com.au exists, right? You are the middleman to get people on the website.
Daniel: Absolutely correct. Yes, that is it. I mean we are an agency just the same as any local agency in your area. We are really not different, we are just independent. Obviously, we are an online-based virtual agents so we do things a bit differently. We do not believe in charging commission but besides that, what we do is exactly the same. We are licensed agents and things like that which allows us, I guess the platform, to be able to help clients who want a different way to sell their properties, access to these magic guys so that they can attract the most buyers.
Ryan: Yeah. Okay, so we go through a site like YourHotProperty.com.au or there are a bunch of other ones out there, to get our properties listed online. What generally do people do with open for inspections, like I know some people take the approach like you can open for inspection on Saturday and Wednesday at X time; or some people do call for an open for inspection and they will take a single person around. What tends to get the best results and what should people consider?
Daniel: Once again this can really depend on the property. My personal view is I want this process to be as easy as possible for people and I think it is a lot easier to only have to do say, 1 inspection a week or 2 if you want to schedule them, and that is when you have to have the property ready or if it is an investment and you have tenants and things like that. It makes life a lot easier to if you can just schedule that once for them and that is all they have to worry about having their property looking good. You want to try, if it is an investment obviously, happy if you can take your tenants throughout that process the better.
We want them to obviously have the property looking at its best as often as we can and if that just means once a week, it keeps them happy, that is great. If a property is new to the market and if you are in an area where property – you know, there is a lot of interest out there and things like that; I want to see people do Open For Inspections. I think it is the best way to create attention and competition between buyers and things like that.
It is one of those things – look, everybody wants, if I think you want something Ryan, I will probably want it too. It is just human nature. And that is the same with property. If there are lots of people there on a day that it opened and everyone was in a bit of a frenzy going, “Well, look how many people are here. This must be a fantastic property!” It can often make people act quicker and come up with better offers.
Ryan: Yeah. Well, I have seen like friends of mine purchased in Sydney and they went to an Open for Inspection and they were saying there were 3 couples each in like a corner of the backyard and there was like a silent auction going on at the very first Open For Inspection for this property. And so the real estate agent was going around to each of them getting offers, higher and higher offers off them. That was rare, like that was obviously during the massive Sydney boom and like the frenzy going on there. But I definitely understand the benefit of having lots of people around and you force people to make a decision faster when they think there are other people interested in the property versus if they are the only one. You know, “I will kind of take my time. See how it goes.”
Daniel: That is it. You can play a little bit more hard ball but I mean, at the same time appointments can be really good too. If you are someone who does not want time-wasters and you do not want the neighbors coming around. A lot of people have a thing about that. Whereas me, personally the more the better. Just bring them through, it does not bother me. But yeah, if you only want serious buyers, appointments are a great way to do that because people will not tend to make an appointment unless they are genuinely serious about a property.
But at the same time some people think that a little bit too far on for them as a first step, like if I do that thing maybe the agent is going to hound me or keep contacting me and things like that. So it is something that a lot of people with higher end properties will tend to choose, obviously the appointments – you do not want people who are just sticky-becky but do not have the money to spend if you have a million dollar property and things like that; so, each to their own.
Ryan: So, Open For Inspections if you are selling your own property, obviously you will be doing the Open For Inspections yourself, is there any advice you can give people if they are going to be holding Open For Inspections, about how to run a successful one, what are some things that you need?
Daniel: Yeah, absolutely. And that is something once again, we take much true because yeah, a lot of people are generally a little bit nervous about this. I think it is going to be hard because they have not done it before. I know, when I did my first one years ago when I sold my very first property myself, I was nervous as hell. I thought. “Wow, this is going to be scary.” After 10 minutes of doing it I was just like, “Wow, this is actually really easy.” All you do obviously is take the same approach as your agent, but just be honest. And when people come to inspect the property, I guess I would always suggest – I guess anybody as well, to just be honest with the person who is coming, say look, “Hi. My name is Daniel.
I am actually the owner of the property. If you have any questions about anything, be sure to come up and see me. I can definitely help you out.” And obviously, we give our clients as well an open home register so you can take the name, details, contact numbers form people, also make a note if they say they have interest or request the contract, who that person was. And it makes everything…
Ryan: Is this like a sheet of paper where you put people’s details on?
Daniel: Yeah, absolutely. That is all part of it, you know. You expect it including guide people through the process. The other thing that we like to do to prepare people for these is give them the questions that buyers are going to ask them because buyers would generally always ask the same questions as far as it might be: how long has the property been on the market? And usually there are ulterior motives when everybody asks this questions, it is not like they are just being friendly. They wanted to know how long this has been sitting there, how desperate are you, pretty much, to sell it, so they are asking.
Ryan: How much money are they going to share with you, is the real question.
Daniel: Absolutely right! And so this is what we want to arm people with those questions because everybody always asks, I ask them myself. And you just wait until you hear obviously, some agents will give away too much information, offers are better and then they say too much. But obviously I want to help people answer those questions the right way.
Another one that people might ask is: have you had any offers on the property and things like that. Agents would tell people exactly what they are, and you go like, “Okay. I know what that is and I now will have to offer too much higher than that,” or it might be, “What is the lowest amount you will accept for the property,” and things like that. There are always low-ballers out there, so we want to make sure that we prepare our clients for those questions and how to answer them in the best way possible.
Ryan: What do you say if someone says to you what is the least you will accept for a property? What is a good response for that?
Daniel: I usually am a little bit of tongue-in-cheek for this, I like to have a little bit of mock around with people and just say possible something like “Probably not as low as you would hope,” and just have a bit of a laugh at it. And look, if you say something like that they usually have a bit of a chuckle and you can just get back to another conversation; or you might just say, “Probably not as low as you would hope, but obviously the price is whatever you have it listed for. Look, I am happy to entertain you, any serious offers around that.” And if you say something like that, obviously it puts them at ease. You have to give a little bit of a joke, it takes the seriousness out of it because they are playing the game to; it is what you have to remember so, want to obviously be part of that and just engage with them.
Ryan: Yeah, and so you do not want to give too much away. You do not want to say, “Actually, I will sell it for $100,000 less than what I listed it for,” you do not want to tell them that. You just want to pique their interest. You are kind of just not really answering the question.
Daniel: Absolutely! Ultimately, my rule for this – it is a rule for any negotiation, you never want to come up with your number first, because my number might say, “I want $470,000 for this property.” Maybe I will go lower than $470,000, but before I said that, you might have been happy to pay me $480,000. We just never know; so you may just have saved yourself $10,000 because I gave my number first. So as a seller, you never want to give your number first. Obviously, people are aware of what the property is listed for. If they did not see any value in that price it is listed for, they would not be there in your open.
Ryan: Yeah. So with the Open For Inspections, some advice that I would give people is go to a few Open For Inspections and just see what the real estate agents do. See which ones are good and basically copy them, most real estate agents tend to just stand at the door, at the kitchen and they have the clipboard where they get people’s details as they come in. What sort of follow up do you recommend people do like after an open home, if you have grabbed people’s names, emails, phone numbers. Do people do follow up? I can imagine people would be pretty nervous about calling random strangers.
Daniel: I am glad you asked that question Ryan, that is a great one because it sees something that people want to know about like, “Should I do this or should I not?” And I guess there are different motives for these 2. What a real estate agent does is that obviously, they are interested to know what a person thinks about the property. But that is not where the motivation for them stops. They are obviously thinking as well, “Okay, Ryan has come to have a look at this property.
I want to see what he thinks, obviously. But if he does not like that one, guess what, I am going to try and get him to have a look at something else I am selling. I will find out what position he is in. Maybe I can try and list his property if he has not sold yet. So they have a few different things of why they continue or why they do their follow up. My suggestion is for people is you have your open home registers and things like that that we provide and when you take a person’s details, I always put a little bit of mark on some people who showed genuine interest. It is the people that hang around, have a chat with you, ask what lots of questions, maybe they ask to come back for a second inspection or anything like that.
The people who are serious about that, I would generally make contact with them and just have a conversation as far as I might call up on a Monday or a Tuesday and say, “Hey Ryan, Daniel from – whatever is the address of the property, just wanted to say hi and see what you thought of the property. And if you have any further questions or you want to organize a second inspection or anything like that, just let me know. Here are my details.” Generally then, people will say, “Oh yeah, I do have a question. Actually, can you tell me about this,” or they will say, “Look, thanks very much. I am not really interested. Maybe the bedrooms are too small or something like that.”
So if you have that, I guess you just go in with a very low risk conversation; no pressure or anything like that, just about having a conversation. You will generally find out really quickly if that buyer is actually wanting to take another step as far as another inspection or talk price. So yeah, it is a pretty easy thing to do. My rule is if they show interest, give them a call. If they do not, to be honest, do not waste your time. If they are interested, guess what, they are going to call you.
Ryan: I think that is a great approach in terms of calling people because so many people would get nervous about calling people with probing questions like, “Hey, you came to an open house. I am calling you, what do you think of my property? Do you want to buy it,” these sorts of questions. But I like your way of approaching it. You were saying, “Look, I am just touching base. You came to the open home.
I just want to hear if you have any questions or want to book a second appointment.” You are not trying to force answers out of them. You just open the door, and if they want to answer you; I really like that. So, we have gone quite far through the process: listing our property, advertising it, we are having Open For Inspections. The next thing, obviously, is we got offers coming through. How do we – are we meant to receive those offers in certain ways? How do we deal with those offers and maybe will lead into some tips about negotiating as well?
Daniel: Yeah, absolutely. This is my favorite part. And in everything, everybody has their favorite parts; their business, and what they like to help people with. This is mine, I love helping people exceed their expectations when it comes to their prices of their properties. So getting to the office, as far as the office goes, I would generally suggest to people to do it this way because some people feel really comfortable negotiating in person or over the phone, like I do because I have done it a lot of times and I am happy to have that conversation.
I actually enjoy it these days. But maybe I have reached persons who get a little bit nervous about that and I 100% understand. Other ways I would suggest people when it comes to offers and you have someone saying, “Hey Ryan, look, I love the property. I would like to submit an offer for it,” we suggest all of our clients ask that offer in writing but just for our email. So and just going with something along the lines of this; so it might be, “Yeah Ryan, thanks so much. You know, if you are seriously interested in our property, out of respect to all the other parties we have interested; we are asking everybody to submit their offers to us through our email and we will get back to you as soon as possible.” And the reason I like doing it that way – I guess it is for a couple of reasons, because it takes the pressure off you as a buyer.
You know, the feeling that you have to negotiate with me on the spot; but also as a seller, it takes the pressure off me having to come up with a price right away. And in that way you get the offer, obviously it comes through, you can see and then chat about it with your family, whether is it close to what you need. But also, at that point in time, I want our clients to give myself a right time of call and we can work out the best strategy to then move that offer forward to hopefully a higher price.
Ryan: Yeah. Well, I think this is probably the point I think why most people do not sell their own property. They are confident enough that you can work out how to list their property, hire a photographer, even hold an open home, and in most cases I feel like a lot of people do that better than an agent, or they feel like they could do that more confidently than an agent because they know their home and they know what is good, etcetera. But yeah, when it comes to negotiating, I think that is where most people are like, “Ooh, that is just too hard for me. I am not good at negotiating,” so you guys, your service – you actually help people through that negotiation, which is really cool.
Hopefully you get a bunch of different offers in writing, in some cases I am guessing you will just get one. After you have received the offer, what kind of approach do we take to the person who is interested in our property to try and actually see what they are willing to pay for it?
Daniel: Yeah, perfect. Once you have that offer come through, some people might get an offer they had to start with, fantastic. We have to solicit your advice form, you would fill that out with your name and information of yours, your buyer details, buyer conveyance details. Forward that off to yours solicitor or conveyor, they will look after the process from that point on, you just keep in contact with them.
Let us say you have a couple of people – 2 or 3 people interested in the property at the same time, and they are all wanting to put offers in. It happens all the time. Once again, one of my favorite parts, often we help our clients, maybe set up even a sort of an auction kind of thing. We do our emails, there is no pressure as far as having to talk to people and do all these sort of things.
It is just about creating a strategy that gets any of those potential buyers to come up with their best offers rather than stuffing around, sitting on the fence game, “Here is $5,000 or whatever.” We want people to come up with their best and final offers so we can get the deal done quickly.
Ryan: I have seen this happen before, quite a few times where there will be a whole bunch of interested people in a property, and let us say there are 3 people that all want to buy the property. The real estate agent will say to them, “Look, about 3 people are interested. Here is what we are going to do. You have one opportunity to submit your best offer,” and basically they all submit their best offer, whoever gives the best offer gets the property. So, rather than going through an auction – each going out by a thousand dollars or something like that, you are getting everyone’s best offer all at once…
Ryan: And then you just give it to the person who you think has the best offer. And if that person folds down, then hopefully you can go back to the second person. Is that the strategy most people take?
Daniel: Exactly right. Yeah. It is not rocket science or anything like that. It is just about creating that that competition, the tension between buyers, where they have to take action and come up with their best offer by a certain point in time; or they do know at that point, then you know what, I might not have a chance to do this again. And that is when we do that – when we take that approach, I think it is really powerful because you get the best offers out of people and you just let them know that, “You know, I do not want you to overextend yourself, but just do not miss out on this property for what might be a hundred or a couple thousand dollars, if this is what you really want. And if you are going with your best price possible and you miss out, then you know you did everything you can to secure that property. And you could be happy walking away, we gave it a go.”
Ryan: Yeah. And then that is like, the people who are buyers are now doing a guessing game in their own head. “How much do I offer? How much is everyone else going to offer?” And they will tend to offer the maximum that they are willing to pay for the property.
Daniel: Yeah, absolutely. And we have some amazing results. Just to give you a bit of an idea, I had a client in Sydney where he had a townhouse. We had it on for – this was just in December last year. The offer was over $690,000 and we used that approach. We had 3 people interested. First was the open, and then we put this together on a Sunday. And by Sunday, 5:00 PM, he had one person come back with an offer of $696,000, they were at their limit. Another person was $707,000, and he was going to be happy with $690,000.
He though anything we get over $690,000, he will be stoked. The other person came back with an offer of $745,000. So it goes to show, you know what I mean. If we can create that competition between buyers – and that is what I love to do, then you never really know what one person is prepared to pay for the property. What I see value in is always going to be different from what you do. So let us see what people come up with.
Ryan: And that is the thing like, if you took an alternative approach where you had someone offer $709,000; and you went to the person and said, “Look, someone has offered $709,000. You need to offer more.” They might offer $715,000 or $720,000 or something like that. But it is unlikely you get up to $745,000. So, there are other circumstances…
Ryan: So, what about if you are dealing with just one buyer, like you have your property is on the market but it is not performing as well as you like. There is not as much interest as you would like. But you have one person interested in your property, I think that is where most people fall over in their negotiation because they feel like they are over barrel in terms of this is the only person interested in their property. They just have to take whatever this person is offering. What can we do in this situation?
Daniel: Yeah, absolutely. That is when it is all about that negotiation. It is about coming into a compromise that works for both you and the buyer. It is has to be a win-win situation for all parties involved. And I think that is where some people, they forget that a little bit. They think about, “It is just going to be all about me. And let us not have deals done.” It has to be something that I see value in but also you see value in, first to come to agreement and both be happy to proceed from that point onward.
So, generally it is a hard one to answer because it comes down to where the offer is . Let us just say it is a $700,000 property. I want $700,000, and you offer me $650,000. Obviously, we are pretty far away at that point, so maybe we do not come to an agreement. But at the same time, if I have a $700,000, I will probably be happy with maybe $675,000 or something. That is what I would be happy enough to walk away with. And the other people, obviously still at $650,000; and we might take an approach, it could have been something like, “Well, look.
We really want $700,000 for the property. Look, this is what we are prepared to do is maybe meet you halfway. If you can come up $25,000, we will drop $25,000. Maybe we can find some middle ground and we can get a deal done.” And I do like that approach because it is something where you are giving and so is the buyer. You are meeting somewhere in the middle. It is not just ‘you get to $700,000 – we are not doing a deal,’ because that is how you lose deals.
Ryan: That is also a better approach than if like using the same example, listing price is $700,000, they offer $650,000; if you then just went back to them and said, “Look,” they offer $650,000, “how about $675,000?” Then they will say, “How about $665,000;” whereas you go about the negotiation and say, “Look, really we want $700,000. You are offering $650,000. How about we meet halfway?” It is just like it already created that negotiation and comprise and so they are less likely to say $665,000 or something.
Daniel: Exactly right. They feel like they are getting a deal. They will feel like you have just got $25,000 off you. I do like that approach because it is a lot easier. It is not just hard, and then they put their back up and get, “No, I am not going to go past $660,000,” and things like that. So we do not want to make it difficult and I think often that happens in negotiations especially with agents because people are always worried that they are trying to take them for a bit of a ride. Whereas if we can take that out of it and just have a normal, honest conversation with people and just have a chat about it; often we can come to an agreement.
Ryan: Yeah. And so let us say we received an offer, we are happy, we are done with our negotiation, okay. Do we then just go to our solicitor and our solicitor organizes the contract to sign? What happens with like you have an initial deposit in a lot of states which enters the cooling off period and generally you have a 5% or 10% or something like that. Does that money just get paid to us or does it go to a solicitor? What happens with that sort of stuff?
Daniel: Once again, I mean it can vary depending on who you are using as solicitors or conveyances and things like that. Solicitors always have their own trust account so you can either use yours or the purchaser’s, no issues there. Besides that, there are other ways to hold deposit. You can always – if you are unable to do that, you can open up joint bank accounts to hold the deposits in say, between yourself and the purchaser where it is going to be signed to be released and things like that, that is another way. Some people leave their deposit into their own private accounts.
It all just depends on what you feel comfortable with, how you want to do it. But it certainly is not a hard process and your conveyance or solicitor will actually tell you exactly what you need to do and how it needs to work so that you are fully protected but so is the buyer, so everybody knows what is going on.
Ryan: Yeah, so this is basically what I wanted to get across to people is that this is not something to stress about. If you work closely with your solicitor or your conveyance, then they will advise you on this thing. They will tell you the right thing to do; that is right by the law, that you are doing everything correctly. And once you have gone through the negotiation, you got the price, hopefully the easier part for you anyway. It just kind of happen and you just need to stay on top of it.
Daniel: Yeah, absolutely! As long as you keep in regular contact with your solicitor or your conveyancer, they are going to tell you what exactly needs to happen, and where the sale is up to. Obviously, when the cooling off period ends, that is happy days. That means the sale has gone through. That is the big thing.
I think everybody gets freaked out a bit, “Oh wow! I am going to do all the signing, the contracts, and do all these, and get it drawn up.” That is the thing but now, it is not the case. We are employing professionals, your conveyancers and solicitors; let them take care of it. There is no need for you to stress about the details.Let them do that. You just make sure that you do what they ask you to do.
Ryan: Yeah. So I guess that brings us to the end of our process, right? The house is sold; you then work with your solicitor and your bank to receive the money. You pay off your mortgage; transfer the titles, etcetera…
Daniel: Yeah. Pop the champagne!
Ryan: Yeah, pop the champagne and then take the money and do what you want with it. And so, I guess coming back to your service which is YourHotPoperty.com.au, there are a bunch of websites out there where they do help people list on RealEstate.com.au and Domain.com.au. You kind of alluded to it throughout this interview, but what kind of makes Your Hot Property different from the other services out there where I can also list my property on RealEstate.com.au?
Daniel: I guess for us it is about taking a different approach to them. We want it to be as professional from start to finish as you can throughout the sales, so that the solicitors are making your property prepared correctly, making sure that you have a great understanding of what you need to do and how it needs to work, the step-by-step process to follow. But also, having us in the background as professionals to make sure that when it comes time to that offer negotiation time, that you do walk away with the very best price possible. That is what we want for all of our clients. And we also do not want to just list your property and have it and just advertise it.
I actually want you to sell it, and I want you to sell it fast and I want you to sell it for a great price. So I guess that is where we want to come from, be results driven, make sure that our clients are actually getting those results they want and getting away that private-sell feel, that is important for me. I do not want people – I do not want the whole process to be about you selling your own home. I want the focus to be on your property. And if we take that approach and we are doing exactly the same as any of the very best local agents in your area, if we do that, we have a great chance of selling your property for a good price.
Ryan: So it is kind of like a middle ground between hiring an agent versus doing it yourself. So you are still doing the open homes, you still do the negotiation, but you are there as the real estate agent behind the scenes. You are kind of like a coach or a mentor to the people that use your service and you can help them with negotiation and you help them with things like listing their property, things like signage and all that sort of stuff. Is that right?
Daniel: Yeah, absolutely. We call ourselves as virtual agent service. We are virtually there the whole way. We just obviously are not physically there when it comes to the open homes and things like that. But to be honest, you really do not need me to stand there half an hour and take names when you are more than capable of doing that, I am pretty sure, especially when you have an opportunity by I mean not doing those small parts of having to give out physical time to do them for you, but you have an opportunity to save what might be $15,000 or $20,000, and what would you rather do?
Ryan: And I like that because I think a lot of people do get put off selling themselves because they are overwhelmed by one or multiple steps throughout the process. But having someone there behind the scenes that can help you when you get stuck, who you can call back and point you in the right direction, yeah, it would definitely be helpful. If I ever want to sell my property myself, then I would definitely want that middle ground, like I would not want to be running solo, not having a clue and potentially missing out on tens of thousands because I was doing something wrong.
I would love the help of someone who does this as a job like you do this over and over, work with people over and over, and you can remind me and advise me on what to do. So, it is the best place people can check you out, just go into YourHotProperty.com.au.
Daniel: Yeah, absolutely. Yeah, go to YourHotProperty.com.au. Anybody who wants to find more about those 7 steps that we have just been through to get your property sold, if it works better for you, you can go to our website, which you can download. Check that out. That will guide you through those processes as well, exactly what we have been through today.
Ryan: Yeah. So that is it guys. If you want more information, head over to YourHotProperty.com.au. You can download that eBook called The 7 Steps To Sold, which is absolutely free, so thanks for offering that Daniel. And I hope that this has been interesting to everyone out there learning the process to sell your property yourself. I definitely know, after going through this interview, I am a lot less nervous about it.
I feel a lot more knowledgeable of the process of selling your own home, and I feel like I could that myself quite easily. Before this interview I thought that is something I would never do because it is just too hard and not worth it. And then after this interview I am thinking, okay, I feel like $10,000 to $20,000 savings, and I could potentially keep my property on the market longer; maybe even get a better price. It definitely sounds like something worth considering.
Daniel: Absolutely right mate! I appreciate you taking the time to have a chat with us and yeah, to educate people a little bit more about how it all works.
Ryan: Yeah. Well, I appreciate you coming on and showing your expertise in this as well. So that is from us today guys! Until next time, stay positive!