First of all, understanding the process of a Private Treaty is important if you are considering going down this route. If done correctly it may present major benefits. Avoid paying Real Estate Agent commissions, marketing fees, open homes, settlement terms and deposits that aren’t very flexible. This page is dedicated to providing you sound information. Questions like ‘what is a private house sale?’ through to ‘how does the process work?’ will be answered. If you are on the page there is a chance you are on the fence about using an Agent. The information below can help you to understand the differences between selling privately and selling through an Agent.
A Private Sale is the transaction of a property between the purchaser and vendor without the use of a Real Estate Agent. This is known as a ‘Private Treaty’.
1. The purchaser and vendor of the property comes to an agreed price for the house
2. A sales and purchase agreement is drawn out, initialed and signed by both parties. Once mutually agreeing on price, deposit, settlement dates and further terms of sale. If you do not already have a blank sales and purchase agreement this can be supplied by your conveyancing lawyer.
3. Upon going unconditional the buyer’s agreed deposit is sent to the vendors lawyer’s trust account.
4. On settlement the outstanding balance is sent to the vendors lawyer’s trust account and is released to you, the vendor.
1. No Real Estate Agents. Real Estate Agents usually charge around $20,000 – $30,000 in commission for the sale of your house. Your Real Estate Agent will usually charge you marketing fees on top of their commission. These fees cover the advertising done on Trademe, Realestate.co.nz, New Zealand Herald Property Pages and other media outlets.
The average cost for this is usually around $1500 – $5000 for their campaign. Selling your house privately could save you from paying both these costs.
2. No Open Homes. Agents will hold a series of open homes across a 3 month period every weekend with usually 1 or 2 extra days during the week. Your Real Estate agent is likely to require you to leave the property whilst an open home is held.
This may range from 30 minutes to an hour. Often this may create stress and anxiety for the vendor having groups of strangers walking through their home.
3. Flexible Settlement Terms And Deposits. When selling your house privately you are in more control of your settlement dates and deposits. Having a flexible settlement term could be as easy as requesting a rent back option.
This may give you the freedom to make your next move your own terms without having to rush into things.
Traditionally after settlement you are forced to vacate your property immediately which can be very disruptive to your day to day life. Most Real Estate Agencies will require the purchaser to pay 10% of the purchase price of your property directly to the Agency’s trust account upon going unconditional.
This can pose as a risk for the vendor in the event the the buyer pulls out of the sale after paying this fee as the Agency will be the first people to be paid in full with vendor left on their back foot. Selling privately gives you the advantage to dictate how much you want the purchaser to pay and where the deposit will be paid to.
4. Certainty of price. Often there are tyre kickers in the market that may put an offer on paper however nothing is certain until it becomes unconditional. These types of buyers can be damaging to your marketing campaign.
When a property is under contract with a conditional buyer the opportunity is lost to engage in a contract with another buyer. Auckland House Buyer has a 95% success rate of moving through to the finish line. We pride ourselves in giving our vendors peace of mind and security to know they can move into the next phase of their lives.