Agent vs Private sale? Which is the best?
We live in a world where, increasingly so, developments in technology are cutting out the middlemen in most industries. Robo advisors help online users plan for their financial future, property platforms, like HouseMe, assist landlords with managing their own property rentals, and the current boom in online shopping platforms now facilitates consumers buying direct from their favourite suppliers, which makes an expensive retail presence for startup brands less essential.
Does this mean that we can and should be our own real estate agents – especially if technology now allows for it? Property Fox, for example, is a South African tech firm that has come up with an innovative model for selling property. Their Swift Platform enables residential and commercial property owners to list and manage their own property sales via the Property Fox site. Properties are then listed on the Property Fox website and on other online property portals in the country. Commission paid over to Property Fox on completion of a sale is a low 1.5% (including the R2 500 Swift registration fee).
With property listing platforms like Property24 and Private Property, and mainstream real estate agencies having monopolized the property sales and marketing arena for decades now, companies like Property Fox are attempting to provide consumers with an alternative solution. The tech startup has partnered with Lightstone, a property market intelligence company, to ensure accurate property valuations and add credibility to the Property Fox offerings and brand.
There are a number of pros and cons of selling your property yourself, however, which should be keep in mind when considering the estate agent vs private sale options.
The pros and cons of selling your property yourself:
Reduced Commission Fee
Pro: Estate agents in South Africa claim an average of 6.5% in commission fees for a successful property sale. Commission is not regulated in South Africa, however, so sellers could be expected to pay even more across to their agent for services rendered. This, together with 14% VAT owed to the Receiver of Revenue, and the other hidden costs involved in selling a property means that sales costs could begin to add up. In this light, being able to save on agent commission fees is a big plus.
Con: That being said, if you go the private sales route, you’ll have to do a lot of the work to market your property yourself, including arranging compliance certificates, collecting and dropping off relevant documents, setting up show times and showing potential buyers around your property. A conveyancing attorney will, thankfully, handle all the legal paperwork for you. If you don’t have the time to do all that is needed to sell a property, then using an estate agent might be the best option for you.
Consumer Protection Act
Con: According to the South African Consumer Protection Act (CPA), buyers are only protected under the Act if they purchase a home from a seller who regularly sells property. This does not include a private seller, a fact which may put prospective buyers off from buying a property directly from you.There are “subject to” clauses that buyers can include in their offer to purchase to put themselves more at ease about entering into a private sale agreement, while, as a seller, you should include a detailed suspensive clause in the agreement of sale to mitigate any risk on your side. As a private seller, you need to be well informed about all these protective clauses and have a seasoned transferring attorney at hand to help you get things right.
Pro: While some of the arguments against selling your home yourself include the issue of improper property valuations, startups like Property Fox have paved the way for this to become a non-issue (through their partnership with Lightstone, for example). Included in their offer is a portfolio of professional photographs to adequately showcase your property, as well as exposure for your property across other property sales portals, making your marketing job that much easier.
Con: disruptive property tech is still fairly new to the industry, which means it may take some time for startups like HouseMe and PropertyFox to build up the levels of brand affinity and customer trust that the more established real estate agencies currently enjoy.
As far as cancelling your bond with SA Home Loans goes after you sell your home, we have you covered. Visit our Info Centre for more information on what to do and expect throughout the bond cancellation process.BACK TO BLOG HOME>