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With recent interest rate rises, galloping petrol prices, and a downturn in the Sydney property market it is vital for vendors to maximise profits from the sale of their most valuable asset – their home.
According to Mark Farrugia of ComFree NSW, a company which helps homeowners sell their home privately without the need for a real estate agent, there are no guarantees when it comes to maximizing the value from the sale of your property.
"Getting top dollar in a slow market can be challenging, the most critical factors for getting the most profit from the sale process is accurate pricing, exposure to the market, and good home presentation," Mr Farrugia said.
"Cutting out the middle man (the Real Estate agent) is also becoming a popular way of putting more money in your pocket."
Over the next two editions, ComFree will be providing advice on what you can do to get a better profit from the sale of your home.
Consider 'doing it yourself'
By-passing an agent and selling your home yourself can save thousands of dollars in agent’s commissions and advertising costs. On an average Sydney home of $500,000 a real estate agent will generally charge between two and three per cent commission, which amounts to approximately $12,000, even excluding advertising expenses.
Mr Farrugia said there are now more than 2,332 homes being sold privately in NSW, either directly or through a number of private sales companies that help vendors market their home.
"Around three per cent of NSW homeowners selling their home are now avoiding being slugged the huge amounts agents charge in commission for something that is relatively simple," Mr Farruiga said.
"Companies such as ComFree can provide the same level or even a better service than real estate agents for a fraction of the cost.
"For $899 ComFree provides homeowners with information ranging from legal obligations through to how to get the best price and marketing tools such as signage and advertising.
"People that have sold through ComFree have reported that they have received a price equal to, or better than, the home price quoted by an agent and that’s not accounting for the thousands that would have been deducted in sales commission and advertising costs."
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Pricing your home accurately
Do your research. Understanding the local market is important in setting the right price and thus achieving the most profit from the sale.
Inaccurate pricing presents consequences with either under-pricing and receiving less than market value or overpricing and receiving no offers.
While many people have a reasonable idea of what their home is worth, ComFree recommends that sellers investigate comparable properties currently for sale and properties that have sold recently in the area.
"Attending inspections and auctions in the months before putting your home on the market is a good way to familiarise sellers with the market," Mr Farrugia said.
"If similar properties are listed with realtors, you immediately have an advantage with the ability to price your home below those listed, potentially sell faster and still walk away with more money in your pocket," he said.
The internet and newspapers are also great sources to research the market. Some useful online property reports include: www.homepriceguide.com.au; www.myhousevalue.com.au; www.propertyvalue.com.au. The Sunday Telegraph also offers a section called ‘Hot Properties’ which displays recent property sales and prices.
Get an independent valuation
If sellers are still unsure of the market value a licensed appraisal may be required. Before choosing an agent or deciding to sell the property sellers should get an independent valuation of the property.
"An independent valuer has no vested interest," says Farrugia, "so you can ensure that you are getting an unbiased appraisal."
Once you know the true valuation of your home then you can approach agents or private sale companies in your area. When they give you a price, ask them how they have reached that figure. They should give you a comparative market analysis showing you the sales of several similar properties in your area.
An independent valuation should mean you can recognise when an agent tries to win your listing by overquoting.
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