One property to sell.
A private seller usually has only one property to sell, and most buyers
want to see at least five or six suitable properties before
making a decision to buy.
What's the address?
Prospective buyers, when calling on an ad, often want to
know the address of the property so that they can drive by. Whereas a
realtor can provide several addresses of properties for the buyer's initial drive-by... the private seller
can give only one and quite possibly will never get to meet the buyer.
Hard to follow-up.
Let's suppose that the seller is successful in getting a buyer to have
a look at the property. Subsequent to the viewing the buyer will
obviously need time to think. In most cases this will be the last time
that the seller will ever see or hear from the buyer.
At this point it will become very hard for the seller to follow-up.
Most buyers will not volunteer their phone number to the private
seller. On the other hand, bargain hunters will give their phone number to
the seller without any hesitation. It is part of their
strategy. Their plan works like this... the urgency of the seller is
judged by whether or not the seller will phone the buyer for feedback.
If the seller does not phone, the buyer will not phone.
If the seller does phone, the buyer will consider themselves to be in a
better bargaining position with every call that the seller makes.
Realtors do not have this follow-up problem, because if a realtor makes
a call it is not a sign of urgency of any particular seller.
Direct negotiations.
Negotiating directly successfully tends to be very hard, even for the
most experienced of negotiators. In the sale of a property a
substantial number of items require negotiation.
Of course price is one, but other important items include for example
deposit monies, inclusions, exclusions, suitable transaction dates,
moving dates and various other terms, conditions and agreements to
make the sale a success. Direct negotiation is especially challenging
for the seller because the seller tends to be or is anticipated to
be emotionally attached to the property. This often results in the
buyer not 'opening up' to the seller. In addition... the seller
has the distinct disadvantage of having only one specific property
to sell, whereas the buyer has many other options.
Legal risks!
The vast majority of buyers find the risks of dealing with a
private seller prohibitive. Buyers for the most part prefer to be represented by
a professional full time realtor. This service is free and professional transactions
are covered by Errors and Omissions Insurance. Private
transactions do not have any guarantees of this nature and
consequently not only private buyers, but also private sellers
put themselves at risk legally.
Security issues.
Many private sellers have concerns about personal
and property security. Such feelings tend to be somewhat reinforced by the fact that
most buyers obviously do not like to give out personal information about
themselves to the seller. Private sellers may find that conducting
showings of their own property can be difficult and emotionally charged.
One side effect of this is that during a viewing, legitimate prospective
buyers may be too much focused on the private seller and too little on
the property. End result, no sale.
Qualifying & penalties.
To qualify a buyer, financially or otherwise, is practically impossible
for any seller. Most buyers are reluctant to disclose personal
information (especially financial information) to a seller.
Also... if the seller has an existing mortgage with prepayment penalties,
such penalties can sometimes be reduced (or eliminated) if for example
the buyer agrees to arrange their new mortgage with the seller's
finance company. This money saving possibility
is generally lost in a private sale. On the other hand an experienced
realtor, being a third party, can often make such an arrangement work
for the benefit of all parties.
Substantial deposit.
If the private seller does find a buyer who is willing to
enter into a contract, most sellers will find it difficult to get a
substantial deposit from a buyer to secure such a contract. Realtors do
not have this problem, because deposit monies are kept securely in a
special trust account.
General promotion.
Most private sellers have only three ways to attract buyers.
1. Classified advertising (expensive, phone tag between buyer & seller)
2. Open houses (anybody can come through for various reasons)
3. For Sale signs (buyers must drive by to see it)
Enforceable contract.
Another major stumbling block for private sellers
and their buyers is the preparation of a good enforceable contract of
purchase and sale. Contract law is continuously subject to change, even
licensed realtors find it challenging at times to keep up with
frequent legal changes and new legislation.
Property inspection.
Most buyers nowadays make their offer conditional
upon a satisfactory building inspection.
(not to be confused with the bank appraisal)
A professional home inspector checks the property for deficiencies.
Private buyers have a tendency to use home inspection results
for re-negotiating an already negotiated contract. When a
property is sold professionally re-negotiations are very rare, because
a Property Condition Disclosure Statement is presented to the buyer at
the outset of the negotiations and is made part of the agreement,
and an experienced listing agent will simply disallow unreasonable buyer demands.
A real bargain please.
Despite the risks involved some buyers will consider buying privately,
but generally only if they can get a real bargain in the process.
|
![[icon for web sites bcrealtor.com and bcrealtors.com]](images/bcreal32.gif){kind=small}
![[Home]](images/homeicon.gif){kind=small}