F6. Private Sale

  1. Private Sale

 As the name suggests a private sale is a sale that excludes an agent and is concluded privately between the seller and the purchaser. The seller is responsible for his own marketing and selling of his property which often leaves him at a disadvantage as he does not have access to the marketing budget and No contractual commitment.

  • No commission payable.

Disadvantages:

  • No support network as far as the sale is concerned. Estate agents network regularly with other agents, bond originators, bank officials, and attorneys.
  • Typically, no access to property statistics may lead to fixing a wrong price.
  • Limited exposure to potential buyers, which theoretically means your home will take ten to fifteen times longer to sell as agents usually have access to an existing buyers base, private sellers don’t.
  • Typically, the critical buyers you will encounter have not been qualified as far as finance is concerned.
  • The longer the home is on the market, the lower the selling price.
  • Perception by buyers of “private sale” is an overpriced property or there is something wrong with it/agents won’t touch it.
  • Typically, the selling/buying process begins AFTER the buyer leaves your home. I.e. contract negotiation, liaison with attorneys, etc. SO much can (and will) go wrong if this is not managed by experienced professionals.
  • Most buyers find it extremely awkward to negotiate or even talk directly with sellers & therefore avoid private sale properties.
  • The majority of qualified buyers are working with experienced real estate professionals.
  • Only Estate Agencies may advertise in local property finders and normal advertising costs in local papers are high.
  • Security and Safety: YOU ARE OPENING UP YOUR HOME TO ANY STRANGER OFF THE STREET.

Sellers have the option of using any of the above mandates when appointing an agent, however, you as the agent also have the right to choose which mandates you are prepared to work under. No seller can insist that you accept a certain mandate and at the rate of commission, he is willing to pay. As an agent, you need to have decided your own worth and value before entering into an agreement to market a property.

Other possible terms to be included in the mandate: (not included in a Golden Homes mandate)

  • Acknowledgement that the agent acts for and on behalf of the seller.
  • The agent will keep confidential information which the seller requires to be withheld from potential buyers (like the fact that the seller is emigrating and is desperate to sell).
  • The agent will submit all offers to the seller.
  • The agent has valued the property.
  • The agent submits the proposed marketing and advertising strategy to the seller.
  • The agent submits the proposed marketing and advertising strategy to the seller.
  • The agent submits proposed advertisements to the seller for approval.
  • The agent will furnish the seller with a weekly written progress report and a list of prospective buyers and also their comments.
  • the agent will, after the conclusion of the agreement, submit the document to the conveyancer and furnish the seller with a weekly written progress report on the transfer procedure; and
  • The agent shall make good any damages which were incurred by the seller with the seller’s property was under the custodianship of the agent (for example on show days).

Important to note:

If a seller has given an “open mandate” to any agent/agency he needs to cancel this (even verbally) if he then signs a sole mandate with another agent.

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