Do it yourself:
(or DIY) is a term used to describe building, modifying, or repairing of something without the aid of experts or professionals. The phrase "do it yourself" came into common usage in the 1950s in reference to home improvement projects which people might choose to complete independently. Source: Wikipedia.
Recently an article appeared in a major newspaper promoting the benefits of property owners selling privately without the use of an agent.
A very one sided argument was put forward claiming both owners saved thousands and were far better off.
I thought it would be worth exploring this argument.
It is true we can all save money by doing things ourselves. Granted.
Examples of how we could save money by DIY projects.
1) Cooking- Restaurants and cafe’s make a living by not only serving food, but providing an environment and an experience that overall gives its clients an experience that they will remember. Of course you can buy a steak at Coles and cook it at home. Many people do that and there will always be a place for that. Likewise there will always be a place for fine dining and dine out services.
2) Making coffee at home- A coffee costs less than 50 cents to make and yet I pay $4.80 for my typical brew each day. WHY??? If all that mattered was saving money, I could make one at home, yet cafe business flourishes. Again, it is the whole experience people pay for not just the cost of the coffee.
3) Make clothes- You could knit you own socks and a jumper, make shirts and even your Dockers beanie or Eagles scarf. Why don’t most of us???
4) Car repairs- Change the oil yourself, detail the car yourself, do minor repairs. Yes we could all do that and no doubt would save untold dollars.
5) House extensions- In theory, we could all build our home. Bunnings, TAFE, Home Ideas Centres run courses how to "owner build". The savings could be as much as 25% on a typical home and that could be hundreds of thousands of dollars for some buyers. Yet the percentage of owner builders is relatively small, why is that?
6) Grow vegetables-Many of use grew up where the veggies were grown in the back yard. Tomatoes, lettuces, herbs. Many probably still do this and what a great idea. Even the local Applecross Primary does this. Could we survive purely subsistently growing our own veggies, maybe? So why don’t we all do that?
7) Dentistry- I reckon you could pull your own tooth if you were brave enough (Don’t try this at home please). Last time I went to the dentist, it is not cheap. I have never thought, gee I better save some money and pull my own tooth. Mmmmmmm? Interesting. Dentists receive years of training and are professionally trained, with the right tools.
8) Eggs- Grown your own eggs in the backyard with a chicken coup. Easy to do, I have done it. Fun, lots of free eggs. Why don’t most of us do this today???
9) Tax- It is easy to do tax returns right? Many of us might do that. Why do most professionals get Accountants to do their tax returns??? Accountants have had years of training and are abreast of all the latest laws and legal deductions.
RISKS- for every story that can be produced of an ecstatic private seller, I could no doubt show you one that tried it and ended up sold after they appointed an agent. Most people could sell themselves, but not with the same result or experience. Agents are experts at their craft.
ANYWAY the list is endless. Of course you are allowed to and can do most things in life yourself. And YES you will sometimes save money.
The reason we don’t do all of these things is simple.
1) We are all too busy.
2) Let the experts do what they do best and let me do what I do best. That is called the 80/20 rule (or the Pareto principal) which is that 80% of all energy is wasted and 20% of what we do produces results. In other words, specialise and be effective and productive.
No one is a jack of all trades. Nor should we want to be.
There is one fundamental flaw in the argument of selling a home yourself that simplifies the whole point. Here are some of the reasons why most sellers choose a professional agent.
17 REASONS WHY YOU SHOULD USE AN AGENT
1) There is no evidence that private seller save money. Agents through their marketing and negotiation skills are trained to create competition, position the property correctly and get a higher sales price. I believe that most buyers will resent letting the seller save on a selling fee and the buyer will want the discount anyway.
2) Agents have spent years in many cases (and many have literally negotiated hundreds of transactions). Most sellers might sell a few houses in their lifetime and cannot possibly have the experience of a good agent in this process.
3) Even the best agents do not sell their own homes, just like a doctor does not operate on themselves and it is said that a lawyer that represents themselves has a fool for a client. The best agents get the best local agent to sell their homes. There is a reason.
4) Negotiation is the most underrated value an agent adds. It is very hard to be unemotional and objective when negotiating your own home. Most sellers are too close to the process to do it as effectively as a seasoned professional agent.
5) Agents don’t have a conflict of interest. How can a seller be able to be objective when they are the prime beneficiary of the proceeds of the sale?
6) Some buyers don’t want to deal directly with a private seller. The buyer likes to negotiate without it becoming personal.
7) Agents have professional indemnity insurance protecting all consumers from misrepresentation.
8) Agents have to comply with the Trade Practices Act, must ethically advertise a property and fully disclose everything relevant about the property that is known. It is much harder for a buyer to have recourse than when a professional agent is involved.
9) Agents have the experience to write the offer and acceptance contract, so as to protect all parties.
10) Agents will know the current market as they have dealings every day with buyers and sellers. The market can change daily and private sellers will not know what is happening like an agent will. An agent has to work in the market after the sale is made, so has a reputation and legal issues to take into account. A private seller will take the money from the sale and vanish, sometimes out of town. Any damage (Things not as they seemed or were expected once settlement occurs) done is of less consequence to a private seller, whereas an agent would have to deal with the issues involved.
11) There are over 12 ways to find buyers. Even though 50% plus of buyers may come from the internet, there are still other ways to find buyers that private sellers do not have. In this way it is a large gamble as the best way to get the highest price is always to have more than one buyer competing at the same time. Therefore all methods to find buyers should be employed to get the best result. It is very common that a buyer does not buy the property that they first enquired on.
12) Agents get wholesale print media rates that are passed on 100% to sellers that use the services of an agent.
13) Agents have other listings to “cross sell” onto an owner’s property. Some 70% of all sales occur through “cross selling”. A private seller only has one listing to attract buyers.
14) In Australia, the overwhelming vast majority of real estate sales occur though real estate agents. The reason is that they add value in the skillful marketing, finding, negotiating and closing buyers. They add value by maximising the sale price higher than would be the case if there was no agent.
15) Agents have access to the Real Estate agent website Reiwa.com.au which currently is the second highest traffic site in WA.
16) Once a deal is done, there is a lot of work to manage the steps right up to settlement. Many buyers get “buyers remorse” and the sale is not made until the money is in the seller’s bank account. This is a big underrated job of a professional agent.
17) Stress- Selling a home has been rated as one of the most stressful experiences we can encounter, right up after death, loss of a loved one, divorce and bankruptcy. Why would you attempt to put yourself through this stress when there are experts that can help you navigate through the process with relative ease?
A good agent will not only help you get sold, will get you a higher price in most instances through their experience and skill set, and do it with less stress.
If you have had a bad experience with an agent, that is true in any profession that there are some operators less skilled than others. Keep talking to agents until you find the right one. There are plenty of top agents.
Thank you and see you in the market place...Ian Barnes