Times are tough, especially for sellers of residential property. There are no buyers and 'for sale' signs litter every neighbourhood. Should you sell your house privately or make use of a professional estate agent?

Of course, depending on whom you ask you'll get vastly different answers. It's best to study the arguments and, considering your personal circumstances, make up your own mind.

The advantages of a private sale

• You won't be paying commission to an estate agent. This might enable you to drop your house's asking price, giving it a better chance to sell. Especially when there's little equity in your property, avoiding this expense could make a considerable difference.

• Nobody knows your house as well as you do and selling directly ensures that buyers always have correct information handy. An agent won't always be able to answer every question a buyer poses.

• Many potential buyers have become cynical as details of some estate agents' shady business practices come to light. These buyers might prefer to deal with the home owner directly.

• The internet has made it much easier to market your own home. There are many websites that allow private sellers to market their houses for a small fee.

• In the past you needed expert advice to determine at what price to market your home. Nowadays there are websites (click here to find out what your property is worth) that allow homeowners to discover average house prices for their area or the precise price that similar properties have been sold for.

• Instead of worrying about how little the agent is doing to find a buyer the private seller knows what is going on throughout the whole process.

• Some people love the sparring that is involved in negotiating and excels at driving a hard bargain. These people might find that cutting out the agent results in a quicker sale.

Beware trying the DIY route when it comes to selling

In these more difficult economic times sellers of homes will be tempted to go the do-it-yourself route and save on agent’s commission. But, says Lanice Steward, MD of Anne Porter Knight Frank, all her experience in property indicates that this can be disastrous.

"There is now considerable propaganda in favour of going it alone with the help of private seller organisations and a perception in some circles that using them will result in a better price. I must say categorically that this perception is based on misunderstandings of the role of the estate agent and every case that I have come across stems from ignorance of what the agent does and a lack of appreciation of what he or she can bring to the negotiation and sale process. It always amazes me that people who would never dream of trying to dispense with a doctor to diagnose or treat their own ailments or with a mechanic to service their motorcars somehow or other persuade themselves that they are qualified to market and sell their largest asset."

DIY home sellers, said Steward, often begin their pricing or valuation investigations by visiting show houses in their region. Those, she said, will almost always be overpriced, but without the relevant data to assess their real value in the current market, the seller all too often then follows the trend and overprices or, in exceptional circumstances, under-prices (because one or two nearby homes have been wrongly priced).

Very occasionally, said Steward, the DIY seller 'gets lucky' and finds a buyer who puts in a high price.

Far more often, however, they find that :

• Their DIY advertising costs are high and eat up their assets.

• The possible buyers haggle and attempt to downgrade their price by pointing out drawbacks and defects.

• The emotional strain of looking after people tramping through and criticising their home wears them down.

• Many apparently serious buyers are in fact chancing it and know that their bonds will not be approved.

• If and when they find a genuine buyer, they lack the legal and negotiating skills to get a good deal.

On the other hand, said Steward, when an agent is from a reputable company and is trained he or she will have at his disposal convincing market research which will enable him to justify and explain his valuation. He will also be emotionally detached and able to handle offensive, insensitive bargain hunters. He will be able to benefit from participation in the agency’s large-volume advertising and through his long association with the area he will have a potential client list that will include many of those currently looking for property in that area, at that price, who may well have already been shown other homes on the agent’s list.

"Above all, perhaps," said Steward, "when the all-important negotiation process begins the professional agent will recognise the pitfalls and traps to avoid and, when it comes to drawing up the offer and later the deed of sale, he will do this in a way that protects both parties from subsequent surprise or disappointment."

Certain details in the deed of sale, said Steward, can be contentious.

Giving just one example, every deed of sale at APKF will include a list of all possible defects such as damp or a leak in the roof which the buyer must acknowledge and accept in writing.

The agent will, if necessary, also arrange the beetle and electric certification. This type of extra documentation makes for a clean, satisfactory deal but is not available to DIY operators.

Then a good, professional agent will work closely with selected bond originators to present the application to the bank in a way that will make it acceptable.

Once the deed of sale is signed the trained agent will continue to be involved, chasing up the legal conveyancers (and making sure they get the guarantees).

Steward also reminded aspiring DIY sellers that if they go it alone they will have to work through an attorney in drawing up the deed of sale, whereas in a 'mature' agency this will be provided as part of the service, their documents being legally sound.

"The bottom line, therefore," said Steward, "is that although on the face of it an agency commission may seem high, in reality it is not — and paying this money will almost always get you a better and sounder deal."

Finally, added Steward, sellers must accept that buyers will almost always trust the agent of a big brand company, whereas they will be worried and distrustful of a DIY operator.

On page two: Tjaart van der Walt, CEO of the RealNet estate agency group, gives some reasons not to be a private seller…

Do you think it's better to sell your house privately or would you rather make use of a professional estate agent? Add a comment below...

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