Private sale or agent sale?

by Alistair Helm in

I have often been asked a to whether it is better to sell your house privately or to use an agent. As ever with anything to do with property there is no single answer - certainly no right or wrong answer. It very much depends on the person, the property and the circumstances. 

I recall a number of years ago a real estate research report found that whilst around 12% of people said that they were planning to sell privately as compared to 40% who said they would definitely sell with an agent; a large proportion, close to 1 in 3 of the people surveyed said that they would probably sell through an agent but they may well try and sell privately first. 

I sensed at the time and still feel nowadays that this group - a third of all prospective sellers reflect a very commonly held view - give it a go to sell privately and if you don’t have success, fall back on the agent as they will likely sell it. It is interesting psychology really. You know that if you list with an agent you will sell your house, whilst to do it yourself has less certainty, but no real downside except for the time factor. Not an approach you would take with a legal matter or to fix your car, but far more likely reflective of home DIY work - give it a go and if you can’t do it, call in the professionals.

Certainly the cost of an agent sale is in itself a motivation to try a private sale, added to which is the full knowledge that as  agents rely on Trade Me for the bulk of their listings the site offers private sellers the same ‘level-playing-field’ on which to attract prospective buyers.

It is very interesting therefore to compare the approach private sellers take to the task of advertising a property as compared to agents on Trade Me in particular and online generally.

I recall a few years ago now noting how often private sale listings had far more photos and richer content description than those of agent listings. I believe on-the-whole this differential has almost disappeared as agents have ever more accepted the role of online as the pre-eminent form of advertising.

Just the other day however a perfect opportunity presented itself to make such an assessment - comparing the approach taken by a private seller and an agent. Unusually though this is for a property that is being marketed as a private sale after failing to be sold by an agent!

I became aware of the property when viewing the NBR site - the advert caught my eye as the image looked very much like an advert for a holiday home, but it was clearly a property for sale. An unusual placement for an advert - that is the kind of thing that caught my eye. The advert leads through to an excellent website - a wonderful presentation of the property built off a simple WordPress themed platform. The photos are excellent, mostly taken at night, they are emotionally engaging and of a very high quality.

The website is a consumate example of a professional and comprehensive presentation of the property, including 42 photos, a video, the LIM report and rateable value, details of school in the area and an insight into a recent registered valuation of the property. A building inspection is due to be added shortly. What more could a prospective buyer want in order to make an informed decision on this property before an inspection?

Doing a bit of research on this property brought insight into its marketing history - it was marketed by a real estate company with an auction date of 27th April, providing a unique opportunity to see how a private seller approaches the marketing of their property as compared to a real estate agent.

The presentation for the property in April is equally professional with 20 professionally taken photos and 2 very detailed floor plans (interestingly there is no floor plan on the new private sale site). The key difference is all the agent professional photos are taken in daylight whilst the private sale images are very moody night time photos which do add to the 'sub-tropical private paradise' sense of the property - which is a great positioning statement for the property marketing.

Aside from the comparison of the photo gallery for each presentation, I was fascinated by the difference in the way the same property was presented in the description between an agent and a private seller.

Below is the text of each starting with the private listing taken from the current listing on Trade Me:

Down a long private driveway opening up to a beautiful subtropical private paradise.The 2 steps and entrance way lead to 10mm industrial glass front doors

Bottom floor has 2 bedrooms.The master bedroom has ensuite, walk in wardrobe, extensive wardrobe & storage space, glass sliding doors leading to deck with spa, stepping down to one of the 3 outdoor living/dining spaces & pool area. 

Wooden floored hallway from entrance leads to open plan kitchen, dining area & step down carpeted lounge, with bifold glass doors on both sides leading directly to the solar heated pool. The heat pump is UNDER the flooring , with 6 vents distributing consistent warmth throughout winter, & air conditioning in summer

Just past the stairs (that lead up to 3 more bedrooms & bathroom, all with glass fronted sliding doors for wardrobe & storage) & you step into a very spacious sunny office/granny flat with bath/shower/toilet/kitchenette fully carpeted with underfloor heating in the main room. 

Sliding glass doors open out onto another patio, the other end has glass doors which bifold out making it entirely open. This office/granny flat has dual access, either through the house ( which has a 2nd door inbetween for added privacy) or through the glass doors accessed from the parking area.

The property is fully fenced so pet friendly for the smallest up to the largest of animals to roam/run freely due to the size of the land.

Garden lighting is activated by movement sensors, as does the many security lights throughout the property. House is fully alarmed with activation pads in the house and the office/granny flat.

This is a beautiful SUNNY PRIVATE OASIS right in the heart of Mt Albert.

If you love this property, it would be a pleasure show it to you. Please contact us for appointment to view. We have available upon request a Website showing a Video, Picture Gallery, LIM Report, Rateable Valuation, Registered Valuation, Schools in area, & a Building Inspection Report next week. AUCTION IS ON SITE 2PM THURSDAY 31 JULY. Many Thanks 

Here is the full text from the agents description from the agents website (Google cache) from April

Enter the private inviting driveway that leads to the rear impressive landscaped entrance, this property exceeds the WOW factor.

The glassed front entrance foyer of this impressive contemporary home beckons you to enter, giving you a glimpse of something special.

To the left a spacious light filled master bedroom with ensuite and walk in wardrobe. Flowing out onto a private enclosed spa pool area adjacent to outdoor pool and entertaining area.To the right a generous sized office.

Just past the office climb the stairs to three sunny light double bedrooms and a bathroom.

Return downstairs, down a small staircase and discover two huge areas of work from home office space, set up for business, or a granny flat complete with own bathroom and entrances.

Up to the main level, past the laundry and w.c. to the kitchen/dining which has a subtropical outlook encompassing the lush backyard with mature trees yukkas palms and plants.

Entirely private this flows onto a further entertaining area. The kitchen has integrated whiteware central granite work island and granite bench.

Adjacent is the step down lounge seamlessly opening on two sides to a fabulous swimming pool/entertainment area. The lounge has a woodfire.

The solar heated pool complex with tropical feel exemplifies indoor/outdoor living at its best.

There are so many more features in this extraordinary property we invite you to view this paradise in the heart of Mount Albert.

Open Homes Saturday & Sunday 1.30-2.30pm or view by Appointment

Auction - On site 27th April 2014 at 2.30pm

The first thing that struck me was how the agent description is effectively a commentary of a walk-through of the property - useful. However when comparing side by-by-side with the private listing the most striking difference is the use of features and benefits in the descriptions. I have highlighted what I see as contextual and relevant features and benefits in italics in each of the listings' description.

The agent's description totals 6 features and benefits, the private sale description totals 16.

I have often heard the comment made in the real estate industry that the best person to showcase a property is the owner. They know the house, they know the features and benefits and maybe this is a clear example that maybe of benefit to agents, to ask owners to write down a description of how they would communicate their own house in terms of features and benefits as part of the marketing!!

Can an agent achieve a higher price than a private sale?

by Alistair Helm in ,


This is an age-old question and one that will generate opposing responses based on the perspective of the responder. A few moments spent on the Trade Me forum category of real estate would have you believing that private sales were a viable option and given the projected saving of many tens of thousands of dollars in commission thereby seeing the seller better off than by using an agent; although they would be hard pushed to say that they achieved a higher selling price than an agent.

Conversely a conversation with an agent would generate a response reflective of the competitive tension that an agent can generate between competing buyers such that the agent will secure the best price which would be the highest price attainable in the market. The latter caveat being very important.

For like it or not, the fact is that there is no evidential way to prove that an agent can secure a higher price than a private seller. The fact is that the price attained for a property is governed by a unique set of circumstances that can never be replicated. There is no such thing as a ‘Control’ in real estate.

What I mean by this is that in the scientific faculty everything is evinced by a Control by which any experiment is measured. Testing of drugs, improvements in battery technology, new microchip technology all of which are assessed by a Control that allows scientists to say that this version B is x% better than version A.

In real estate this is not possible. No two houses are identical; for whilst they may be two identical apartments or two town houses or even two 3 bedroom family homes in the same street, each will be different as a function of their orientation, conditions or layout. Mix into this the very unique circumstance of the buyer pool that is so small for any property and you begin to realise that every transaction is a very unique set of circumstances that occur at a point in time and can never be replicated.

Think for a moment about the sale of a particular property. Could it achieve the same sale price a week later? In theory yes, but the probability is that it would not as the price that was achieved was a function of the buyer pool at that moment in time, a day later, a week later and one or more of those buyers might have exited the market having bought another another house and equally a new buyer or set of buyers might have appeared as they suddenly became ready to make a purchase decision.

So unlike the ability to set up an experiment to test price sensitivity for a consumer product in two supermarkets in different areas of the country to test demand the property market does not afford such controls. It is therefore impossible for anyone to say that they could achieve a higher price than anyone else. The price achieved for the sale of a property is a function entirely of two aspects of the property selling process.

Maximum exposure

The ability to achieve maximum exposure of the property for sale within the buyer pool is critical to engage and motivate prospective buyers to review the property. Any lost opportunity in this area is potentially the most damaging to the sale process and impact the sale and the sale price. Exposure is not simply being on the web, it also goes to the presentation of content with particular focus on the images of the property and how they are laid out.

Competitive tension

The ability to motivate the prospective buyer pool to actively compete to challenge one another to buy the property is key to a successful sale price. This does not assume that the only method of creating competitive tension is an auction although this can be an effective public tool to create emotional tension. A standard well facilitated negotiation between active buyers is just as likely to achieve a favourable result as would a tender. The key to creating competitive tension is the facilitation process which is in someways the greatest skill and attribute of a professional real estate sales person - the ability to maintain buyer interest and bring buyers literally to the table to make an offer and to be motivated to stretch to challenge competing offers so that the final offer meets or exceeds the expectation of the seller.

There is no doubt that the component of the property selling process comprising creating maximum exposure has in many ways been taken out of the hands of the real estate agent as the online medium is the aggregation of this exposure through sites like Trade Me Property and Realesatate, however to fully optimise the potential to achieve the best result for the seller the role of the agent is hard to ignore or dismiss as it would take a unique set of skills for a private seller to replicate this capability.

Could the agent boycott of Trade Me end up driving more people to private sales?

by Alistair Helm in


The old adage that ‘perception is reality’ could potentially be occurring in the minds of property buyers and particularly sellers in the Hawkes Bay and Hamilton areas of the country. For if you were a normal everyday property buyer or seller using your usual means to keep in-touch with the property market through email alerts and web browsing, what you would notice in these two regions is that there seems to be far more ‘Private Sale’ properties being advertised on Trade Me.

This increase in private sellers is the perception. The reality is that there are less agent listings. 

What the real estate agents undertaking this boycott need to appreciate is that their next client is not that likely to be reading this article (I actually hope they are) nor the other media outlets that are discussing this issue - their prospective clients are browsing the news headlines and then reading the weekly women’s magazines!

These clients pay no attention to the number of listings on any page - all they want are new listings. They continue to turn to Trade Me everyday in huge numbers to view new listings. There may be less new listings, but how are they to judge the reason for this?

They certainly are not likely to stop using Trade Me Property to browse property for sale - why should they? They have been doing it for years and in their minds eye nothing has changed. The site looks identical and new properties come on the market everyday. They are not conscious that there are less (in fact no) new properties from the likes of Property Brokers, Tremains, Lugtons, Lodge and Harcourts. What they do see is far more properties coming onto the market from private sellers.

Just compare the first page of new listings in the Hawkes Bay with a comparable region - say New Plymouth in the Taranaki. In New Plymouth the first page with 50 listings consists of 6 private sale listings - 12%. On average Trade Me property comprises around 16% private sale listings on average. Now examine the first page of 50 latest listings for the Hawkes Bay - 40 of the 50 are private listings - 80%!


To the average property buyer searching the site today the one thing they notice is less agent listings. Do they instantly think - "ah yes of course my local agent is boycotting Trade Me so I must switch across to" or could it be they think - "ah more people seem to be trying to sell privately, this must mean something, maybe when we come to sell we should try a private sales, after all everybody is doing it and it only costs around $400 which compares to 4% commission which based on the median price in the Hawkes Bay at $279,000 means a cost to me of $12,834 inc GST".

This is the second time in the past 12 months where I perceive that the real estate industry is maybe shooting itself in the foot - earlier it was their fondness of auctions that may be their downfall now it is their challenge to fees from Trade Me - chinks in their armour they may be; but sometimes death by a thousand cuts can be fatal!