How Do You Buy a House From a Self-Seller?

For Sale By Owner - the kitchen

This property’s owners decided to strike out on their own
Photo by owner

Recently I had the pleasure of dealing with two lovely vendors, who were selling their property without a real estate agent.

Many buyers would wonder how this type of sale works, and many prospective vendors would question whether it’s the best way to sell a property.

From a buyer agent’s point of view, this type of sale certainly has its advantages and disadvantages, and this particular sale was no exception.

But the interesting thing to note was just how well suited the property was to my client’s brief and how we were able to negotiate a fair transaction with a strong win-win.

I spotted this property online and saw the familiar ‘for sale by owner’ icon. I wondered whether the vendor would be approachable, willing to deal with a buyer’s advocate, realistic about price and experienced enough to cope with a negotiation.

Regardless, the property was ideally located in a block I was familiar with, and the unit seemed well presented so I wasted no time in organising an inspection.

The Advantages and Disadvantages of Selling Without an Agent

The best time that could suit my vendors was 7.30am; no surprises to me because they had full time jobs and couldn’t cater to normal daytime inspections like a real estate agent could.

Is this a weakness for a prospective vendor who thinks they can do it on their own? Absolutely. Not all buyers get excited about driving to Moonee Ponds for a 7.30am inspection time.

“I wondered whether the vendor would be approachable… and experienced enough to cope with a negotiation.”

The property didn’t disappoint. It was one of 12 in a nicely presented, older style block of flats on a large, leafy allotment, barely 300 metres from Moonee Ponds Station and exciting Puckle Street shops and cafes.

The size of the unit was great and the outlook from the front bedroom and lounge was onto the nicely presented and generously proportioned front yard. When I saw it featured a secure car park and a delightful private balcony overlooking the front garden, I had to pounce.

For Sale By Owner - the bathroom

The combined bathroom and laundry
Photo by owner

Warding off the Competition

Had I waited until the Saturday open for inspection I may have had more competition; but knowing the January market, I was reluctant to conform to the weekend open time table.

January has been a frustrating month for buyers in the Melbourne market because stock levels have been quite low. The run up to Christmas saw a lot of sales in 2013, and despite some enthusiastic auction listings for February coming onto the online search engines in late December, the reality is that there is limited stock available for January sales.

“I made a deliberate decision not to ‘play the game’ and throw down an insulting low offer as my starting bid.”

Plenty of agents have resisted expressions of interest from buyers who have been keen to purchase auction properties prior to the scheduled auction date, and for good reason.

With lower numbers and keen buyer interest, many agents are keen to have their day in the sun (and the benefit of the exposure to the market over the course of the auction campaign).

So for my happy buyers, this property ticked the boxes and I was able to see it before the crowds did.

For Sale By Owner - the entrance

The property was located in a neat block of units minutes from Moonee Ponds Station
Photo by owner

Negotiating With the Owners

I made a deliberate decision not to ‘play the game’ and throw down an insulting low offer as my starting bid. Agents adapt to (and almost anticipate) buyers who exhibit that sort of tactic; however, for these vendors, the property had been their home and they had gone to serious effort to present and sell the property.

A nasty offer would not only have offended them emotionally, but would have got them offside and could have blocked my chances of dealing with them subsequently.

“Knowing the January market, I was reluctant to conform to the weekend open time table.”

That said, I was not keen on offering the asking price and paying a premium either. I wanted to secure it for a fair price and in the absence of competition.

Careful research, particularly taking into account recent sales in the block and the surrounding area, was crucial to my assignment success.

I presented the data in a format that gave them comfort that my offer was fair. Not only that, but I was prepared to be flexible on my terms to suit their future plans. 

The Final Result

We finally shook hands at the only price I submitted to them and not only did we agree on mutually agreeable terms, but the vendors offered us the opportunity to photograph and advertise the property for rent prior to settlement.

My clients can look forward to a great growth asset with anticipated rental returns above 4 per cent gross per annum, and the vendors can rest comfortably knowing that not only did they achieve a fair price, but they executed the sale professionally and within a very short timeframe.

I am never one to endorse a residential property sale managed by a vendor. It is stressful, emotional, daunting and something that an inexperienced person could really make a mess of.

But in this case, I was quite impressed. Maybe our vendors could consider a career in real estate?

For more information about Moonee Ponds, read our suburb profile here.

Sales and Growth for Moonee Ponds

Photo: Pricefinder

Points of Interest in Moonee Ponds, Postcode 3039

The Clocktower Centre
Moonee Ponds Primary School
Moonee Ponds West Primary School
Moonee Valley City Council

About the Author

Cate Bakos is an independent buyers advocate and qualified property investment advisor and has proudly been a property investor for 17 years. Cate has a Bachelor Degree in Chemistry (Hons), Certificate 4 in Property Services (Real Estate), a Certificate 4 in Financial Services (Mortgage Broking). She is also a licensed real estate and a Qualified Property Investment Advisor accredited by Property Investment Professionals of Australia (PIPA).

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