Why it's worth thinking about selling your home yourself

Selling your home can cost a lot of money, the biggest outlay being the real estate agent's fees.

With these typically around 2% to 2.5%, sometimes as high as 5%, if you sell for $500,000 you will fork out $10,000 to $25,000 to the agent handling the sale. Is this good value for money?

Or are real estate commissions exorbitant, as former real estate agent Mark Schneider says in his new book, Dodging the Real Estate Rip off.

People should at least consider the DIY route, suggests Schneider, conceding it's not for everyone.

But if you do decide to be your own real estate agent, and do it competently, you are likely to achieve a better price than an agent, he says. Why?

"Because at the heart of the real estate agent's profession is a huge conflict of interest. The real estate agent's professional interest is to sell your home at the highest price for you. However, their personal interest is to simply sell it and collect their commission.

The agent's interest is to sell as quickly as possible, collect their commission and move on."

Other furphies around selling your own home identified by Schneider include:

1. The fact that buyers prefer to deal with real estate agents and won't buy from a private seller, when in fact the opposite is more likely to be the case.

2. Private sellers can't get their homes listed on internet real estate sites. Schneider reveals in his book how you can do this through a third party for a fee.

3. Real estate agents are superior negotiators. Schneider points out that real estate agents get no formal training in negotiating and no one knows your house better than you do. But, he concedes, you do need to maintain a certain detachment.

4. Real estate agents have buyers lined up. Maybe they do, but as long as you market your home well, serious buyers will find it.

5. It's illegal to sell privately. Of course this is not true anywhere in Australia. So, yes, many people do have the ability to be their own real estate agent but you also have to have both the time and the drive to do it well. If you are holding down a full time job, spare time is usually scarce. Do you want to devote it to all the tasks you need to undertake to sell your home?

If time is tight but you still want to do it yourself, there are places you can go for help.

For example, forsalebyowner.com.au offers a service that includes listing your property on realestate.com.au, Australia's biggest real estate website (and an option to also list it on domain.com.au) until it's sold. It also provides a "for sale" sign, property reports detailing prices in your area - including sales data for your street and suburb - printable brochures and specific help from a team of experts for a fee of $699 to $969. There are many other websites offering similar deals.

You will still have to decide your asking price, how to style and show your home, conduct "open for inspections", negotiate with potential buyers and close the sale. Pricing is one of hardest things for many of us because we often believe our home is worth more than it is.

You need to stand back and look at recent comparable sales and maybe ask a couple of agents to give you their appraisals (but then they will badger you to get the listing). If you are still unsure, you could engage a registered valuer who will charge a few hundred dollars.

If your home is in a hot market, and particularly if it's unique, you may not want to disclose an asking price. In this case you can always go the tender route.

This is where you ask interested parties to submit their best price by a certain date and, if you have a number of buyers who don't want to miss out, it may get a great price. Or, of course, it could fizzle. But if you make it clear you will not sell unless you reach your undisclosed reserve, you can try again with a more straightforward pricing strategy.

If you do decide to DIY, Schneider's book is full of great tips and well worth a read. Published by Out of the Box Publishing, it is due out in November. The paperback is $19.95 and the ebook $9.95.

Check fixed rates

With interest rates at historic lows and continuing growth in the housing sector, the mortgage market remains as competitive as ever. Now is a good time to review your home loan; a change may well make life easier and help you save money.

If stability and certainty are important, you could consider fixing all or part of your home loan. Some fixed rate loans are currently below variable home loan deals.

However, keep in mind that some fixed rates are higher if not taken within a package. Some also charge monthly fees or a rate lock fee to guarantee that the advertised rate will not increase in the time between your application and settlement.

Always check the features and rates and look beyond the big four banks.

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