The Pitfalls of Buying a Privately Listed Property

People generally have a misconception of what REALTORS® actually do, and how much work is involved in arranging a sale. In fact, REALTORS® do quite a bit for their buyer clients. An experienced REALTOR® should be an expert negotiator, able to pin a fair price on the property you want to buy, and make an effective argument for this. A good rapport with other agents and sellers is critical: you want your offer to be taken seriously and responded to in a timely fashion. Arranging financing, assistance with inspections, correspondence with other professionals such as insurance brokers, lawyers, surveyors & notaries, and in general, making sure all documentation is in order.

A good REALTOR® should identify problems before they arise. Here are some common issues and misconceptions associated with the purchase of a privately listed property.

  • Don’t expect a discount price. Buyers often mistakenly assume that by buying a privately listed property, they are automatically going to get a bargain price and save money. Despite the fact the seller isn’t paying fees to a REALTOR®, it doesn’t mean they will bring down the price of their home or property. The seller is still taking on a lot of extra trouble, and will expect something in return.
  • Legal risks. If you are not savvy when it comes to legal matters and if you lack the experience to recognize potential problems in an agreement to purchase, a REALTOR® can help. A boilerplate, standard agreement is rarely enough to cover your best interests. Each property must be approached on a case-by-case basis and terms evaluated based on your specific needs.
  • Overpricing & Overpaying. Proper pricing is one of the major services REALTORS® provide, on both sides of the transaction. Prior to writing an offer, your REALTOR® should be providing a detailed market analysis on the property, to ensure the deal is fair.
  • Negotiation and Stress. If you are not skilled in negotiation, it’s best to leave it to a professional. A your REALTOR® should be a skilled negotiator, work in your best interests above their own, and check emotions at the door when advising you. If you’ve never negotiated a real estate transaction, be aware that you could encounter sellers who enter real estate deals on a regular basis and know how to get their way. You may be outclassed if you’re not practised in the art of the sale.
  • Access to Information. In addition to market and pricing assistance, information about neighbourhoods, schools, amenities, and even the neighbours themselves may be withheld by the seller. This is information your REALTOR® should have and will volunteer when looking out for your best interests. You can (and should!) do your own research, but advice from someone who’s watching the market every day, tracking trends and hearing the “inside scoop” from an unbiased perspective is invaluable.
  • After sale services. The seller won’t be there to help you after the sale if something goes wrong. Your REALTOR® will be; the duty of service extends beyond handing you the keys on closing day!

It’s worth it to consider protecting yourself from the troubles often associated with buying privately. Let a professional step in and take care of all the negotiation, issues, small fixes and questions for you. And keep in mind that “hiring” your own representative usually won’t cost you a penny! For more information, contact Colin Crowell, BBA, REALTOR® today at 902-840-3999.