Cutting Out the Middle Man

Today I read an interesting article in the Daily Telegraph, it was titled “A $20 ad to sell a house with $1m views”. Despite News Limited clearly trying to sell more print advertising the article does have some merit. It highlights how popular For Sale by Owner (FSBO) is becoming with more and more property owners across Australia.

Many property owners now realise that a reasonably presented property that is marketed to as many potential property buyers as possible will sell it self. The greater the audience your property is exposed to the greater the possibility it will sell.

You can increase your marketing audience by making sure your property is advertised in papers, through flyers, letter box drops and sign boards. Don’t forget the internet which is one of the most cost effective and efficient means to expose your property via online advertisements, email marketing and electronic brochures. Any property owner is capable of performing these marketing functions which an agent would normally perform. By doing this these property owners will save on the commission they would normally be charged by an agent.

Let’s look at what commission a real estate would charge to sell this property in the article. Assume the property sells for the asking price of $1.47m and the average commission an agent would charge is 2.5% then this amounts to $36,750. This is a ridiculous amount of money the agent receives for placing the property in a few papers, on a few websites, and performing some open inspections and then negotiating the sale.

By the property owner performing these marketing functions they saved $36,750 which after tax corresponds to about 70% of the average yearly salary of a person in Australia.

A nice little bonus for a couple of days work!