What is a private sale?
The word sale is something which most of us are familiar with. It is nothing but the selling of items at a price. The items can be anything from clothes to electronic gadgets to property. When it comes to selling a property, there is usually a third party involved. And this third party is usually an agent or a broker. What the agent or the broker does is they show the interested party the property which is for sale
and if in case the party decides to buy it, they get a commission
. Sometimes, the seller might also hire an agent or a broker, in which case the work of the agent will be to find a suitable buyer for the property. And if the agent brings a buyer who is interested and if the deal goes through, then the seller will have to pay a commission to the agent. Sometimes, both the seller and the buyer will have to pay the broker a commission. This is how most of the sales take place in the real estate industry.
Then one might wonder what exactly a private sale is and in what way it is different from a normal sale. Well, the most important difference between a normal sale and a private sale is the fact that in a sale that is referred to as private, there is no agent or broker or a third party involved whereas in a normal sale, there is almost always a third party involved. That is to say that in such a sale, all the transactions take place only between the buyer and a seller and nobody else is involved. It is word of mouth which makes people
aware that a property is for sale when it comes to such sales. Also, people might advertise in newspapers about the property.
There are several advantages of such a sale over a normal sale. The first and probably the most important advantage is the fact that one need not pay any commission to the agent or broker. This is mainly the reason why many Canadian sellers prefer to make a private sale than to let the agents find them the right buyers. The agents charge up to 5% of the property value and this could turn out to be a very significant amount if the value of the property is high.
There is a downside to private sale also. Like anything in this world, this sale also has its own share of advantages and disadvantages. The disadvantage is that the buyer will have to look for the right property himself. He or she might not have the time to do this as there might be several aspects which one needs to look into before deciding on buying a
property. The same thing applies to the seller. He will have to be on the lookout for the right buyer. If the job was entrusted to a broker, it would be his duty to make sure that both the sides get what they want.