Way before I was a Real Estate Agent, I was a normal buyer and seller – hard to believe I know 😊. And after many years in my own property business buying and selling a lot of homes I have identified 3 common tricks that agents will use to try and get you to list your home with them.
Now don’t get me wrong, they don’t do it maliciously, but real estate is a competitive business and agents will often employ various techniques to get you to sign on the dotted line, especially when they are trying to get the advantage over their competition.
I talk to hundreds of people every week so I know first hand that all of these techniques are, unfortunately, alive and well. Now on the surface these items may seem like an advantage to you and that’s why it is so easy to buy into them. But let’s look at each of them in turn and see what they really mean to you and the final selling price of your home.
#1 – ALL OFFERS PRESENTED
This is a very popular sale method at the moment. I don’t know about you but it drives me absolutely crazy! In fact online research shows that properties that come on to the market with no pricing and the word OFFERS, risk annoying up to 80% of potential buyers. Now I don’t know about you but if my home was for sale I couldn’t afford to get rid of 80% of the buying public.
So, why do agents do this? Well the reason is usually tied to the fact that the agent does not want to be straight with the seller as to the true value of their home. So, instead of saying “I don’t think your home is worth 1.5M, it is probably more around 1M”, the agent simply prices it as OFFERS with the promise of “Lets let the market decide”. This keeps the seller happy and avoids the confrontation of having a real discussion around price.
What affect does this have? Well its very simple. Statistics show that homes that use OFFERS rather than a price or price guide, take far longer to sell and have a much higher chance of not selling at all. One reason is that we are all time poor. We don’t have time, or don’t want to call a real estate agent to find out if we can afford to buy a home.
The lesson here is, if you are interviewing several agents, don’t be mis-led by the promise of a higher price through using OFFERS. By not pricing your property the reality will more than likely be disappointment or a sale at a price far lower than you would have received if you had priced it properly to start with.
#2 – I WILL PAY FOR YOUR MARKETING
Back in the good old days marketing was cheap and most agents paid for it all. Since then the cost of marketing has skyrocketed and in addition the amount of options available to market your homes are many and varied. Your home is being sold in the most competitive market there has ever been with the most educated and informed buyers the world has ever seen.
Chances are if you interview agents someone is going to offer you free marketing. I am going to tell you why this is a very bad idea and why any agent worth their salt does not offer this to clients they genuinely want to achieve a good result for.
Marketing is not cheap. If a client does not pay for the marketing then the individual agent must cover the costs themselves. So think about this, if the agent is paying for your marketing campaign, they are giving you the one they can afford, not the one you should be getting. The end result of this can be disastrous for you and your hip pocket. In addition, the agent is motivated to get you sold quickly so they can recoup their marketing loan. This does not always lead to good decision making and may result in your agent hurrying the process to get you ‘any offer’ rather than the ‘best offer’.
Cheap marketing campaigns usually are obvious with average photos, no floorplans, the lowest level of internet campaign and no local newspaper advertising, videos etc. Now as a future seller you may be thinking, does any of this actually make a difference? But I can tell you, as one of the state’s top agents, the right marketing campaign makes all the difference. A good campaign will more than recoup its cost. Lets face it, Apple doesn’t put a new iphone on the market and say, “let’s just see how it goes first”
Statistics also demonstrate that properties with strong marketing campaigns sell in far shorter periods of time, greater number of buyers through home opens, more enquiries, more offers and higher prices.
#3 – I HAVE THE BUYER FOR YOUR HOME ALREADY
Ahh, the old ‘I have a buyer already for your home’ trick. This is an oldie but a goodie and I am still amazed by how many unsuspecting sellers fall for this. And look, it’s not their fault, we can be very convincing!
It can be very attractive to think that one buyer is going to walk in and pay an over the top price for your home, you don’t have to tidy up, paint, de-clutter and all that other horrible stuff we have been absolutely dreading.
The truth is very few people have the luxury of that one perfect buyer and even if they do, they are usually very educated and will be cautious with what they offer. Especially if they think they are the only buyer and being sold a secret. There is no substitute for competition and at the end of the day that it is the only way to force your price higher and achieve that amazing result.
Now, worse than that, is the lure of that one special buyer, that magically disappears the minute after you have signed up for 3 months, leaving you with no option but to now continue with an agent that, if it wasn’t for lure of a secret buyer, you probably wouldn’t have hired in the first place.
So, how do you avoid this. Choose the agent that you really believe in and connect with. Select an agent with a great track record or one that has a reputation for selling homes in the area you live in. Great agents generally have great data bases and they won’t want to sell your home to ‘one’ buyer. Rather they will want to market it properly, get buyers competing and will work for you to get a great result.
STRATEGIES TO AVOID THIS
It’s an anxious and stressful process selling your home. But that can be quickly forgotten in the light of an amazing result. So how can you make the process easier:
- Always interview 3 agents unless you already have a good working knowledge of agents in your area.
- Ask the agents for a range in which they think the final selling price will be as well as how they came to that. Get them to show comparable examples.
- Request a marketing plan from each agent together with costings. Ask the agent to explain their reasons for what they are suggesting together with examples of other homes they have sold with similar plans.
- Ask the agent how many active buyers they have in your area
- If an agent has a special buyer but you don’t want to work with that particular agent, invite them to introduce the buyer to your chosen agent through what is known as a conjunctional arrangement.
- ratemyagent.com.au is a great reference point to see what other clients have experienced