How agents exploit sellers
by Neil Jenman
Article written and provided by Neil Jenman from Jenman.com.au . To see the original source of this article please click here. https://jenman.com.au/are-you-being-used/. Neil Jenman is Australia’s trusted consumer crusader. He can support you, all the way, from choosing an agent who will get you the highest price guaranteed to when your removalist comes! You get an unprecedented level of total support. All for free. To find out more visit jenman.com.au
READING TIME: 3.5 mins apx
Some agents are deliberately delaying the sale of homes to suit their own agenda. They are “using” the sellers and, in doing so, causing sellers’ homes to sell for lower prices.
In an industry powered by solipsism, agents’ interests take priority.
What you are about to see is a classic example. It’s become widespread.
MANY AGENTS ‘USE’ SELLERS
Here’s how it works: Agents tell sellers they need to hold their home ‘open-for-inspection’ to find buyers.
But the major reason agents hold ‘open-inspections’ is not to find buyers, it’s to get more listings for the agents.
As anyone who’s ever attended an ‘open-house’ will attest, one of the first questions agents ask you is: “Have you got a home to sell?”
No harm done, or so it seems.
But plenty of harm is done. Many of these agents are deliberately extending the number of open-inspections – and even extending the marketing time span – for the purpose of finding more listings.
These agents prevent buyers from buying homes. If buyers turn up at the first open-for-inspection and want to buy the home or make an offer, agents say: “The vendors have asked us not to bring any buyers or submit offers until we have done a few weeks of open-inspections.”
Of course, that’s nonsense.
Sellers (“vendors”) say no such thing.
Sellers want to sell their home. – as soon as they can for the best price they can. Sellers follow the agents’ advice. Some think it makes sense to have lots of inspections because more buyers mean a better price.
But that’s more nonsense. It’s not the number of buyers who inspect a home that’s important, it’s the quality of the buyers.
The first buyers to inspect homes are usually the best paying buyers.
And early offers are usually the best offers.
By preventing early buyers from buying the homes, they go elsewhere. Few will wait weeks while the agent uses the sellers’ home to find more listings.
Once a home has been for sale for a few weeks (sometimes just two weeks, especially in a hot market), buyers wonder why it hasn’t sold. They think something is wrong with it – or that it’s over-priced. Either way, the buyers then make lower offers.
So, the longer a home is for sale, the lower its price is likely to be.
When agents have a home that attracts much interest, they get many sellers visiting that home (to do research and check prices). The agents do not want to sell the home that’s open-for-inspection, not while sellers are turning up. Never mind buyers, they can wait. Never mind the interests of this seller, the agents want more sellers.
AGENTS TAUGHT TO EXPLOIT SELLERS.
As one real estate trainer wrote: “An Open-For-Inspection is not conducted to please a vendor, it is conducted to meet other prospective vendors.”
He then writes: “If it is a property that pulls well, and we are meeting a lot of new people, the worst thing we can do is sell it.”
Yes, you read it right.
“The worst thing we can do is sell” our clients’ home.
Use our current sellers.
Exploit our current sellers.
“Milk” our current sellers (as it’s often called).
But don’t sell their home until you, the agent, have got maximum benefit for yourself.
If agents don’t sell a home in the first weeks, it doesn’t bother the agents. The sellers aren’t going anywhere. The sellers can’t go anywhere. They have signed an exclusive agreement.
What sellers need to understand is that whether a home sells for a high price or a low price, the agents get a high commission. Plus, agents charge [naïve] sellers for the advertising money that attracted more sellers. The advertising money handed over by the sellers is not to promote the sellers’ home and attract buyers, it’s to promote agents and attract sellers. It’s part of a scam called VPA (Vendor Pays Advertising). Like the Eastern Brown Snake, it’s unique to Australia.
What good, you may ask, are more sellers to sellers selling their homes?
Most of the real estate world is a gigantic self-interest scam. Agents put their own interests ahead of the interests of home sellers. They betray sellers. Most agents are traitors.
One agent in South Australia – who looks and sounds like a used-car salesman – describes himself as “one of the most recognised real estate personalities in South Australia”. He fancies himself as a real estate trainer.
Here are his words of advice to agents: “If you’re in real estate, open for inspections are one of the best sources to meet people selling real estate. A lot of people that rock up at an open for inspection come with a trade-in. Not only are they looking to buy property they need to sell property as part of the transaction.
And a mistake that agents make is that the minute there is any level of excitement around a listing they sell it at the first open.
But what you need to do is focus on maximising the number of opens over the course of a campaign.
So why not consider booking a ‘best offer by’ or an auction campaign even slipping in the occasional midweek viewing and then you can 5X the number of buyer sellers that you’re meeting and that’s really going to open up your pipeline and how you’re going to meet sellers in your community.”
WHAT SELLERS CAN DO.
If you are a seller, demand that your home be available for sale when any buyer wants to buy it. Tell the agent you will always consider offers. Especially when your home is first for sale. Fresh homes get better prices.
Don’t let your home go stale as the agent uses you.
WHAT BUYERS CAN DO.
If you are a buyer and the agent will not let you buy the home – or even submit an offer – don’t walk away and find another home; that means both you and the sellers miss out. Approach the sellers direct. There is no law against buyers speaking to sellers. Just knock on the door and say: “I want to buy your house, but your agent won’t let me.”
As with so much that goes on behind-the-scenes in the real estate world, when sellers and buyers discover the truth, sparks fly. As they should.
Don’t let agents get away with putting themselves first. If you are the seller, you are the client, you are paying the agent thousands of dollars in commission; to, what, to not sell your home?!
If your agent won’t put you first – as they should – make sure you put you first.
Or, better still, find a better agent.