How real estate agents lie to survive.

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/the-truth-about-false-quotes/. 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: Apx 5 mins

False quoting is rampant in real estate. Most agents (about 90%) participate in false quoting. If they don’t, they will struggle to survive. Without false quoting, these agents would struggle to find houses to sell, and they would struggle to find buyers for those houses.

Even the most honest agents get snared in the nefarious practice of false quoting. It’s built into the systems and methods that most agents feel they are forced (or instructed) to use. They way they see it, they have no choice. Quote honestly and lose. Quote falsely and win. Lie or die. That’s the reality for real estate for agents in the 2020s.

False quoting has become so common in real estate that, rather than complaining about it, sellers and buyers need to learn the truth about it.

There are two types of false quotes.

1. FALSE OVER-QUOTING TO SELLERS – WHY AND HOW.

Finding homes for sale (listings) is the major focus of all agents. Without good listings, agents can’t make sales. But the competition to win listings is fierce.

Most agents know that, generally, the agent who quotes the highest estimate of the value of a home is the agent who wins the listing. Quite simply, most sellers reward agents for lying to them.

Yes, the biggest liars get the job. The biggest (and best) liars therefore list the most homes.

But, once agents list homes, their next challenge is to sell these homes.

And because they have over-quoted the likely selling price, their major focus is nhow to get the owner to reduce the price.

Of course, after they win listings, agents can’t say to the sellers: “We lied to you about the likely selling price of your home. We did this so that we could sign you up and tie you up for four months. And now we start to talk you down in price. In the industry, it’s called “conditioning. So, brace yourself for what’s about to come.”

No, agents need to be more subtle if they intend to turn those listings into sales.

Enter the great alibi of dodgy agents – “the market”.

From now on, the most common words the sellers will hear are “the market”.

“We will take the property to the market.”
“We will market your property to the market.”
“We will see how the market responds.”
“We will give you market feedback.”
“The market is getting tough.”
“You need to listen to the market.”
“The market says your property is only worth…”

Can you see what’s happening? The agents tell the lies. The market becomes their alibi.

Let’s use a specific example. Say a home is genuinely worth about $2,000,000. To win the rights to sell that home – get the listing – agents over-quote the likely selling price. The home will probably come on the market with the owners expecting as much as $2.4 million.
But now the agent must attract buyers to a home that’s over-quoted by at least $400,000. If the agent promotes the property at the price quoted to the sellers – $2.4 million – there will be little or no interest.

It’s time to start under quoting to the buyers. Time to draw in a crowd. Time to “take the property to the market”.

2. FALSE UNDER-QUOTING TO BUYERS – WHY AND HOW.

To sell a home, it is necessary to find a buyer. That’s obvious. So, the agent now tells the sellers that, to attract buyers, it will be necessary to promote the home at a lower price.

If the sellers baulk, the agent will say that, at $2.4 million, there won’t be any buyers. “We need to get lots of buyers. When they fall in love with the home, we get them to compete. We talk them up in price.”

If the sellers still seem sceptical, the agent may say, with great sincerity, “Trust me, I have been doing this a long time. I know how it works. This is how we get you the best price.”

Even though the sellers may have reservations, most go along. They allow the agents to market their home at a lower price – usually within a price range.

In this case the agents may say $1.7 million to $1.87 million.

Now, when the crunch comes, the owners may agree to accept $2,000,000 (the real value) or less – especially after they have been subjected to weeks of conditioning.

The agents say they are complying with the law (which requires them to quote within a range of 10% of what they have told the owners). So, while they may verbally have said $2.4 million, when it comes to writing the price on their Listing Agreement, they adjust it down. It’s a strategy to get the home sold (at any price).

It’s amazing how many sellers swallow this sophistry.

Buyers’ Response.

Ask any experienced home buyers – those who’ve been in the market for more than a few weeks – how they deal with the ubiquity of false quotes.

The typical buyers’ response to this false quoting epidemic creates another dilemma which makes it near impossible for even well-meaning agents to remain honest.

To protect themselves from disappointment and needless costs, most buyers add between 10% and 20% to the price they see quoted for a property.

So, if an honest agent – who’s truthfully told the owners that their home is worth around $2 million (and the owners believe the honest agent) – promotes the home for $2 million, the buyers (who have become conditioned to being deceived) will believe the owners want between $2.2 million (10% more) and $2.4 million (20% more).

And what will happen then?

The home will likely be ignored. The buyers won’t believe they are seeing a truthful quote. The home will soon become stale – even turned into a lemon.

The honest agent will be punished for not under-quoting – because most buyers know that most agents do under-quote.

So, if the honest agent wants to sell a home for the genuine price of $2 million (or maybe a bit more), the agent will have no choice. They must compete in a dishonest market where most (at least 90%) of homes are under-quoted. If they are to get any enquiry for the home – assuming of course, that they first do what all good agents do and make a concerted attempt to speak with buyers known to them – they must underquote the home.

This is real estate industry in Australia in the 2020s. Agents must over over-quote the selling price to win sellers and then must underquote the selling price to attract buyers.

Honest agents truly despair.

As does the author of this article.

The post The Truth About False Quotes appeared first on Scott Kim.

Another look at real estate commission.

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/do-you-deserve-a-discount-2/. 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: Apx 3.5 minutes

Most real estate agents are massively overpaid.

Never mind what they tell you, it takes the same time to sell a unit for $300,000 in Bundaberg as it does to sell a home for millions of dollars in a big city.

The agents getting paid $100,000 when a $5 million home sells in Sydney do the same amount of work as the agents who get paid $6,000 to sell the unit in Bundy.

Here are some important points to help you to get a discount from an agent – or, at the very least, make sure you are treated fairly.

POINT 1 – JUSTIFY THE COMMISSION

Not all agents are over-charging.

If you get a great price, far more than you expected and you believe the reason you got such a price was the agent’s superb negotiating skill and effort, go ahead and pay a high fee.

The big word to remember, however, is JUSTIFY.

Can the agent justify charging the commission being asked?

Are you happy?

If yes to both questions, where’s the problem?

POINT 2 – PAY NOTHING FOR NOTHING!!

Nothing is more unfair than sellers paying thousands of dollars when homes are not sold. It’s outrageous. It’s also incredible how sellers “fall for it”. No one deserves to be treated in such an unethical manner.

Here’s what happens to thousands of sellers (Please do not let it happen to you):

The agent quotes you a selling price. You feel happy, so you sign-up.

Then the pressure starts. Lower the price. The market is saying your price is too high. You must drop your price if you want to sell.

You are not happy at being told one price before you signed-up and being pushed to lower your price after you signed-up. So, you withdraw your home from sale, thinking that will be the end of an unpleasant relationship.

Suddenly, you get an invoice for five thousand dollars (often more) for “marketing expenses”.

You feel used and abused. The reason you signed-up was because the agent quoted you a high price. And now that the agent failed to get the price they quoted, they demand you pay thousands of dollars. For nothing.

Do not accept nonsense like, “Your home was advertised so you should pay”.

The purpose of real estate advertising is rarely to “sell” your home. It’s to promote the agent and find more leads for the agent.

Consider this: Agents expect you to pay for ads, yet they get leads and commissions on sales from those ads.

Never put yourself in a position where you may have to pay something for nothing.

When you deal with an agent, your golden rule is: PAY NOTHING UNTIL YOUR HOME IS SOLD and you are happy with the price. No excuses, no exceptions.

You can even write those words on the selling agreement the agent asks you to sign (that the agent signs too). “We will pay NO FEES for any reason until our home is sold and we are satisfied.”

Never say you can’t find an agent who agrees to these conditions. If you are having trouble, contact us at Jenman Support on 1800 1800 18 or support@jenman.com.au

POINT 3 – IGNORE “COMPANY POLICY”

Many agents say it’s “company policy” to do something a certain way.

What about your policy?

Just say to the agents; “You might have your company policy, but our policy is that we find an agent who only charges us after our home is sold and we are happy.”

Nothing is as important as your “EXPECTATION POLICY”.

POINT 4 – DON’T DISCOUNT ALONE

If agents ask you to drop your price, ask them, “What about your commission?”

If agents ask you to take a substantial cut on your selling price, you can ask them to take a substantial cut in their commission.

Please be firm. Agents are used to pushing sellers around. Do not be pushed around.

This point – asking the agent to drop their commission if you drop your price – should be mandatory if the agent suggested the price, you are now unable to achieve.

It will be a different story, of course, if say, you want a million dollars for your home and the agent has always told you that your home should be priced at, say, $800,000.

But if the agent told you a million dollars (or whatever price) and you signed up based on that price and the agent now wants you to lower your price, it’s only fair that the agent lower their commission.

POINT 5 – BEWARE OF INSTANT DISCOUNTERS

Beware of agents who quickly agree to a lower fee.

There is a saying in real estate: “If they give their own money away, what do you think will do if you let them get their hands on your money?”

Cheap agents often get cheap prices.

In one case, a seller signed-up with a “flat-fee” agent. She saved $13,000 in commission but her home was short-sold by $545,000.

Avoid agents who always work for peanuts. You know what that means.

POINT 6 – NEGOTIATE AT POINT OF SALE

The time to negotiate commission is when the agent has found a buyer, NEVER before.

There are two reasons why you must negotiate at the end, not the beginning.

1. If the agent normally charges, say, 2.5 per cent and you ‘knock them down’ to 1.5 per cent, how much effort are they going to put into your home compared with other homes where they get a higher fee?

It’s obvious: If an agent has a hot buyer, which home will they show the buyer: the home where they get $15,000 or the home where they get $25,000?

Give agents an incentive to bring buyers to your home.

2. Once buyers fall in love with your home, they won’t go away. The agent is then ‘stuck’ with those buyers ‘on’ your home.

Now, of course, if the buyers are prepared to pay you a great price, you may not need a discount.

But if buyers want you to go down – as most do – say to the agent: “If you expect us to drop our price, you drop your commission.”

Faced with the choice of getting, say, $15,000 (instead of $25,000) or getting nothing, most agents will agree to accept $15,000. You saved ten thousand dollars.

POINT 7 – FOCUS ON SERVICE AS WELL AS PRICE

Very few agents give great service. They are often late for appointments; they break promises.

Keep a list of all the ways in which the agent lets you down. And then, when the agent is telling you the commission you must pay, you say, “Based on your low level of service, it’s only fair that we pay a low fee.” A lower fee compensates for lower service.

Please be honest and fair.

In rare cases where an agent does a great job, it may be fair to pay their suggested commission. You be the judge.

POINT 8 – COMMISSION IS ALWAYS NEGOTIABLE

There is no such thing as an agent who has never given a discount. Just ask: “Has your agency every given a discount to any home sellers?”

And remember: You can negotiate anything in real estate. You can make your contract subject to your football team winning the Grand Final. Everything is negotiable.

It’s your property, you are the boss. The agent is your employee. Technically, that means the agent is (at law) your “servant”.

Do not let agents push you around and tell you what to do. You call the shots. That includes the price at which you sell and the amount you pay the agent.

This is all your personal customer policy. Getting a fair deal should be the only thing that’s not negotiable. A fair deal is the least you deserve.

The post Do You Deserve A Discount? appeared first on Scott Kim.

Especially for what you don’t want.

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/dont-pay-anything-2/. 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: Apx 5 mins

Recently, my wife and I went for dinner at a Thai restaurant. It looked good from the outside. But appearances are not always reality.

We ordered mixed vegetables with chicken.

When the meal arrived, it was mixed vegetables with beef. Not a chook in sight.

The waiter apologised. He took the meal and said he’d be back.

Less than a minute later, he was back. With the same meal – beef not chicken as ordered.

He said: “The chef says that even though the meal is wrong, it still has to be paid for.”

Although she looked flustered, my wife meekly said, “Okay.”

Now, my wife is the nicest person I know – or have ever known. Like many people, she doesn’t like confrontation. It takes something more serious than a wrong meal to rile her up.

But not me. I could not believe what was happening. The nerve of these people – the chef or the owner or whoever expected us to pay for something we didn’t want.

WAS THE WAITER AN EX-AGENT?

I said to the waiter: “You must have worked in real estate.”

He looked puzzled.

I explained: “Well, agents always make people pay for things they don’t want, don’t need, and don’t request. Just like you are doing.”

I then handed the waiter a book I was reading. It was by the famed lawyer, Marcia Clark.

The waiter stared at the book. I said: “Don’t worry, I’ll get another copy. This one’s for you. The price is $50. How do you wish to pay?”

The irony was lost on him because he said: “I don’t want to buy the book.”

To which I replied, “And we don’t want to buy the beef.”

It was a stand-off.

In the waiter’s defence, he was young and clearly inexperienced (with life). He looked lost.

So, I explained things to him. I said: “It’s illegal to make people pay for something they don’t want and didn’t ask for. You can’t do that to us – or anybody. It doesn’t matter what your boss says. What matters is what’s right. We asked for chicken. Not beef. We are not going to pay for something we didn’t ask for.”

“Just as you don’t want to pay for that book, do you?”

Of course, we did not pay for the beef. We got our chicken.

Later, when we finished the meal, we paid and went home.

UNWANTED ADVERTISING COSTS.

The most common rip-off in real estate is needless advertising costs. Rarely is advertising needed to sell a home. And, even if it is needed, Australia’s agents are the only agents in the world who expect sellers to pay massive advertising costs plus massive commission costs.

And yet most sellers do what my dear wife almost did: They pay for something they don’t want. Or need.

All agents know that, in most cases, they already have buyers on their books that would likely buy any home. If not, they can do what any honourable employee does in any job – work.

Instead of placing ads and waiting for calls, good agents make calls. They ring around. They chase leads. They check out sources. Finally, they find the best buyer. All without the unwanted cost of needless advertising.

There’s a saying: “Advertising is what salespeople do when they are too lazy to follow leads.”

These days, as well as lazy, many agents are arrogant and selfish. And bullies. They refuse to list homes unless sellers pay advertising costs. It doesn’t matter if these costs are needed or wanted by sellers, agents refuse to list a home unless they get advertising money. Or unless they get sellers to agree to pay advertising costs regardless of whether the home sells or not.

Why do so many agents act so unethically with advertising? The reason is simple: Agents are using advertising to promote themselves not homes.

Think about what you likely did – maybe you saw the most prominent agent and thought that “prominence means successful”. But no, most times, the biggest advertisers are the biggest sharks in the real estate ocean.

Of course, sellers are never told the real reason for advertising. Thousands of sellers are bullied into paying for failure. Their lack of experience makes them susceptible to the sophistry of the agents who use guilt lines, such as: “It’s your home, you should pay the advertising costs.”

Oh – and who gets the commission from leads created by advertising paid by the sellers? The selfish agents, of course.

Don’t fall for it.

Don’t pay for what you don’t need.

UNWANTED COMMISSION COSTS.

The same applies with the commission.

One of the biggest problems for sellers (aside from finding an honest and competent agent) is that most agents have different agendas from home sellers. The sellers’ agenda is to sell their home for a good price. The agents’ agenda is to sell the home. At any price.

So, again, here’s how thousands of sellers pay for what they don’t want. Before they sign-up, the agent says their home is worth a certain price. The agent also states the commission rate.

But later, when the price is pushed down, when the agent has put the sellers through weeks of “conditioning” and the sellers are urged to accept a price which is tens – or hundreds – of thousands of dollars below the price they wanted, guess what happens?

The agents get their full commission.

Sellers are forced to pay for what they didn’t want.

Let’s be clear: You should not pay for what you do not want. If you later decide to sell your home for less than the agent first quoted, and you are sure the agent has “conditioned” you, you should insist on the agent doing what you are doing. Drop their price.

If you must drop your price, get the agent to drop their commission. If not, don’t sell.

When you go to a restaurant, you usually pay at the end – after you’ve enjoyed the meal you ordered. You don’t order chicken, get beef, and then meekly pay. Few people would do that.

And yet, when it comes to real estate, thousands of sellers every week are forced (“bullied” and “bluffed”) into paying for what they don’t want.

For years, I have been telling sellers, “Don’t Sign Anything!”. What I mean is: Don’t sign anything unless you are protected.

In addition to “don’t sign anything”, I need to say three more words: “DON’T PAY ANYTHING”.

At least not until you get what you want.

If you don’t get what you want, don’t pay. Or make sure you get a hefty discount.

Don’t pay for beef if you want chicken.

Don’t pay anything – until you get what you want. That’s not mean. Tough maybe, but better to be tough than to be ripped-off, which is what most agents try to do to sellers.

Only in Australia.

But not to you and your family.

The post Don’t Pay Anything appeared first on Scott Kim.

The answer could save and delight you.

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/whom-can-you-trust-in-real-estate/. 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: Apx 9 mins

Every week inexperienced real estate consumers – home buyers, sellers, investors, tenants – make dreadful mistakes. Most mistakes are caused by two factors – the advice from agents (which is in the best interests of agents) and by the consumers’ naivety.

For most people, real estate is an unknown land. Without a reliable guide, people get lost. And then, when they find their way out, they discover they have lost a stack of money – they’ve paid too much or sold for too little.

This happens to most people.

Of course, many people – some would say the lucky ones – never realise what’s happened to them. Auction sellers, for example, shake the hands of the agents who have massively over-charged them and undersold their homes. That’s the story at most auctions.

In real estate, what you don’t know will hurt you. Ignorance is far more costly than commission.

But if you ask the agents, they’ll tell you – it’s not their fault. “All buyers are liars and all sellers are greedy,” is what they say.

The justification for unethical behaviour is commonplace. And, it could be argued, some justification is valid.

What do buyers do when they discover that most agents lie about likely selling prices?

And what do sellers do when they’ve signed up with an agent who’s now asking them to accept thousands of dollars below the price the agent quoted them?

And what do the agents do when they know that, if they tell the truth, most sellers would never sign-up with them and most buyers would desert them?

Being in real estate means you have to second-guess what everyone tells you.

It can be frustrating and depressing.

WHOM DO YOU TRUST?

In today’s rapacious real estate world, it’s hard to know whom to trust.

There is one person, however, that you really should be able to trust – and that’s yourself.

No matter what you plan to do, you should want the best result for yourself.

That’s not greed, that’s financial prudence – or to be blunt, financial intelligence.

But to be intelligent about a subject you need knowledge on that subject.

Unfortunately, ignorance seems more powerful – and certainly more prevalent than either intelligence or knowledge.

In the course of a long real estate life, I have written millions of words to help consumers find a safe path through the real estate world. Thousands of articles and almost three million copies of my books published. But still thousands of consumers are ripped-off every month. That’s no exaggeration.

It makes me despair at times, it really does.

But then my family remind me of the many people we do help – how we save them thousands of dollars. It makes a difference, especially to the over-60s for whom every cent counts. When you get ripped-off or short-sold in your sixties, it’s harder to recover.

If I was compelled to distil all the real estate advice I have written into just four rules – my “best of”, so to speak – it would be these:

RULE 1. YOU CAN TRUST YOU [ON ONE CONDITION].

You can trust yourself to want to do the best for yourself.

But you cannot – and I repeat, you CANNOT – always trust yourself to do what’s best for you.

Lack of experience (naivety) is your biggest enemy – bigger than the worst agents you’ll ever face.

The most important fact you need to know therefore – one that can save you the equivalent of several years wages or savings – is this well-known proverb: Look Before Your Leap. Four words that mean: Never act until you have considered all the possible consequences and dangers.

Do not just focus on the best that can happen – focus on the worst that can happen. If you sign-up with most agents without much thought, you will be at great risk of being hurt, both financially and emotionally.

Sure, you may be quoted a tantalising price for your home. But if, once you sign-up, you get absurdly low offers and decide not to sell, how will you feel when you get a bill for thousands of dollars (ostensibly for advertising; in reality, for promoting the agent – yes, the one who enticed you with a whopper of a lie about the price)?!

Make sure, therefore, to ask yourself a risk-reducing question. It’s only eight words and here it is: What’s the worst that can happen to us?

TRUST RULE 2. THINK ABOUT IT

There is one sentence that all salespeople in all industries fear (even hate): “We want to think about it before we sign anything.”

Now, be careful, all salespeople are trained in how to overcome the I-want-to-think-about-it objection. They have some powerful and persuasive lines to coerce you into signing-up today. To sign-without thinking.

Here’s something to realise and understand: Whatever deal a salesperson is offering you today, will still be there tomorrow. And the day after. And next week. If not, it’ll be a better deal.

Indeed, the longer you make a salesperson wait for your decision, the better the deal you are likely to get. In negotiation, this is known as the “sunk-cost syndrome”.

The more dogmatic you are about your think-about-it policy the more you will look after yourself.

So, trust yourself. Insist on thinking about it before you sign anything.

One of the best statements to make if a salesperson is pressuring you to sign-up is to firmly say: “In our family, we have two non-negotiable policies. First, we always give ourselves a few days to think about any major decision. Second, we never sign-up with any overly pushy salesperson.”

“So, we will call you when we have made a decision.”

As a Chinese Proverb states: “One moment of patience may ward off great disaster, but one moment of impatience may ruin a whole life.”

Look after your life. Be patient.

TRUST RULE 3. ZIP YOUR PURSE

Or your wallet. Do not hand over – or agree to hand over – any money until your home is sold at the price you want.

Honest and competent agents do not ask sellers to pay money in advance of their homes being sold.

Dishonest agents know things you don’t know. Here’s a big one: The reason they want money up front while you are in a feel-good mood – even intoxicated with excitement over the [false] price they’ve quoted is this: When you discover (as you soon will) what this agent intends to do to you, you will never want to pay them.

That’s why so many agents want your money upfront. They know that, later, you will be so cheesed off with them that you won’t want to pay.

As you shouldn’t.

Think about this: Why else do agents have horrendous clauses (buried in the fine print) of their agreements that allow them to sue you if you don’t pay them?

So, the third trust rule is never pay (or agree to pay) any money to any agent until your home is sold and you are satisfied with both the price and the service.

Now, of course, agents will argue: Well, what if we do a great job and the sellers rip us off by refusing to pay?

Well, what do you know? What a turnaround, eh?

Instead of you having to trust the agent the agent has to trust you.

And consider something else: Research shows that 95 per cent of people do not trust real estate agents (99% if you exclude their mates and relatives), so why do you have to be one of the one per cent to trust them?

How trusted are you by the public? If the trust level of your profession is higher than the trust level of the real estate profession, it’s only fair they should trust you.

TRUST RULE 4. LOOK AT WHAT THEY DO, NOT WHAT THEY PROMISE.

One of the golden rules to assessing the merits of anyone (person or company) is by looking at what they do, not listening to what they say they will do.

It doesn’t matter if it’s the ancient biblical rule: “By their deeds you will know them”. Or the street rule: “If you talk the talk, you’d better walk the walk.”

Someone once said, “When all is said and done, there’s far more said than done.”

It’s so true. How many times do we hear about agents not doing what they said they will do? How many times do we hear about agents underquoting the selling price to buyers after overquoting the selling price to sellers? Thousands upon thousands.

Granted, agents can’t please everyone (high price for sellers and low price for buyers). But that doesn’t justify lying to everyone.

Don’t believe it?

Then try this test of an agent’s (or any person’s) sincerity: An agent assures you that they can do a great job for you – sell your home for a wonderful price and give you great service.

Then you need to reply: “When you have achieved that aim, we will pay you well.”

The agent will then request (even demand) that you pay advertising costs. Your reply should be: “What? So you can promote yourself at my expense? To attract more leads for you?”

If the agent insists that several thousand dollars needs to be paid in order to find a buyer for your home, then the agent does not understand marketing or advertising.

A senior executive with one of the nation’s largest real estate websites was selling her home in a ritzy Melbourne suburb. The agent asked her to pay $6,000 for a “premium” advertisement, just as this agent – like most agents – tells all sellers to do the same.

But with inside knowledge not available to most sellers, this person replied: “You can forget about me paying $6,000. I work for the web company, and I know that an ad costing a couple of hundred dollars is often more effective than an ad costing thousands.”

You see, home buyers type in their preferences for the home they seek. And whether a seller has paid ten thousand dollars or one hundred dollars for an ad, buyers will find the home. The right buyers, of course. Oh sure, you may not get so many ‘hits’ or so many ‘lookers’ with a less expensive ad. But you’ll get all the qualified buyers you need.

BEWARE: Stupid and ignorant agents say: “If you don’t pay (or agree to pay) several thousand dollars in advertising costs, we won’t list your home.”

You must reject such agents. Do not be bluffed.

Consider this – and it happens thousands of times: An agent refuses to accept a listing for a home where the commission may be as much as $50,000 all because the sellers refuse to pay (be conned out of) another $5,000 for needless advertising.

And get this: The agents often admit that the $5,000 doesn’t go to them, it goes to the website company (the one majorly owned by the Murdochs.) And yet, these agents are willing to walk-away from a potential $50,000 (or even twenty or thirty thousand dollars) in commission all because the sellers refuse to pay upfront marketing costs.

What sort of agent makes such a nose-cutting stupid decision? A stupid agent, that’s who.

And believe it, you are better off without a stupid agent – especially the type that consider their profile more important than the sale of your home.

So, when you follow Trust Rule 4, look at what an agent does – not what they promise. If they give you a big promise and then, before delivering on that promise, they ask you for a big amount of money, you are dealing with an agent who is certainly a big fool – or a big crook. No other reason is possible.

Always remember what the movie star, Marilyn Monroe, said: “Promises are often worse than lies especially when promises are not fulfilled.” She could have been talking about many of today’s real estate agents.

A promise needs to be supported by deeds, not demands. When an agent promises to sell your home for a great price, tell them to go do it. If they ask you for money in advance, tell them to go away. Find another agent.

IN SUMMARY.

From the millions of words I have written to help home sellers, if they only remembered and followed these four ‘trust rules’ they would be safe:

Trust yourself.
Think about it.
Zip your purse.
Focus on deeds, not promises.

These four trust rules will also get you a much better price for your home.

The post Whom Can You Trust In Real Estate appeared first on Scott Kim.

How homesellers lose thousands.

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/the-asking-price-trap/. 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: 5.5 minutes

When it comes to the value of our homes, most of us are hugely optimistic. Our place is better than next door. It’s got better features; it’s better built and, of course, it’s in a better location.

So, it’s only to be expected that, when it comes time to sell, we’ll want more money than the place next door. And more than the house up the road.

Our house is better.

Get it? Better, better, best.

If we can’t find an agent who’ll agree that our home should sell for the best price, we’ll find another agent. No matter how many agents we interview, we will keep looking until we find one with the intelligence to agree with us about the value of our home.

All home-owners want the best price for their homes when they sell – and then some. Nothing wrong with this, you might think. Aren’t we entitled to the best price?

Well yes, that’s correct. The trouble is, however, that by placing too high a price on their homes, many sellers lose out on thousands of dollars.

It’s a well-known real estate truth: If you start too high (at an impossible-to-achieve price), one thing is almost certain: You’ll finish too low.

Here’s what is happening with thousands of homes for sale these days: A property is offered for sale at a price well above its true value. Consequently, buyers who should see it never see it. Eventually, it sells for less than it could have sold if the price had been more realistic in the beginning.

For example, let’s say the true value of a property is around $900,000. Most owners tend to over-price their properties by at least 20 per cent, often much more. A $900,000 property could be placed on the market for well over $1 million, perhaps as much as $1.25 million.

Please don’t think hiding the price – or choosing to sell by auction – means you’ll be able to disguise that your home is over-priced. Auctions are always the worst way to get the best price. And don’t allow an agent to use a “price from” or a bait-price; all that does is attract buyers determined to pay you less for your home.

So, how do you stop buyers ignoring your home if you price it too high or offering you too little if you price it too low or choose auction?

Please understand: Modern property buyers are highly informed. These days, buyers shop around like never before, they spend hours on-line; they soon know the true values. Most can spot an over-priced property in a couple of mouse clicks.

Buyers laugh contemptuously at over-priced properties. And guess what this means? Hardly anyone buys such properties. Not when they are massively over-priced.

And then, a few weeks later, when concerned sellers start to realise that buyers don’t share their inflated opinion of their home, it’s too late. The damage is done. The property has been on the market for too long, it is now stale and buyers, generally, are wondering what is wrong with it.

Now, instead of reducing the asking price to its former true value of, say, $900,000, the sellers may find themselves forced to reduce the price even lower to attract a serious buyer. Consequently, a home that could have sold for around $950,000 may often sell for closer to $850,000 (or lower) – and all because the owners priced it too high at the start.

A study (conducted in the United States) in around 2009 revealed that, when most home-owners think of the value of their own homes, they are “bordering on delusional”. This delusion factor is like a huge price trap that does so much financial damage to so many of us when we sell our homes.

It is a fact: The longer a home is on the market, the lower the price it will achieve on sale. Over-priced homes can sit on the market for weeks on end. Sometimes months. And the sellers often have no idea of the damage being done to their home’s value.

First, the buyers ignore them and then, second, the buyers laugh at them.

Yes, over-priced properties often become under-priced sales.

So, if you’re selling your property, don’t fall for the common Price Delusion Trap. Price it right and get the best price for it.

Sure, you can ask slightly more and yes, you can expect a lot more. And good agents can always get a bit extra. Further, if you are lucky enough to find an agent who’s also a skilled negotiator you may indeed get a whole lot more.

Scott Kim is a real estate agent in Melbourne’s Monash district. Scott is one of the best in Australia when it comes to negotiation skills. He gets sensational prices for properties. A story I will always remember was when a seller asked us if Scott could sell a home in Essendon for $3.5 million. It’s on a huge block (half an acre in old terms) and local agents had been quoting around $2.1 million. We gently pointed out that Scott is a real estate agent, albeit a great one, but he is not a magician. Even magicians struggle to get delusional prices.

So, how do you know the right price to ask?

Consider getting a registered valuation. It could be a few hundred dollars well spent.

And, second, when you are speaking to agents, urge them to tell you the truth. Say to the agent, “What’s the minimum price you feel my home will fetch? Is there a price below which you will agree not to be paid a fee?” This will let the agent know you are a serious seller who is not interested in being fed a delusional price to try and win your business.

There will rarely be more buyers for your home than when you first place it for sale. Homes that are fresh on the market always attract the most interest. That’s usually when buyers pay the highest price. It’s not the time to turn buyers away with a delusional price that will cause your property to be rejected and, later, to perhaps become the laughing-stock of the area.

As hard as it may be to accept, you can be sure of one thing when pricing your property to sell: inflated asking prices almost always lead to deflated selling prices.

Price your property at the right price. And then sell it for the highest and best price.

The post The Asking Price Trap appeared first on Scott Kim.

How thousands of home sellers get ripped-off.

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/the-true-cost-of-real-estate-marketing/. 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: Apx 5 minutes

Real estate is full of myths and misinformation.

Unless things go wrong, myths can go undetected. Home sellers may never realise they have been over-charged or under-sold.

Once sold, sellers move on. Their home was sold; they got their money. Sure, the commission and the costs were high but that’s behind them now.

There’s one word on the board outside their home – SOLD. It doesn’t say ‘duped’ or ‘conned’.

But if their home doesn’t sell, if their costs start to hurt, that’s when sellers may ask questions they should have asked earlier.

Questions such as: What happens if we don’t sell?

THE STORY OF JOE AND MARIA – ONE OF MANY.

Joe and Maria own a home in a beautiful street in a beautiful suburb. The median price in their area is close to $3 million.

Joe and Maria are nurses – the most trusted of all professions. Like most sellers, they are dealing with members of the least trusted profession – real estate agents.

Joe and Maria are now into their fourth year of trying to sell their home.

And on to their fourth real estate agent.

With marketing costs of $24,000; staging costs of $16,000 and repairs (suggested by agents) of around $18,000 – their total costs (so far) are nearing $60,000.

Plus, their home has been empty for two years – on the advice of agents – which has meant they’ve had loan and holding costs of around $135,000. Never mind what they could have earned in rent – at least another $100,000.

So far, it’s cost Joe and Maria nearly $200,000 to not sell their home.

But it gets worse when another factor is considered – the damage to their home’s value.

From starting at close to $3 million (the agents advertised a “guide” of $2.8 million) they are now close to $2 million (the agents are now advertising a “guide” of $2.1 million).

Australia is the only country where homeowners can place their homes for sale – and those homes fail to sell – and the owners lose thousands of dollars in advertising costs.

Advertising costs have exploded by around one hundred times in the past 20 years. Before the advent of VPA (Vendor Paid Advertising), agents bore the cost of advertising. It was built-in to their commission.

But once sellers began to be duped into paying advertising costs, well, of course, the advertising rates – and the amount of advertising – soared.

THE TYPICAL TWO-STEP SELLING PLAN

Most agents have a two-step plan for selling real estate.

Step one: Spend a massive amount of money marketing a home.

Step two: If the home doesn’t sell, massively reduce the price.

Repeat – and keep repeating – until sold.

THE DAMAGE OF THE DIGITAL FOOTPRINT

The thousands of dollars that sellers lose in outrageous advertising costs pales compared to the damage to the value of their homes from excessive and prolonged advertising.

Go online and type in the address of Joe and Maria’s home. Wherever you look, there’s their home – three years’ worth of advertising with dates, prices and comments.

Almost every buyer will now ask: What’s wrong with it?

According to most agents (another myth): If a home fails to sell, there are only two reasons: the price or the marketing.

But what’s missing from this reasoning?

The agent, of course.

Incompetence on the part of agents is never considered by most agents.

But that’s exactly why many homes are not sold.

Most of today’s agents are too incompetent, too thoughtless, too greedy, too lazy and too egotistical to consider any method but massive advertising and massive price drops.

But massive advertising forces a home down in price.

Most agents don’t care. Regardless of the sale price, they still get a high commission.

PROTECT THE VALUE OF YOUR HOME.

Nothing should be more important to sellers than protecting their home’s value. But try finding an agent who’ll tell them how advertising can damage the value of their homes.

As for the major real estate websites, they have one major goal – to milk sellers for as much as possible. I sincerely believe they should be known as real estate dot con.

These websites and their acolyte agents spread one of the biggest myths in modern real estate – that “it’s essential to advertise a home on-line”.

That’s such nonsense. Give me five minutes with any home seller and I’ll show them how to save thousands of dollars, protect their home’s value and get a better selling price.

WHAT SELLERS ARE NOT TOLD ABOUT ADVERTISING.

Here are 12 important points that sellers should know about today’s real estate marketing.

Truth 1. Never agree to pay for advertising costs – at least not until your home is sold and you are happy with the price and the service. It’s simple. Say no. Be strong.

Truth 2. The best homes are seldom advertised. Ask any decent buyers’ agent and they will soon confirm that the best homes are often NOT advertised.

Truth 3. The main purpose of real estate advertising is to promote agents not homes.

Truth 4. Agents use advertising as a “conditioning” tool. If a home doesn’t sell, agents push sellers to drop the price.

Truth 5. If advertising was the only way of finding a buyer, why use an agent, just advertise yourself, cut out the agent and save thousands of dollars in commission.

Truth 6. Upgraded advertising is a con. Sellers are told they need to pay thousands of dollars extra so that their advertisement can be at the top of search results. Every seller is told the same. How can everyone’s home be the first home seen?

Truth 7. Research shows that a standard advertisement is just as effective (or even more effective) than a premium advertisement. This is from inside information.

Truth 8. If you hire an agent, it will cost you many thousands of dollars to advertise on a major website. If you hire a private sale company (like ‘Property Now’), it will cost you hundreds of dollars (not thousands) to advertise on a major website. I’ll bet no agent ever told you that.

Truth 9. One of the biggest myths is this statement: “You can’t sell a secret”. But as any good negotiator knows: Secrets are treasured. The best-paying buyers pay a premium for homes that are not advertised.

Truth 10. All agents have buyers on their books. They don’t need to advertise every home. One network boasts that they have “two million potential buyers on their data base”. Yet they still ask sellers for money to advertise. As one of their directors told me last month about their claim about two million buyers, “That’s BS.” Charming.

Truth 11. Back when the cost of advertising was included in commission, there was a fraction of today’s money spent on advertising. Agents waste your money but not their money.

Truth 12. In many areas, commissions are now up around $50,000 per home. What sellers need to ask agents is this: “Is $50,000 (or whatever they are charging) not enough for you?”

There are many ways to find buyers for homes without spending thousands of dollars on a major website. At last count, I listed 13 methods to find buyers at no or low cost. Unlike agents, I’m always happy to share them with sellers.

Online advertising should be the last method in the search for buyers. Not the first method.

Why do agents automatically default to the most expensive method of finding buyers?

Three main reasons: First, it’s not their money. Second, they get free publicity and third, other ways require something that many agents don’t like – work.

If you’re selling a home, don’t get misled by advertising myths.

If an agent doesn’t know how to find buyers without charging you thousands of dollars for online advertising, find a better agent.

It’s better to spend two or three weeks searching for the best agent than to do what Joe and Maria have done – spend two or three years (and lose tens of thousands of dollars) with the wrong agents.

The post The True Cost Of Real Estate Marketing appeared first on Scott Kim.

How Agents ‘Guilt’ 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/propertys-prickly-pear/. 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: 8 mins apx

VPA – ‘Vendor Paid Advertising’. It’s now the most common scam in real estate.

More than 90 per cent of agents perpetrate this scam. In some areas, it’s 100 per cent – all agents are conning all sellers.

Except those sellers who know the truth. And those who know how to protect themselves.

The VPA scam is a plague unique to Australia. A scam that, in the 2020s, has spread like the prickly pear plague of the 1920s that hurt farmers. Only now it hurts home-sellers.

If you are selling a property, agents manipulate you emotionally. They make you feel it’s “fair” for you to pay to advertise your home. But, in real estate, “fair’ is as rare as, well, as humble agents.

It doesn’t matter how often I see this scam; it makes me wild. Especially how agents prey on the inherent goodness of sellers. Decent people like nurses and paramedics, who spend their lives helping others.

People such as Elizabeth, a nurse in the cardiac ward of a hospital. Elizabeth saves lives. If a real estate agent was Elizabeth’s patient, she would fight to save the agent’s life. Her patients’ welfare is her priority.

But if Elizabeth was the client of that same agent, the agent would con Elizabeth with the VPA scam. Most agents make their welfare their priority.

Caring for people is the nature of nurses. It’s why they are the most trusted of the professions. The nature of most agents, however, is to take care of themselves, especially with the VPA scam. It’s why agents are the least trusted of all professions.

Here is how devious agents deceive decent sellers. And emotionally “guilt” them.

THE ‘GUILT TRIP’ TRAP.

Agents will make you feel that, as it is your home, you should pay the advertising.

If you are like most sellers – inexperienced – you may not know that, everywhere else in the world, advertising is included in agents’ commissions. VPA is a nasty Aussie scam.

You may be shocked to discover that commission is as much as, say, $50,000 (2.5% on a $2 million home) and advertising costs – payable in advance (or via a grubby money lending pay-later mob slugging 50% interest) – can be another $20,000.

Agents say the more you spend advertising, the more your sale price.

What agents will not tell you is that they already have buyers known to them. Most agents are lazy. Instead of following-up buyers, they take your money to promote themselves and attract buyers known to them.

The honest meaning of the letters VPA should be Vendor Promotes Agent.

Do not fall for this scam. As I often say, if you went to a butcher to order steaks for a barbeque, imagine if the butcher said: “Give us money to advertise to find some cows.”

Sound stupid?

It’s no more stupid than agents asking you for money to find buyers.

Please get this: Just as you buy meat from a butcher, so do you “buy a buyer” from an agent. You do not go to an agent to buy advertising to promote the agent.

“But it’s your home,” wails the agent. “It’s only fair you pay advertising. If I pay and you don’t sell, I lose my money.”

Do not fall for this guilt-trip con game.

Here’s what happens if you get suckered into paying money, supposedly to advertise your home: Other home-sellers contact the agent. The agents then sell these other homes and earn tens of thousands of dollars in commission.

All at your expense.

Let’s think about something. Most agents don’t like you to “think about it”. And here’s why.

If you pay the advertising, shouldn’t you get the commissions from homes the agents find and sell? You paid for the agent’s leads. You should “own” these leads.

No, this is the scam.

These VPA agents want it both ways. They give you the risk. But they take the reward. They charge you for advertising then pocket commissions from the sales from your money you spent advertising. Plus, often a major kickback (they call it a “rebate”) on your advertising money.

And guess what?

If your home does not sell – because you refuse to drop your price – you lose the advertising money.

With the VPA scams, the agents can’t lose. Only you, the sellers, can lose.

This happened to Elizabeth. She put her home for sale. The agent promised her $800,000. He charged her $3,000 advertising. He then pressured her to sell for $700,000. “The market is softening,” he said.

Rubbish. Property is still booming in her area.

Elizabeth refused to sell for lower than the agent quoted her.

So, she lost $3,000 for “advertising costs”.

As happens with the VPA scam, the agent got free promotion for himself (they call it “profile”).

The agent also got plenty of extra buyer leads. Indeed, in this case, the agent picked up several sellers and listed and sold at least two other homes – with a commission of $40,000 for one home and $53,000 for the other home. Maybe more sales will come soon.

Yes, the agent got $93,000 in commissions (plus more VPA scam money) as a direct consequence of the $3,000 advertising money spent (lost!) by Elizabeth. So far.

Elizabeth, the nurse who spends her life saving lives (of people like agents who rip off people like her), lost her $3,000.

This happens to thousands of sellers: The agent profited from the loss of Elizabeth. To profit from losses of clients is highly unethical. That’s the VPA scam, the financial prickly pear.

I asked Elizabeth: How long would it take you, a nurse, to save three thousand dollars?

Her answer: “Maybe three months.”

And you wonder why I get wild at these agents who recklessly destroy the savings of decent people like Elizabeth with VPA scams.

PROTECT YOURSELF.

What can you do to avoid property’s financial prickly pear? The VPA scams!

First, stand up for yourself.

Follow the Golden Rule: “NEVER PAY ANY MONEY UNTIL YOUR HOME IS SOLD and you are happy [with the price and the service].”

Second, ask the agent: “If you want me to pay thousands of dollars advertising to find a buyer, why do I need you? I can place my own advertisement and save the commission.”

As many sellers are now doing: Finding their own buyers and making their own sales. And believe this: Many are not only saving tens of thousands of dollars in commission and the VPA scam but, they are also getting hundreds of thousands of dollars more than the agents could get. [Feel free to ask us how].

Please don’t fall for another other great con line – “Agents are great negotiators”. Try asking any agent how many books they have read on negotiation. Most have read none.

Show them this article.

And ask: “If I pay advertising, will I get the commission on sales from my advertising?”

Finally, just say this: “This is my home. I want an agent who takes the risk, not one who gives me all the risk. If you think my home needs advertising – because you don’t have any buyers on your books – you pay. When you find a buyer acceptable to me, then – and only then – I will pay you.”

Yes, only pay when you get the result you want.

Just like when you buy meat from a butcher.

This is the way business should be. It’s what smart sellers now demand. They pay when they get the result. Not before.

It’s the way to sell your home without being part of the prickly pear VPA scam!

*************

The post Property’s Prickly Pear appeared first on Scott Kim.

How to spot smarter agents and sell for more

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/the-high-price-of-stupid/. 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: Apx 7.5 mins

Most real estate agents have three characteristics: Greedy, Lazy and Stupid.

GREEDY

Greedy is not too bad – provided sellers control the agents.

Don’t sign up for longer than 42 days (six weeks). If you give agents time to condition you down in price, that’s what they’ll do.

At the expiration of each six-week period, you can sign-up for another six weeks – if you wish. If not, choose another agent.

The big point is this: You are in control.

Offer the agent a high commission in return for a high price. If they think they are going to get a big payment for a big sale price, greed will make them try harder. But always remember, that’s a big IF. You can negotiate an agent’s commission up to the point of sale.

Studies have shown that when agents sell their own homes, they get better prices than when they sell clients’ homes.

LAZY

Don’t reward laziness.

For example, it’s less work for agents to nag one seller to lower the price than to contact several buyers to increase the price.

Hold out for your price. Stubborn sellers get higher prices, as agents know. They may not like you, but if you assure them that you are serious, most will work hard to get the price you want.

And then, of course, once they get you a price that makes you happy, tell them you want it “net.” In other words, they must add their commission.

They’ll get cranky, but who cares, it’s thousands more for you.

Watch how much harder they work when they are fighting for their own money.

STUPID

The biggest cost of selling is not the agent’s commission, it’s the agent’s stupidity. Your family home is too valuable to place with most agents. They are too stupid to negotiate the highest price for you.

Add this to their lack of care, it means you’ll have stupidity and apathy. That’s a dangerously expensive combination.

With today’s prices, it’s common to see homes sold hundreds of thousands of dollars below true value. This is especially true with auctions, a favoured method of stupid and dodgy agents.

Of the three qualities possessed by most agents – greed, laziness, and stupidity – the final one, stupidity is the worst.

If you don’t believe most agents are stupid, ask yourself: Have you ever heard of anyone failing to qualify as a real estate agent?

No, neither have I.

I have never seen an agent fail to get a license to sell real estate – which should be called “a license to vandalise the value of homes” because that’s what stupid agents do.

You are better off selling your own home (especially when you realise there’s little to no “selling” involved) than placing it with a stupid agent.

BE POSITIVE

Be positive. Learn to recognise the smartest of what is, essentially a stupid bunch.

And yes, sometimes, selecting an agent is more a case of choosing the one you dislike the least rather than finding a smart one that you like.

The difference between a smart agent and a stupid agent can mean as much as 25 per cent of a home’s value. On a million-dollar home, a stupid agent could cost you as much as a quarter of a million dollars.

Recently, a farmer sold for an extra $14 million. He told his stupid agent to cancel the auction and switch to a ‘best offer system’ – while maintaining confidentiality.

Smart agents use the right strategy to get the right price.

The right price is the highest that any buyer is willing to pay.

HOW TO PICK SMARTER AGENTS

NEGOTIATORS. Smart agents study their craft. Instead of common training courses which teach agents how to “grind” sellers down (yes, that’s the term used these days – “grind ‘em down”) – smart agents study negotiation.

How do you tell if an agent is a good negotiator and capable of achieving the highest price possible?

Ask them to tell you how they plan to get the best price.

If they give you the standard cliches – such as: “The market sets the price” or “It’s only worth what the buyers are willing to pay,” reject them.

Unless you are impressed, don’t hire the agent.

Here is what to say to all agents: “Please tell us how you will get us the highest price.”

HIGH, HIGHER, HIGHEST. Smart agents know the difference between a high price, a higher price, and the highest price. The difference between the three levels can be huge.

Many times, stupid agents claim to have got a “high price” or even a “higher price” but they did not get the “HIGHEST PRICE”.

So, ask the agent: “Can you explain the difference between high, higher and highest price?”

DON’T FOCUS ON ADVERTISING.

Smart agents protect the value of a home. The minute a property is advertised, especially on the Internet, it enters the “comparative market”. Buyers compare prices. They buy properties offered at the lowest prices. It’s madness. Most sellers fall for it.

Here’s an example: An investor wanted to sell a home unit. It “owed” him $700,000. He wanted to ask $750,000.

The [stupid] “managing” agent said: “No way. When it goes on-line, buyers will see similar units as low as $600,000.”

The owner instantly said: “Well, don’t put it on-line!” to which the [stupid] agent asked, “How can I find buyers?”

The owner hired an agent who used an old-fashioned method – work. The agent called investors.

He asked them: “Would you be interested in another investment property with a first-class tenant?”

He only called twenty-five investors to get four inspections. He sold the unit for $727,000.

BANKS OF BUYERS

Smart agents keep records. They note which buyers are looking in which areas. When a property comes for sale, smart agents call buyers in their “bank” and offer them the chance to get in early.

Such buyers often pay a premium price.

Smart agents are usually ethical. They know that if they make owners pay for advertising, most times, this money is wasted.

Most (sometimes “all”) of the buyers who respond to advertising are known to the agent.

There is a maxim in selling: “Advertising is what salespeople do when they are too lazy to call prospective buyers.”

Make sure your agent makes calls rather than waits for calls. You’ll save money on needless advertising. Plus, you’ll get a better price.

YOU CAN “SELL A SECRET”

Contrary to what [stupid] agents claim, you can “sell a secret”. Indeed, the biggest price – for any product, not just real estate – is when buyers find something secretive. Further, many buyers are conscious of privacy. Security is a big issue. Such buyers shy away from homes where hordes of sticky-beaks have traipsed through.

Only the smartest agents understand that the less you advertise, the more you get.

PAY ON SUCCESS ONLY

The dodgiest businesspeople demand a substantial payment in advance. They know that once the clients know the truth, they will be unhappy. They use glib lines about why clients must pay in advance.

Smart businesspeople have good intentions. They are confident they can make clients happy. They are also confident of success. They say to home sellers: “Pay us nothing until your home is successfully sold.” Most agents won’t make such an offer. But most agents are stupid.

As Earl Nightingale once said, “If honesty did not exist, it would need to be invented because it’s the surest way to succeed in business.”

NOT LIKE AGENTS

The smartest agents are not typical agents. If you find yourself thinking: “This person is nothing like other agents,” maybe you’ve found a “good ‘un”.

Most agents say the same things. They are riddled with cliches. They talk constantly about “the market”. They are vague about price. Or worse, they promise a huge price. Several suggest auction. Yet, as any smart agent knows, with auction, it’s near-impossible to obtain the highest price possible. Unless it’s a private auction, of course.

BUYERS UP NOT SELLERS DOWN

Smart agents are not interested in the lowest price sellers will accept. They focus on the highest price buyers will pay.

To give you an idea of the stupidity in real estate: One Melbourne agent is saying: “The only way to stop under-quoting is to make it compulsory for sellers to reveal their reserve price.”

Like all stupid agents, this bloke is focused on the “sellers’ lowest price”. Smart agents focus on the “Buyers’ Highest Price”. They know how to discover it and how to deliver it to sellers.

IN SUMMARY

Smart agents are the ones you need when you are selling, especially now, when prices in many areas are supposedly “falling”. Don’t make matters worse by hiring a stupid agent.

No matter how long it takes, find a smart agent to sell your home. If it takes you four weeks of interviews to find a smart (or the smartest) agent, it will repay you by several thousand dollars.

Smart agents only – that’s the least you and your family deserve.

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The post THE HIGH PRICE OF STUPID appeared first on Scott Kim.

And sell it for a better price

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/how-to-price-your-home/. 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

If you want to sell your home for the best price, there is one simple rule you must follow.

Put a price on it.

Never mind what agents tell you, if you fail to display a price; or worse, if you use a ‘price guide’ or a ‘price range’ you will almost certainly under-sell your home.

These days, thousands of sellers are being coerced into under-selling their homes because incompetent or deceitful agents persuade them to conceal the price.

It’s basic Negotiation 101 to display a price. It’s also honest and upfront. Buyers love it.

Be warned: Agents these days will apply enormous pressure to you to convince you to hide the price – or use one of those bait-price strategies. You must resist them. Stay firm. Be determined to sell your home in an honest manner, with no deception.

If getting the best price doesn’t matter to you, if you want a sale at any price, then do what most agents suggest: Hide the price or, advertise a lower price than you will accept.

Of course, your first reaction, when an agent suggests such a strategy, may be: “But we won’t sell for that price.”

Your second reaction may be: “Isn’t it dishonest to advertise a price we won’t accept?”

Well, of course it is dishonest. And illegal. But the real estate industry has managed to con authorities by allowing a “range” of price variances to disguise their deceit. Agents figure out ways to break laws as fast as laws are enacted.

When selling your home, an important point to understand is this: You and the agent have different goals. Your goal is to sell at the best price. The agent’s goal is to sell at any price.

Here is what most sellers fail to grasp: Whether the agent sells your home for a high price or a low price, the agent still gets a high commission.

The lower the price, the easier your home is to sell. And the faster the agent gets paid.

This is why agents are always pushing sellers down in price.

Here is a trap that catches thousands of sellers: Agents say: “Hey, hey, wink-nod, if we advertise a lower price, we will attract more buyers.”

Now, while it is true that a lower price attracts more buyers, here’s what is also true: You attract buyers at a lower price.

The agent then uses the ‘This-is-what-the-market-is-saying’ pitch. But here’s the trap: The agent is looking in the wrong market.

If you want to sell your home for say, $2 million, the first thing you need is a buyer who can afford $2 million. If you advertise it for, say, “$1.7 million to $2.1 million,” you will just attract buyers who offer you $1.7 million. Or even lower.

That’s what most agents want: If your price is lower, they sell your home faster. Pocket the commission and then find their next victim.

Look at all those price ‘ranges’ or ‘guides’ nowadays. How often do buyers see a property advertised “from $2.5 million to $3 million” and offer $3 million? Almost never.

By advertising a lower figure, you force your price lower. Never do it. No matter how good or how slick the agent’s spiel, you are almost always better off with an honest price.

Please realise how frustrating it is for buyers when they see no price or when they are “suckered” with a bait-price. Imagine if you try to buy a car and there are no prices. How would you feel?

What about a fridge or a washing machine? You need a price. If not, you get frustrated.

Here’s a golden rule of negotiation: Never make your customers angry.

With so much deception these days, with many agents failing to give buyers a straight answer, you will attract more buyers – and make them a lot happier – if you display an honest price.

And even if you don’t get as much interest, so what? What’s the point of having lots of interest at an unacceptable price? The only advantage is for the agent who can say: “Look at all this activity, this is what the market is saying, you need to accept this offer, it’s the best you’ll get.”

Rubbish.

Many times, agents tell sellers that an offer is “the best you’ll get”; the sellers hold out and, sure enough, the home gets sold for a higher price later.

Be wary of agents who say, “If you put a price on a property, you can only go down.” This shows their lack of skill at negotiation. If you display a price and two buyers wish to buy at that price, you can ask each buyer to make their best offer. You accept the best offer. Recently, an agency that always displays prices, reportedly sold more than half their properties in one month above the asking prices. They are constantly selling similar properties for more than other agents in their area.

Do not be frightened of selling too low by displaying a price. But, again, be careful that you do not leave it too high for too long. If an agent has done everything possible to find a buyer, then you can gently reduce your asking price – until you find a buyer.

Also, be wary of the “more buyers” trap. Agents constantly talk about “more buyers” or “more enquiries”; but how many buyers do you need? Just one. The best paying one.

And, believe it, agents who display prices are always finding that one best paying buyer. They are getting far better client satisfaction – without fake reviews (the latest big scam with agents) – and, best of all their sellers are getting great prices.

So, how do you decide what price to display?

Well, if you are lucky enough to find an agent you trust, this agent will guide you.

If not, invest a few hundred dollars and hire an independent reputable valuer, one with no connection to agents. Overall, valuers are more honest than agents. In addition, valuers do not have a vested interest in inflating the price. You pay them regardless of the price they value your home.

Michael Kies from South Australia is one of the most honest and competent agents in Australia. In his real estate career, he averaged 11 sales per month for a dozen years. He is now a respected real estate trainer. Recently he made a comment that is echoed by thousands of consumers: “The real estate world has gone mad”. He was referring to the madness of price ‘ranges’ and the damage it does to sellers, most of whom never realise what’s happening.

Michael never used deception to make his sales. As a great negotiator, he knows that a fair starting price is the best way to get a great finishing price.

It’s true: If you want to sell your home for the best price, the best rule is to put a price on it.

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The post HOW TO PRICE YOUR HOME appeared first on Scott Kim.

Don’t let them take your money.

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/lazy-real-estate-agents/. 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: 6 mins apx

Zac is a Sydney schoolteacher, one of the best. Zac cares about the children with whom he spends each day. Indeed, he cares so much that he takes extra courses (outside the school or Education Department) on how to be a better teacher. Given how much his students admire him, Zac is certainly a successful teacher. Yes, surely one of the best.

As well as teaching subjects in the school curriculum, Zac also teaches children how to live a good life. His pupils learn values such as honesty, industry, and responsibility.

“Zac’s kids” are the best-behaved kids in the school. That makes Zac proud.

Zac is the sort of teacher that children remember all their lives. He is influencing hundreds of future citizens.

Well done, Zac. You – and teachers like you – are hidden heroes in society. Being a teacher is not easy in the 2020s, which is why teachers are among the most trusted of all the professions.

Unlike real estate agents who are now the least trusted of all the professions.

Last week, Zac decided to sell an investment apartment in Sydney’s western suburbs.

He contacted the agent who’d been collecting his rent for several years.

MEET ZAC’S LAZY AGENT

The agent told Zac his apartment was worth around $850,000. After paying out his loan, Zac and his wife would need a bigger loan to buy a family home. Sydney prices are high, especially on a teacher’s wage.

Zac asked about the agent’s costs. The commission was 2.5 per cent, a little steep, but Zac remained tight-lipped.

But then the agent said Zac must pay $4,500 for “marketing costs”.

Zac was shocked. He had previously sold two properties without paying marketing expenses – or indeed any costs – before a sale.

The agent replied: “How long since you last sold a property?”

“About ten years,” said Zac.

“Ah well,” said the agent. “Things have changed.” The agent smugly said that sellers now pay marketing costs – usually thousands of dollars – when they list their properties. Regardless of whether their properties sell, marketing costs still get paid.

Zac said he didn’t feel comfortable.

The agent was ambivalent. “That’s the way it is,” he repeated. “It’s the policy with most agents.”

AGENTS’ POLICY OR CLIENTS’ POLICY

Zac had researched the real estate industry. He’d read articles including one from this author on the topic of “company policy”, a common term used to shut-down dissent from customers in many industries. Fair or unfair, doesn’t matter. Company policy is company policy.

But $4,500 is a lot for a schoolteacher. It would take Zac and his wife at least three months to save such an amount. Zac’s prudent nature was not going to allow him to pay $4,500 without a valid reason.

Like many savvy consumers – in today’s treacherous business world – Zac and his wife have set their own ‘Family Policy’.

They had heard about agents who offer “No charges until sold,” and that’s the policy they embraced.

Zac had also heard about an agent in Melbourne called Scott Kim.

HARD-WORKING AGENTS

Despite their dreadful reputation for dishonesty and now, as Zac was discovering, their laziness, there are some agents – albeit a minority – who are scrupulously honest and who do work hard for clients. Best of all, these agents never charge for marketing or commission until two results are achieved: First, a property is sold at the highest price. And second, when sellers are happy.

Scott Kim is such an agent. Even though he works in Melbourne, his work ethic can apply to any agent in Australia.

When Scott listed an investment apartment, instead of asking sellers to pay thousands of dollars in [needless] marketing costs, Scott used another method to find the right buyer.

That method is hard work – something that’s anathema to most agents today.

Here’s what Scott did…

Knowing his agency managed properties for hundreds of investors, Scott telephoned investors and asked if they’d be interested in another investment property.

After just 25 calls, Scott had 14 investors interested. He made five appointments. Within two days, he had two buyers offering an enormous price – far above the price for similar apartments in the same area marketed on websites.

This is exactly what Zac’s agent could have (and should have) done. Instead of asking a schoolteacher on a meagre salary to pay $4,500 for marketing expenses so that this lazy agent could sit on his bottom and wait for buyers to call, the agent should have done what agents used to do (yes, ten years ago when Zac last sold).

LAZY AGENTS COST THOUSANDS OF NEEDLESS DOLLARS

Things sure have changed. Agents have become greedier. All over Australia, agents now ask sellers to fork out thousands of dollars in marketing expenses (in addition to commission) purportedly to “find buyers”.

But agents have prospective buyers. For investment properties, many agents have hundreds of investors for whom they collect rent. They should contact these investors before asking sellers to waste thousands of dollars in needless marketing costs.

As anyone who understands the real estate industry knows, the purpose of real estate marketing is not to promote properties, it’s to promote agents – lazy agents.

It’s not just investment properties where agents expect sellers to fund their laziness, it’s all properties. Here is what happens all over the country:

A home seller calls an agent. The agent persuades (cons) that seller to pay thousands of dollars in marketing costs – let’s say $5,000 (often much more). The agent advertises the home and sits at an open-inspection for 30 minutes on Saturday.

Let’s say – in three weeks – 200 people inspect that home.

The home is then sold – to one person.

That means 199 people inspected the home and did not buy it. Sure, many will be sticky beaks, but many will be prospective buyers for other local homes.

The next week the agent gets a call from another homeowner in the next street. Again, the agent persuades (cons) the second sellers to fork out $5,000 for marketing costs.

And guess what?

The same people who inspected the first property now inspect the second property.

Obviously, the agent should have called all the surplus buyers from the other property before asking the second sellers to pay $5,000 to attract the same buyers.

ZAC INVOKES HIS FAMILY POLICY

Zac told his agent: “It is out family policy to pay nothing until our property sells. We suggest you contact your current investors or prospective buyers before you ask us to waste thousands of dollars. If you do not want to accept our policy, we will find an agent who does accept our family policy.”

Like many sellers, Zac was too polite to say something else.

Such as: The average commission in Australia is now about $20,000. Commissions have risen about seven times higher than the average wage (yes, including schoolteachers). On average, an agent spends four hours to sell a property – most of which is spent conditioning sellers down in price. To earn $20,000 for four hours, is $5,000 per hour.

To demand another $5,000 in addition to the $20,000, well, as many sellers – including Zac – are now saying: “It’s obscene.”

Well-informed sellers are now looking for agents who are smart enough to realise that placing the interests of clients first is good business. Everywhere else in the world (except NZ) agents have one charge. It’s called commission and it’s only paid when a home is sold.

Your family policy should be this: Never pay any money to any agent – especially for “marketing costs” before your property is sold and you are happy.

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FOOTNOTE: Although Zac’s rental agent belongs to a network with the slogan: “We put you first,” Zac realised that this lazy agent was putting his family a distant second. Let’s hope Zac teaches his pupils how to use prudence and character to stand up to lazy agents. And let’s hope Zac’s story becomes an example and an inspiration to thousands of property sellers, thereby collectively saving them tens of millions of dollars every year. Don’t let agents take money that will take you months to save. If $5,000 an hour is not enough for agents, then not only are they lazy, they are also greedy. And worst of all, by not doing what’s best for their clients, is stupid.

Lazy, greedy, stupid – the three characteristics of so many agents today.

But not for you.

Find a hard-working, decent and smart agent. Someone like Scott Kim – or like Zac the schoolteacher. People of character. Not con artists.

Finally, if you can’t find an agent who’ll agree to such a fair condition, contact us at Jenman Support on support@jenman.com.au. We will find you a good agent. If not, we will show you how to sell without an agent.

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