THE THREE BIGGEST MISTAKES VENDORS MAKE IN CHOOSING THEIR AGENTback to blog
Posted 26 September 2017
Mistake 1: (Probably the biggest mistake of all)
Engaging an agent because you think they are a local specialist and as such, “own the data base” for that area.
It’s really quite easy for an agent with limited sales experience in one particular area to make him- or herself look like the reigning king or queen. They’ll lead their pitch with their “expertise”, their knowledge of your buyers and their “extensive data base”.
It’s a selling technique. Not a reality. Feeling secure with this pitch is dangerous.
There is no such thing as a particular agent “owning a data base”.
Buyers purchase a property based on broad-ranging research, and less often by seeing the property online or in print. If anything, an agent who specialises in one suburb can be more of a negative to a vendor than a positive.
Firstly, a suburb specialist can become too comfortable with their own price assessment. It’s usually based on their last sale in the area and who they still have on their books.
There are new buyers in the market every day and subtle shifts in the market regularly. More importantly, a more innovative approach to marketing matched with a more skilled approach to negotiation may have established a completely different benchmark price than that of someone with only local knowledge and the intention to simply to “turn the stock over”. The Peter Principle suggests that an agent “turning the stock over” is not your best bet.
Accepting a distorted price – up or down.
This is often a corollary of Mistake 1 – when an agent has made the vendor feel safe with the concept that the local agent “has the market cornered”.
Added to this is the age-old problem of agents over-quoting to secure the business.
The Department of Fair Trading has gone to extraordinary lengths to restrain over-quoting, but the industry is still rife with overinflated price quotes used to seduce vendors.
This is causing vendors to become disillusioned about our industry and distrustful of hard-working agents. And, quite frankly this is quite sad. The reality is that as much as you can rely on your doctor, lawyer or accountant to take care of your best interests, the same should apply to your real estate agent of choice.
A vendor who understands the current market can find a snapshot of sales to make a broad estimate. The agent should then be able to identify and articulate conclusively to the vendor the specific sales on which they can rely to identify an achievable price. If the agent cannot articulate as to why the price they have quoted is correct, then they are unlikely to be able to do so to a buyer.
Engaging an agent as a result of a discounted commission and or incentive based commission arrangement.
A highly skilled negotiator is worth their weight in gold, pure and simple. If an agent is so quick to discount their own commission, imagine how readily they might discount your expected price.
Secondly, if an agent is excited by an incentive driven commission then you need to ask yourself whether you have hired the right agent to begin with! If you have to incentivise them to achieve a result, then how safe do you really feel that the agent you have engaged is 100% committed to representing you in the sale at the maximum dollar achievable.
I regularly meet new friends at dinners and lunches who will talk about their disappointing sales experiences when they find out that I’m a real estate agent. They’re keen to tell me why they weren’t satisfied with their sales outcomes. These kinds of stories are 90% of the conversations I have. And that’s distressing.
Following one such conversation this week, I felt compelled to put pen to paper on behalf of the professionals that do exist in my industry. Those who have regularly set new benchmark prices regardless of market conditions, who provide a 24/7 service to their clients because they have been honoured with the opportunity to sell on behalf of that vendor, who take this mandate seriously. Because there needs to be a wake-up call for vendors to best understand that they can safeguard their asset with best representation by trusting their gut instincts and not being seduced by an agent’s self-promotion.
It is human nature to feel that relying on a data base gives them an edge, that an overinflated price means the agent is a “positive go-getter” and that a discounted or incentive driven commission means money in the vendor’s pocket. Unfortunately, there is NO NIRVANA.
Don’t make mistakes. Achieve a win-win for all:
- Like the agent you choose
- Review the way they market in the papers and online
- Choose an agent with proof of consistent broad-based knowledge of real estate and not just a suburb
- No one owns buyers, but even buyers feel more secure with an agent they believe is representing the vendor in the sale