THE MYTH OF CHOOSING A “BIG AGENCY”
By Lisa Hayden
“You can’t sell a secret you know.” This is a line given by thousands of agents to thousands of home-sellers in order to persuade sellers to splash out more and more money advertising their homes. The theory goes like that the more places you advertise your home, the more buyers you reach.
Of course, anyone who knows anything about basic marketing knows that such reasoning is nonsense because most buyers look in several places during their search for a home.
The main purpose of real estate advertising (and all agents know this because it’s one of the first things they are taught in ‘agent kindergarten’) is to increase the profile of the real estate agent – and, in these days of the “celebrity salesperson” to increase the profile of the salesperson.
Agents who tell sellers that advertising their homes at huge expense is necessary are either incompetent or dishonest. Most (probably about 90 percent) of the money spent by sellers advertising their homes is totally wasted. It’s a monumental rip-off. And don’t except the newspapers or the on-line real estate portals to say anything about this massive rip-off because they are the ones profiting from it – to the tune of tens of millions of dollars.
But things get worse.
As well as perpetuating the myth that more advertising gets sellers more money for their homes, many agents also tell sellers that listing their home with a big agency (“Hey, look at us, we’ve got 34 salespeople!”) leads to a better deal for the sellers because they have more salespeople trying to sell their home.
Not only is this reasoning misleading, it’s a blatant lie. Instead of a benefit, most sellers who list their homes with the BIG agencies are at a distinct disadvantage.
This is due to what’s becoming known as ‘The HOG FACTOR’.
Here is what most sellers don’t know…
In most of the big agencies, the salesperson who listed the home is the only one who gets to handle enquiry from buyers about that home. These agents effectively hog the homes for themselves. They don’t let the other salespeople in the office show the home to buyers. The hogs are keeping the homes a secret to all but the buyers they happen to meet.
A large real estate office in Queensland is promoting that they are ‘doing something different’ by allowing all their sales agents to show buyers through all their homes instead of each agent only showing their own properties.
Innovative? Not at all. Ethical agents have been doing this for years.
Agents who place the interests of their sellers ahead of the interests of the salespeople will always allow any salesperson in their office to show any home to any buyer. These ethical agents would never allow any individual salesperson to “hog” a home in order to ensure that the listing salesperson gets all the commission. When salespeople share a home (as they should), they also share the commission on the home. This does not suit the greedy hogs. Oh no, they want it all for themselves.
So, here is the typical rort of the hog agents: Many high profile real estate offices use their large number of salespeople as a marketing ploy to attract sellers. They trumpet that they have 35 or more salespeople, yet what they don’t say, what they conceal, is that none of the salespeople are allowed to show their buyers through a home listed by another salesperson. While the seller thinks there is safety in numbers – that the 35 agents will be promoting their home for sale – in effect it’s like having 35 offices of one salesperson each where each salesperson hogs their own listings and actively avoids promoting the home through other salespeople in the agency. The sellers would have been looked after just as well by a one-man band; indeed, sellers would be better listing with a one-person agency because their homes would then be exposed to the entire enquiry that came into the agency.
So, what sells homes and how do sellers get the highest price for their homes?
Newspapers do not sell homes. Glossy brochures, floorplans, interactive apps on iPhones don’t sell homes. And agents who hog the homes that buyers want to see definitely do not sell homes for the highest price possible! What sells homes are well trained negotiators who work with all available buyers to get the best prices for their sellers. Hogging the home instead of enabling all well qualified buyers to see it, means that the number of buyers is restricted. Restricting the number of qualified buyers definitely will not result in the highest possible price. In most big offices, the competition for the sale is all about who gets the commission rather than getting the highest price for the home seller.
So, all this nonsense about spending huge sums of money to attract buyers to an agency, only to discover that only one salesperson is allowed to speak to each buyer is a dreadful betrayal of the sellers’ trust.
Hog agents are potentially costing sellers tens of thousands of dollars because many buyers are not permitted to see it – unless, of course, they deal with the listing agent. But a salesperson who has been contacted by a buyer is not going to hand that buyer to another salesperson if there is no commission for the first salesperson. Rather than hand over the buyers to the listing salesperson, other salespeople will try and sell “their buyers” one of their listings. So, effectively, most of the salespeople in an office will be workingagainst the interests of the seller who is listed with a hog agent.
So how do you ensure your agent is not a Hog-agent?
Ask the agent a simple question: If I list my home with you, will other salespeople in your office be allowed to bring their buyers through my home? If the agent says, “Sure, of course,” then don’t take their word for it: mystery-shop that office. Call up and ask for information about a home for sale. If you are told that a particular salesperson is not available and if you are not given to another salesperson to discuss your enquiry, you are almost certainly dealing with an office full of Hog agents. Do not list your home with a hog, not under any circumstances.
And do not spend thousands of dollars advertising any agent – which is what sellers who are persuaded to part with thousands of dollars are effectively doing.
All ethical agents have data base lists of buyers who are currently looking to buy in their area. There is no need for an agent to advertise every home on its books to attract every buyer in the area. Most of the buyers will contact most agents in the area they want to buy, even if those agents only seem to have a low number of homes for sale and a low number of salespeople.
So, clearly, when selling your home, you will always be better served by choosing an agency where all the salespeople share all the listings, rather than choosing an agency where you are listed with a hog agent and all the other salespeople are forbidden to show your home to buyers. Make sure all salespeople in an office try their best to get you the best price.
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