How to survive it.
by Neil Jenman.
Anyone who gets involved in the property market – whether as a seller, a buyer, (and even an agent), has probably wondered why so many people tell so many lies.
As one buyer recently (and typically) remarked, “Why do all agents lie to me?”. The feeling is often mutual. There’s a well-known saying among agents, “All buyers are liars.”
As for sellers, well, agents have a variety of common labels they pin on sellers which range from the derisive “greedy”, “unrealistic” or “stupid” to the more polite, but no less common, “They are not prepared to meet the market. They’re bloody time-wasters.”
As for sellers’ opinions of agents, many think “all agents are nothing but a pack of liars.” These are the sellers who have usually experienced the trauma of having agents quote a high selling price and then, once the sellers sign-up with the agents, things take a sudden and dramatic change. Good news becomes bad news. Positive features of the home are seldom mentioned any more; instead, the negatives are highlighted, all dressed up in what agents call “market feedback”.
Yes, agents tell the lies and then use “the market” like a criminal uses an alibi.
So, first of all, let’s ask the truth about all these lies.
Do agents lie to buyers?
Yes, every day. How else can agents get buyers interested enough to inspect properties or turn up at auctions? The truth, to buyers, can be a real turn-off. Here’s another common saying among agents, “Quote ’em low and watch ’em go; quote ’em high and watch ’em die.”
Do buyers lie to agents?
Yes, of course they do, especially when it comes to making offers. The buyers want to buy for the lowest price possible. They often say to agents, “This is my best offer,” when they know darned well that they are willing to pay more.
Do agents lie to sellers?
All the time; if agents didn’t lie, they wouldn’t be able to get properties for sale. Sellers often call three or four agents and fire a question at them, “What’s my property worth?” The agent who tells the biggest lie often wins the business. The agent who tells the truth is shown the door.
Agents know – the truth can send them broke. Tell the lie, sign-up the sellers and then start telling the truth. Once the sellers are signed-up, they are effectively locked-up. No matter how badly agents treat them, signed-up sellers can’t sack the agents. It’s easier to get out of a marriage than to get out of most real estate contracts.
And, finally, do sellers lie to agents?
Yes, definitely. If sellers tell the agents the lowest price they’re prepared to accept, that’s the highest price they’ll probably get. Most sellers “load up” the asking price of their homes. And why shouldn’t they? They’re about to face a full frontal assault from both agents and buyers determined to talk them down in price. Lying is a matter of survival.
So, in summary, what generally happens in the property world is this: Agents are lying to sellers and buyers in order to win their business. Buyers are lying to agents in order to buy at a lower price and sellers are lying to agents and buyers in order to protect the value of their properties.
Everybody’s lying to everybody. The property game is a game of lies.
So, how do you survive the lying game?
Well, understandably, the first instinct when everyone else is lying is to lie yourself. It’s easy to think that the biggest liar gets the best deal.
But, no, that’s not necessarily so. Indeed, the more straight you play the property game, the more chance you have of coming out a winner.
So how do you play a straight game if everyone else is crooked?
What you should realise is that, in most cases, you are not dealing with crooks. Usually, you are dealing with good people who feel there is no option other than to play it crooked; or, at the very least, to bend the truth slightly, to be a little bit, shall we say, shifty.
The buyers who give agents low-ball offers – and pretend it’s their “highest price” – are only trying to get the best deal for their families. And if this means telling a white lie, so be it.
The trouble is that these “white lies” often backfire badly on buyers.
For example, a buyer inspects a home with an asking price of $700,000. The buyer loves the home (but tries hard not to display too much interest) and makes an offer of $650,000. Now, the buyer may be quite capable of paying more than $650,000, perhaps even of paying the asking price of $700,000.
But, no, the buyer plays the lying game and says, “I’ll give you $650,000 – that’s the most I can afford.”
A few days go past and, having heard nothing from the agent, the frustrated buyer calls the agent to find out what’s going on.
“Oh, that place was sold yesterday,” says the agent.
“For how much?” asks the buyer.
“Another buyer offered them $655,000 and they accepted,” says the agent, barely able to conceal the smugness.
“But why didn’t you call me before you sold it?” shrieks the buyer.
“Because you told me that $650,000 was your maximum,” says the agent.
Now, yes, in situations such as this, the agent has been incompetent but it doesn’t help the buyer.
The above scenario happens hundreds, perhaps thousands, of times every month in the property world. Bluffing (lying) buyers often lose out on the home they love because they told a lie about their maximum price.
So, what should buyers do? How should they play the lying game? Answer: they shouldn’t. If the buyers are in love with the home, they have to ask themselves the question: What’s more important to them – the home or their wallet.
If the answer is “the home”, then tell the truth. Give the agent your best price as your first offer. Indeed, give them an offer in writing stating something such as, “This is the highest price I am able to pay and if it is not accepted, there is no need to contact me again.” That’ll get attention.
Be truthful. Give your best price and then walk away knowing that, no matter what happens, you have told the truth and done your best.
Yes, perhaps, if you tell a lie you might save a few thousand, but do you want to risk it? If you are buying with your heart, then work out the maximum you can afford, tell the truth and then hope for the best. It’s better to pay a few extra thousand to win the home you love than to lose the home because you bluffed yourself out of the deal.
And, what about the sellers? How should they play the lying game.
Remember that the agent who quotes you the biggest price is possibly the biggest liar. And you’ll never really know if the agent is lying unless you hire the agent. And then, once you hire the agent, you are stuck with the agent.
No, you are not. You just have to know how to play the game.
And here’s what you do.
When an agent quotes you a big price for your home and you are tempted to sign-up, ask the agent to put the quote in writing.
And then say to the agent, “Well, you have told me the highest price you think you can get for my home, now please tell me the lowest price you think you can get for my home.”
You must insist that the agent answers this [lowest price] question.
And then you say to the agent, “If you ever ask me to sell my property for less than the lowest price you quoted me, you must also be prepared to lower your commission – at least by the amount you will be asking me to lower my selling price. If not, then I am sorry, but I will not hire you as my agent.”
Now, you are about to hear the four most important words about selling your property. You must burn these words into your brain. These are the words that decide whether you get a good deal or a bad deal. They are the words that decide whether or not you will beat the lying game or whether you will allow the lying game to beat you.
The four most important words when selling are these – You are the boss!
And don’t you ever forget it, not for a moment. It’s your property. The agent must do what you say – not the other way around.
Do not be bluffed. If the agent says to you, “But this is our policy,” then you reply, “Well, we also have a policy and that policy is that we require the people with whom we do business to be truthful. If you are truthful, you have nothing to worry about.”
And, also, be sure that when you first sign-up with an agent, you do NOT sign-up for a long period of time. Repeat: You are the boss. You do not have to give the agent a three or four month contract. You can give the agent a three or four day contract if you like.
Generally, you should sign-up with an agent for no more than six weeks. That’s plenty of time.
As for the price, don’t make the mistake of being too greedy. Everyone thinks their property is better than other properties. Lots of sellers make the awful mistake of asking too much in the beginning which means they usually get too little in the end.
Do you want to know what your property is really worth? With no lies, no games?
Then don’t ask an agent. Ask a valuer.
Yes, before you call an agent, pay a few hundred dollars and make one of the best of all property investments – hire an independent valuer.
Tell the valuer, “I am thinking of selling my property and I want to know the truth about its real value.”
Less than one in 50 (probably a hundred!) sellers make this wonderful investment. It’s one of the best ways to beat the agents and the buyers in the lying game. Do it.
You have a property worth several hundred thousand dollars, you are probably going to pay an agent several thousand dollars, so, at the very least, spend a few hundred dollars on a valuer.
And, finally, for you agents, how do you win the lying game? Yes, it can be tough for you. You are dealing with sellers and buyers who don’t trust you, who will usually think nothing of twisting the truth, of hiding important facts from you. So often, you will be the ‘piggy in the middle’ getting blamed by both the sellers and the buyers for the sins of the others.
The best thing you can do, agents, is to start spending more time with both sellers and buyers before you do business with them. Sit down and tell the truth, the whole truth and nothing but the truth.
When you go to the sellers’ home to give them a price quote, tell them that you are in a dreadful position. Tell them that, by calling in three or four agents and asking for a “quote”, they are giving all the agents, yourself included, an incentive to lie.
Agents, why not recommend to sellers that they hire an independent valuer?
Agents, why not offer to lower your commission if you ask the sellers to lower their price below the amount you quote them?
Here’s a final tip for all agents, all sellers and all buyers – from someone who has been watching the property industry for almost four decades: By far, the best way to win in the lying game of real estate is to refuse to have anything to do with it. Play it straight. Before you do business take time to understand the situation of other people – and then ask them to do the same for you.
If you are a seller, understand that the agent wants (needs!) your business and that if you ask the agent to give you a quote, you are inviting the agent to lie to you.
If you are a buyer, understand that the agent wants (needs!) you to get hooked on the home and that by hinting that you may get a lower price, the agent is going to get you interested.
If you are an agent, then remember this: If you want sellers and buyers to treat you well, to give you their business, then start showing some genuine care for them. Be the friend they need – and, for sure, you’ll make a lot more sales.
Everyone can survive the lying game if everyone takes just a little bit of time to think about why the property game is riddled with lies.
Once you understand the system, you’ll know how to play it – straight and safe.
FOOTNOTE: If you are a seller or a buyer and you want any help, then you can contact us FREE OF CHARGE and with no obligation by calling 1800 1800 18.
This article was written in May 2009