How not advertising can get a better result
by Neil Jenman
READING TIME: 3.5 mins apx
Local agents said this apartment was worth “around $260,000”.
When we said the owner wanted “more than $300,000” (otherwise he’d lose based on what he paid with costs), the local agents laughed. They said lots of similar apartments were advertised on-line for under $300,000.
So, it was obvious – if we wanted a better price, we shouldn’t advertise. We needed a better way to sell this property.
When the apartment sold for $306,000 – with an agent whose office was an hour away – the local agents had one question: “How did that happen?!”
If you own a property, particularly an investment property, and if you do the same as this owner did, you may get the same as this owner got – a price far higher than local agents quoted.
Based on its rental yield of $20,000 a year, if we asked for $310,000, the yield would be a respectable 6.5 per cent. Clearly, the target market was investors. We decided to ask $310,000. It pays to be confident about your asking price.
It seemed obvious that local agents were selling properties too low. That’s a common phenomenon, however, because local agents often have price prejudice. They can be negative about their areas. We needed a “foreign agent”, one from outside this area.
Like many properties, this one should not be advertised on-line. Few sellers realise that when a property is advertised on-line, buyers compare similar properties and often buy the cheapest properties. Advertising on-line can force prices down.
To sell this property for more than $300,000, we needed a competent agent prepared to do things differently and get a different result.
I thought of Scott Kim, an ambitious young agent who loves a challenge. I called Scott and asked him if he was interested in selling this apartment.
I told him I didn’t want to advertise this property on-line.
I told Scott: “Advertising is what salespeople do when they are too lazy to talk to people.”
He laughed and said, “So who are you going to ask me to talk to?”
His office had about 165 landlords for whom they were managing investment properties.
“Scott, what I want you to do is call your landlords – who’ve all bought at least one investment property. Tell them you have just listed a property. Tell them its positive features. Ask if they’d like more information.”
Three days later he had called 65 landlords (investors). Of those, 30 were interested. Scott arranged for eight to see the property. Only five showed up, but two made an offer.
One offered $295,000 and another offered $300,000. Bingo, we got it!
Using his negotiating skills Scott got the price up to $306,000. The owner was ecstatic.
Thousands of properties should be sold in this manner.
When you avoid advertising on the internet, you avoid getting low offers from buyers who are ‘comparison shopping’. Your property doesn’t get compared to the ‘cheapies’ in the area.
Any agent could have done what Scott Kim did, although few do. Scott sold the apartment for $46,000 more than the local agents quoted. He sold it without a cent in advertising. And he earned himself a glowing 5-star Google review from a delighted owner. He was hailed a hero.
What a strange real estate world. An agent does what all agents should do – uses initiative and hard work to put more than $40,000 extra in the owner’s pocket (including the saving on needless advertising costs) and he’s hailed as a hero.
I wouldn’t call Scott Kim a hero.
He’s just a darned good agent, the sort all owners should chose when selling their properties.
PLEASE NOTE: Our focus is upon helping consumers. Abuse from agents on our web site or Facebook page will be deleted, ignored or well publicised – it depends on our mood.
But one thing will never vary: We will never stop doing what we love most – helping polite and honest consumers get the best deal possible in real estate. And, of course, if any agents are serious about taking care of consumers, we’ll help you too. Thank you.