BEAT REAL ESTATE LIES
And sell your home for a better price.
By Neil Jenman
If Robert had lied about the price of his home, he believes he would have sold it by now. He says the truth cost him a sale or, at the very least, delayed the process.
Robert is a first responder. He saves lives. He is a man of integrity. When choosing to sell his home, he rejected some methods because, as he said it, “They put a bad taste in his mouth”
He decided to do what some owners are doing successfully – sell without an agent.
He felt that anything the agents could do for him, he could do himself.
Except lie.
Lying is not in Robert’s nature. He is an upfront bloke. He believes in playing it straight, especially with home buyers. He knows what it is like to be misled by agents. Although he was going to do what most agents do, there was one line he was not prepared to cross.
He would not lie.
And so, after ten weeks, he has not sold his home.
Here’s what happened:
Robert got his home ready for sale. Renovated to a high standard, it was a top-quality property.
He couldn’t see the point in handing over $30,000 for an agent to do something that he himself could easily do.
Based on comparable sales in his area, Robert figured his home was worth $1.4 million.
But while agents he interviewed agreed that he “might” get $1.4 million, they all wanted to promote it with a bait price or a ‘price range’ strategy.
As there was no way Robert was willing to sell for less than $1.4 million, he couldn’t see the benefit of advertising below that figure. This was despite the agents all telling him: “But that’s the way it’s done these days.”
Robert wanted nothing to do with such deception.
And besides, as he rightly assumed, advertising his home for a lower figure would merely attract lower paying buyers.
But Robert made a mistake. He failed to understand that, in his area, buyers are so accustomed to agents lying, they have come to expect it. And to prepare for it.
Here’s how it works….
Whatever price the sellers want, the agents quote about 20 per cent less to the buyers. For example, let’s say the sellers want $1.4 million, the agents quote as low as $1.1 million.
If the sellers want, say, $1.6 million, the agents will quote $1.3 million to buyers.
Of course, once the buyers have had this trick played on them two or three times, they wise up.
And so, whatever price the agents quote, the buyers add two or three hundred thousand dollars to the quote.
But here’s where things went wrong for Robert. When he told the buyers he wanted around $1.4 million, they assumed, as with agents, that he wanted around $1.7 million.
“Far too much,” they all thought. And so, they didn’t buy Robert’s home. He didn’t realise that, if he wanted to sell for $1.4 million, he should have invited “offers above $1.2 million”.
Poor Robert, he literally had to watch buyers come to his home and then buy a lesser quality home from one of the agents for the same price he wanted.
One of the factors that buyers most despise in today’s real estate world is all these deceitful tricks with the price. What happened to the days when you could see a price on a home and know that price, if it was the best offered, would be accepted by the seller?
But that’s not the modern way. The modern way is to deceive both sellers and buyers.
Most agents care about one thing only – making a sale. They win houses for sale by quoting a false high price to sellers and then they attract buyers by quoting a false low price.
Meanwhile, in trying to figure out what agents are doing, both sellers and buyers are forced to second guess the agents.
When selling, if an agent quotes them $2 million, sellers figure they need to deduct about 20 per cent. Two million dollars means $1.6 million.
When buying, if an agent quotes buyers $1.4 million, they figure they need to add about 20 per cent. Therefore $1.4 million means close to $1.7 million.
What a sick, sad situation. No wonder 92 per cent of consumers don’t trust agents (never mind the dodgy ratings on “Rate My Agent” where unhappy sellers are not allowed to rate the agent).
The whole real estate industry is a massive joke. And not even a funny one.
Most agents are too stupid to realise that treating customers decently and speaking the truth is the key to attracting customers. As Earl Nightingale once wrote: “If honesty did not exist it would need to be invented because it’s the best way to getting rich.”
Try telling that to most agents.
Sellers, please stop tolerating such deceit. Do not let agents promote your property at a price below what you will accept – no matter what the agents tell you. Sure, promoting a lower price will bring more buyers. But it brings buyers at a lower price.
Until such time as sellers tell agents: “Unless you play it straight, you are not going to be my agent,” agents will continue to lie and cheat.
It’s up to sellers to say to agents: “Put a price on my home and negotiate fairly and ethically.”
That’s the best way to get the best price. It’s what the better agents do.
A better agent means a better price. So, it’s better to spend two or three weeks searching for an honest agent than to spend two or three months stuck with a dishonest agent.
Let’s start now. You, the sellers and us, your supporters, at Jenman Support.
Please contact us on 1800 1800 18 BEFORE you contact any agents.
Let us help you find the best agent. And get you the best price.
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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.
August 18, 2020 @ 9:59 am
I have read and enjoyed many of your articles and agree with most however this story makes no sense to me whatsoever. One would have to assume buyers are complete fools. If Robert lists his home at 1.4M why would a buyer think “oh he must want 1.7, so I wont make an offer” That defies any common sense. A buyer might think Oh wow it’s worth more than that, make an offer of 1.4 given that’s what is being asked, Robert accepts the offer and both parties walk away happy!
August 18, 2020 @ 2:16 pm
I felt exactly the same thing reading this ‘story’ Fred. If I was a buyer walking into a property where the vendor was doing the selling and I was interested, the very least I would do was make an offer and I’m sure many other potential buyers would do the same.
August 19, 2020 @ 2:31 pm
Dear Mr Steinkellner,
Firstly, thank you for saying that you enjoy my articles and that you agree with most of them. That makes me feel very good as I try hard to get important information to consumers.
Your remark, however, that my latest article “makes no sense” is quite correct – to an honest and intelligent man, which I assume applies to you.
With agents, however, it’s not only hard to find any who are both intelligent and honest.
I can assure you that what I have written is very true – annoyingly, frustratingly and heart-breakingly so.
What happened was just what I wrote: The buyers who saw the home promoted at $1.4 million, assumed the sellers wanted $1.7 m, or at least $1.6m. So, let’s say that they are “looking up to $1.5m”, well, they are not even going to bother inspecting this home as they feel they will be wasting their time.
Their minds are telling them the following formula: ‘Quoted price PLUS 20 per cent = Minimum acceptable price’. “Therefore, this home is out of our range.”
I had a lengthy discussion with the owner and I agreed that this is exactly what happened to him.
It reminds me of a father whose young son said to him: “The reason I lie to you Dad is because you don’t trust me.”
Anyway, I hope this brief reply explains things a bit better.
Thank you again for contacting us.
August 18, 2020 @ 4:37 pm
Great article Neil.
It highlights how complicated everything becomes when most of the agents are dishonest, and buyers are then conditioned to expect this. How stupid it is that we live in a world where when we want to purchase or sell the biggest asset we will ever own in our lifetime, we have to play games and second guess one another. How stressful! It would be so much simpler and easier if we did just put a single acceptable price and view all offers. Everyone is on the same footing then. How does anyone possibly know this when entering into this world for the first time?
Even more reason to ask you for help beforehand!
August 21, 2020 @ 10:58 am
Hello Mr. Jenman,
This article is disconcerting to say the least along with the following comments made by all agents, “We have people who will de-clutter, pack and store the excess furniture, cupboard contents etc. during the sale period”. When I asked the cost I was told it would be ‘minimal’. Of course, homes for sale should be presented clean & tidy. So far we’ve managed to buy and sell 17 homes without paying extra for that ‘service’ in the past.
We would value your opinion.
August 24, 2020 @ 1:53 pm
Hi Neil, I have enjoyed your comments for some time. I have a story for you and would like your comment. Am I being too precious about this principle.
We listed the house for $440K and agreed to the building and pest inspection. The building report suggested there was work to be done( 40 y o home) to the tune of approx $ 10.000. The bank valuation was also 10 000 less than the asking price.
We agreed to drop the selling price to 430,000 and take the sale.
All good until settlement when the agents commission was calculated on the original asking price of 440,000. I pointed out that the selling price was the reduced figure of 430,000 and the commission should have been calculated on this. The agency argued their case and told me this is the normal procedure and there would be no adjustments.
Am I being too precious about the commission ethics?