BEWARE THIS PRICE-LOWERING TRICK

How thousands of sellers get caught and lose thousands of dollars.

by Neil Jenman

Reading Time: 4 mins apx

Real estate consumers: If only you knew what goes on behind-the-scenes in real estate.

You’d be a lot safer.

You’d have a lot more money.

You’d have a lot less stress.

You’d also be more likely to enjoy yourself.

Yes, I wish real estate consumers could hear what agents say among themselves.

And I wish consumers could hear the unethical methods taught by trainers. Years ago, I got a legal threat from an agent-cum-teacher. He was teaching rookie agents how to get sellers down in price with auctions. His words were: “Sometimes sellers need a kick in the guts.”

His lawyer demanded I desist. I said I’d desist telling consumers if he desisted teaching such gross dishonesty. But that’s auctions – as agents know.

How I wish consumers could hear real estate bosses instructing sales staff to do what’s best for the company (“the brand”).

I wish consumers could hear how agents say, “All buyers are liars” and “Sellers are greedy”.

As if all agents are truthful and generous.

The only way I can partly make these wishes come true is by telling you what goes on in the real estate industry. One page – one book – at a time.

Or, best of all, encourage you to contact Jenman Support before you sell. We try to find agents with two qualities – honesty and competency. If not, we suggest you go it alone. And yes, we’ll support you to sell without an agent if you can’t find a good agent.

SAVING SELLERS FROM LOSSES.

Unfortunately, here’s what constantly happens at Jenman Support:

A home seller contacts us AFTER they sign-up with a typical agent (instead of BEFORE).

This means we have no chance of being paid (as we do not charge sellers for our support), but it does not mean we won’t help and support the sellers.

And yes, it’s more work to support sellers who’ve signed-up with a typical agent than to support sellers who’ve signed up with a good agent.

Once sellers have already signed-up with a typical agent, our aim is to minimise the damage to the selling price. Plus reduce – or even stop – the losses.

CHECK WITH US FIRST

One of the most common pieces of advice we give to sellers who’ve already made the mistake of signing-up with a typical agent (without being protected) is this: “Do not succumb to pressure from the agent without checking with us.”

Many sellers take us up on our offer. Messages fly back and forth: “Do this; don’t do that; say no; tell them to get lost; okay, you’re safe now, it’s safe to proceed.”

The following are messages between us and a seller who, unfortunately, signed-up with a typical agent before calling Jenman Support.

TEXT FROM JANICE

Signed-up with dodgy agent.

Dear Neil,

The agent is asking us to advertise our property for the following amount, but he still says he will try to get the price he first quoted us which is $1.1 million.

Do you think this is ok?

Thank you. Kind regards, Janice

Agent’s message:

Hey Team,

Please confirm you are happy to advertise the price guide.

$950,000−$1,045,000

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TEXT FROM NEIL TO JANICE

Dear Janice

No way!

He is using a common and nasty trick. He tells you that if he advertises a lower price, it will get more buyers.

He’s right – but it gets buyers at a lower price.

He then tells you, “This is what the market is saying”. But he’s looking in the wrong market!!!

And deliberately so.

If you want to sell your property for more than $1 million, the first thing you need is buyers who can afford more than $1 million.

By advertising it for 950 you will get offers well below $1 million, probably 850 to 900.

Gosh, I despise what these agents do. This is EXACTLY what I predicted this agent was going to do to you.  Breaks my heart to see this happen to good people.

But good on you for contacting me. I’ll protect you.

Sincerely

Neil

1. You are welcome to show this message to your dodgy (including this PS).

FURTHER POINTS

Many sellers fall for this trick. The agents say: “I’ve been doing this a long time; I know how to attract more buyers. We advertise a lower price and then talk the buyers up.”

Seriously, how often do you think buyers pay the highest price of the range? Never.

More likely, buyers will offer down from $950,000 – such as $900,000 or $850,000. Maybe less.

And here’s an obvious point many sellers don’t realise until it’s too late: If an agent suggests tricking buyers, you can be sure the agent will be tricking sellers. Dishonesty is rarely discriminatory.

FURTHER POINTS ON FALSE QUOTE TRICKS.

Despite the good efforts of authorities, false quoting is endemic in real estate. As quick as laws are passed to protect consumers, agents circumvent the laws.

Agents quote high to sellers to entice them to sign-up. And they quote low to buyers so they can get lower offers and tell sellers that “the market has spoken; you must listen to the market.”

In 2017, an agency in Melbourne – that describes itself-with words such as “honesty”, “respect” and “integrity” (as do most agents) – copped the biggest fine in real estate history ($880,000) for dishonesty. Salespeople were using an expression common among agents: “Quote ‘em low and watch ‘em go.”

False quoting helps agents condition sellers down in price.

And, of course, the lower the price, the easier a home is to sell.

So, if you’re selling and you genuinely want the highest price – don’t fall for the ‘bait price trick’.

Never allow an agent to promote your home at a lower price. It will cause your home to sell for a lower price.

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FOOTNOTE: For years, one of our most popular publications has been the booklet – 18 WORST MISTAKES MADE BY HOME SELLERS – And the Solutions. Thousands of sellers save money and stress by avoiding these mistakes. To access a copy, please CLICK HERE.

Please remember: When you are selling, call Jenman Support first. Phone 1800 1800 18 or email us on support@jenman.com.au.

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