DON’T BE “SHORT-SOLD”

7 STEPS TO SELLING FOR THE BEST PRICE

by Jim Grigoriou

author of the soon-to-be released book,

‘The Real Estate Short Sell’

READING TIME: APX 8 minutes

Most properties are short-sold. Despite what agents say, I have done the research, I know the terrible truth: Most home sellers lose tens of thousands of dollars because their homes are short-sold.

The main reason for properties being short-sold is incompetent or dishonest agents.

Choosing the best agent to sell your home is critical. Don’t make the mistake of signing up quickly. An extra few weeks can mean an extra few thousand dollars on your selling price. Time searching for a good agent is better than time unsold on the market. Your major aim should be to prevent your property being short-sold.

Here’s some great advice for home-sellers, “It’s better to spend an extra three or four weeks to find the right agent than to spend three or four months stuck with the wrong agent.”

Once you sign up with an agent, if things turn sour – as they often do – you can be stuck with an agent you don’t like, an agent in whom you’ve lost all trust, for many months.

The best agent will get you the best price and make sure your home is not short-sold as happens with so many homes. And that could easily amount to an extra ten percent on your selling price.

Recently, a home was sold for $615,000. But the agent who sold the home was not the first to inspect it. The first agent quoted a “maximum of $550,000,” as the likely selling price. Another agent quoted $650,000 to $700,000. Three or four other agents quoted “around $600,000”.

Such massive price variations. Who to believe?

The owner knew that asking too much can be as dangerous as asking too little. If you ask too much, you can languish unsold for months. Some properties even stay on the market for years.

There are few factors more damaging to the value of a property than a long time on the market. The formula is simple: The bigger the time, the bigger the short-sell.

Here are seven steps that can help prevent your property being short-sold.

 

1. CALL A VALUER

Fortunately, the owner of the abovementioned property, confused with all the different prices quoted by agents, decided to contact one person unlikely to be biased or to have a vested interest in the sale of the home, a person who can generally be trusted to give an accurate price.

That person was a valuer.

The valuation cost $700.

But it gave the owner something he felt he could trust – an accurate price to ask for the sale of his home. The valuer estimated the home was worth $615,000.

Turns out that the valuer was spot on – within three weeks of being put for sale (at an asking price of $625,000), the home sold for $615,000.

Now, to be sure, every agent can tell you a story (or many stories) of how valuers got it wrong (agents are quick to smear anyone who discredits them) – and yes, valuers aren’t perfect.

But, let’s face it, the average valuer is more trustworthy than the average agent. And while valuers make mistakes, they don’t make as many as agents.

So please consider getting a written valuation on your home before getting agents to quote on the likely selling price.

And, remember, you can keep your valuation confidential.

 

2. RECORD THE AGENT

This step should be essential. You should record everything an agent tells you, especially when the agent is attempting to win your business.

There is nothing more important to an agent than getting houses for sale – known as “listings” – and some agents will say or do almost anything to win the rights to sell your home.

It’s a well-known truism in real estate – there are no second prizes. If agents don’t convince you to choose them, they get nothing, they miss out on thousands of dollars in commission.

But if you choose the wrong agent, the same will happen to you – your home will be short-sold by thousands of dollars.

Nothing forces agents to be truthful more than knowing they are being recorded. That flashing smart phone is like a truth serum.

Legally, of course, you must tell agents you are recording them. Don’t be shy. Remember it’s your home and you are doing what’s best for you and your family. Simply say to the agent: “To be safe and to reduce any confusion or misunderstanding, especially if we decide to choose you as the agent to sell our home, we hope you are okay with us recording what you tell us.”

If the agent is not okay, well, it’s obvious, this is not the right agent.

After all, what reason could any agent have for not wanting their words to be recorded?

 

3. THE SHORT-SELL FACTOR

The greatest cost of selling a home is a hidden cost. It’s hidden because most sellers are not aware it exists. It’s the ‘Short-Sell factor’.

The research is undeniable: most homes sold in Australia are short-sold; they have been sold for a lower price than they should have been sold.

For five years, I have studied this topic. I will soon release a book about it. I believe this book will collectively save Australia’s home sellers hundreds of millions of dollars annually.

Please, for your sake as a home-seller, I urge you to pay attention. Don’t take any notice of those abusive agents who hurl foul language at me and my allies, such as Neil Jenman. I can tell you one thing, for sure. Neil does not “make stuff up”. Nor do I. We don’t have to falsify our findings; the truth is shocking enough. Indeed, it’s so bad as to be hard to believe.

According to my research (which, is still on-going), more than 80 per cent of homes are short-sold by an average of around eight per cent. On an average home price of, say, $600,000, that’s a loss to the average owner of $48,000. Call it $50,000.

We see it constantly – homes sold far below what buyers are willing to pay. The worst cases often occur in auctions where inexperienced sellers are often delighted they got a higher price than they expected, but they don’t realise they did not get the highest price.

When you are selling your home, you must aim for the highest price. Anything below the highest price means that your home has been short-sold.

To give you an idea of just how serious the short-sell factor can be, consider this case which is a common example of how properties are constantly short-sold.

A magnificent property was listed for sale by auction. The owners hoped to get $9 million.

The property sold for $11 million.

Fantastic, thought the owners – two million dollars more than expected.

But the buyers were willing to pay $15 million.

The property was short-sold by four million dollars. I repeat: This is a common occurrence. In most property sales, properties are short-sold because they do not sell for their highest price.

Please note: Neil Jenman wrote a brilliant training course for agents called ‘Real Estate Negotiation’ which includes ’42 RULES’ to help agents get the highest price for their sellers. If you would like a copy of these 42 rules, either in a hardcopy booklet or in pdf form, call Jenman Support on 1800 1800 18 or email support@jenman.com.au.

 

4. A SKILLED NEGOTIATOR

You’d think it would be obvious. If you are a real estate agent, the essence of your job, the main reason sellers hire you is simple: To negotiate the highest price.

But most agents are hopeless at negotiating. Our recent survey of one hundred agents showed that none – not one! – had read a book about negotiation, let alone done a course on the topic.

Therefore, many homes are short-sold – most agents are clueless negotiators.

On the contrary, agents are taught methods that cause homes to be short-sold. For example, consider this line from a training manual of one large real estate network: “When buyers show interest in a home, ask if they would like to make an offer.”

Make an offer?! In other words, pay less. Why not ask if they’d like to buy the home?

To suggest to buyers that they make an offer causes them to make an offer. The agents then go to the sellers saying the buyers made an offer. But the offer is agent induced!

Sellers often accept offers where buyers were willing to pay a lot more.

Recently an agent suggested an owner accept $4.5 million for a home. Neil Jenman told the owner (who was his close friend) not to accept it. He got a stinging text from the agent telling him he was “not much of a friend” for advising the owner to reject the offer.

Two weeks later, the same buyers increased their offer to $4.9 million.

We texted the agent and said the owner would have short-sold by $400,000 if not for Neil. The agent did not reply.

So, how do you know if the agent you’re thinking of hiring is a good negotiator? Simple, just ask them.

Of course, all agents will claim to be great at negotiation. You then make this request: “Please give me some examples of your negotiation skill – specifically how you can get us a better price than other agents.”

Unless you are impressed with how the agents respond to this statement, you have not got the right agent.

Please note: If you would like to hear how a good negotiator can get you a better price, book an appointment with Neil Jenman or one of the skilled team members at Jenman Support. They are brilliant. Just call 1800 1800 18 or email support@jenman.com.au. You will soon realise how to pick agents who can negotiate the highest price for your home.

 

5. NO MONEY UP FRONT

No matter how good their pitch might be, remember this: Do not pay any money to any agent for any reason until your home is sold and you are happy with the price and the service.

Most agents – especially lazy or deceitful ones – have well-oiled scripts on why you should “invest” in a marketing campaign. It’s mostly a complete con job.

Agents expect you to advertise their business at your expense. It’s a well-known real estate deceit: Agents build their “profile” at the expense of the sellers. The word “profile” is a commonly used phrase behind-the-scenes among agents.

Please consider this point: Most agents have got lists of buyers who are looking in your area. They shouldn’t need to advertise your home to find a buyer for it. They should already have a buyer on their books. If not, why should you pay for their incompetence?

Further, if you agree to pay for advertising – before your home is sold – many times your advertising money creates other leads for the agent.

Thanks to your “investment”, the agent gets to meet many new sellers – who enquire about your home but first need to sell their home. The agent lists their home. Sometimes an agent can get three or four listings from the one original listing. Great if sellers are picking up the tab and agents pocket the proceeds – but the sellers lose all their money if their home is not sold.

The agent also meets many buyers who, if they don’t buy your home, often buy another home from the agent.

Asking sellers to pay money to find buyers is nonsensical if you think about it. Why not ask buyers to pay money to find sellers? It’s the same thing, only reversed.

Sadly, few sellers think enough about what’s being done to them, at least in the beginning. Usually, it’s not until after they have sold that they realise – if they ever do – how they have been duped into needlessly spending thousands of dollars.

These days, commissions are big enough to allow agents to cover advertising costs. Or, at the very least, agents should offer sellers the option of “RISK FREE” selling. The best agents are always those who do not place their clients at risk of losing money.

 

6. TRIAL PERIOD

Most agents want you to sign-up for 90 or 120 days. This is far too long for someone who’s unproven. Considering that you have probably only just met the agent, it’s a mighty big ask to expect you to tie yourself up to them for three or four months.

As many sellers so frustratingly experience, if they don’t like the agent, if the agent clearly lies to them, if the agent breaks promises, they are stuck with that agent for the term of the selling agreement.

So, to make sure you are safe – and to give the agent an incentive to treat you well – you should use a ‘Trial Period’.

Only sign-up for a maximum of 30 days.

If you like the agent and you are happy with their service then, at the end of the 30 days, you can sign-up for another 30 days.

 

7. USE JENMAN SUPPORT

In my 35 years in real estate, I’ve never seen better help offered to real estate consumers than Neil Jenman offers.  Especially for property sellers.

If you’d like Neil and his team to help you – at no extra charge to you – I know they’d be delighted to do so.

If they don’t know an agent in your area who they feel is trustworthy and one of the best, they search for an agent; I think they call it a “sweep” of the area. They ‘grill’ agents on your behalf.

If necessary – and I have seen them do it – they contact all the agents in your area – which could be as many as twenty or thirty – until they narrow down the best, those likely to get you the best price at the least expense.

How do they get paid? The agents pay a small percentage of their commission. Of course, they do not get paid until your property is sold. The way I see it: the agents pay Jenman Support to protect you from the agents. It’s the best concept I’ve seen to prevent your home being short-sold.

If Jenman Support is helping you, there are three factors you can be sure of: They will never ask you for any money. They we will never ask you to sign anything. And, probably most important of all: They always focus on your best interests.

I believe these seven points – especially the seventh – will go a long way to making sure your home is not short-sold when you sell.

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FOOTNOTE:

A few words about my upcoming book, The Real Estate Short Sell.

In return for his assistance, I have offered Neil Jenman several copies of my book (we haven’t agreed on how many) to offer with his compliments to subscribers to his website, those home owners who are genuinely thinking of selling between now and the next year or two.

If you’d like a copy, please contact Jenman Support on 1800 1800 18 or email them on support@jenman.com.au. Obviously, there may be a limit on the number of copies they give out, so I suggest you contact them asap if you are interested.

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