How one question saves buyers thousands of dollars
by Neil Jenman
READING TIME: 7 mins (apx)
Nothing upsets me more than injustice. My dislike of unfairness goes back to the worst days of my childhood, especially those boarding school years where corporal punishment, bullying and cruelty were rampant. My experiences in those years scarred me for life.
Now, decades later, when I see good people hurt by not-so-good people, I get upset, sometimes enormously so. In real estate, I hate seeing trusting people deceived and manipulated which causes them to lose thousands of dollars. It happens all the time. Most of the thousands of sellers and buyers who sell or buy each month are financially hurt.
In real estate, there are so many tricks and traps. As much as I can, I try to reveal them all. With some, I wrestle with my conscience.
Here’s why: If I reveal one trick, it may help good people but, it will also reveal that trick to bad people. For example, a dastardly trick at open-inspections. If I reveal it now, unethical people will use it to give themselves an unfair advantage. It will hurt sellers financially. So, in short, all I can say is this: Do not allow free-for-all inspections when selling your home. Insist on inspections at appointed times.
Today, I have decided to reveal a trap that costs thousands of sellers thousands of dollars every week. I have written about it in my books, yet it is still happening.
I believe, at the minimum, this trap is costing the average home-seller at least $50,000. But that also means, therefore, that it is saving the average buyer at least $50,000.
So, by revealing it (again) here today, it means buyers can save thousands of dollars but (some) sellers are likely to lose thousands of dollars.
Which brings me to an important point about selling and buying real estate. The best result – the greatest financial return – goes to those who are best informed.
The more information a seller or buyer obtains, the better off they will be financially.
A huge problem in real estate is that consumers are fed so many lies dressed as facts – for example, that home-sellers “must spend money on advertising” (nonsense!) or that “auctions get the best price” (they do not!). These lies do enormous financial damage to home-sellers.
And don’t get me started on buyers, especially in the investment market – that topic deserves an article on its own, if not a book. If you – or anyone you know – is about to buy an investment property, contact me if you would like specific safety suggestions. And no, I will never charge you nor sell you anything. As I always say, I would rather protect you than rescue you.
For your own sake, you should read as much as you can on what I write about real estate – and then, BEFORE you get “in” to the market, contact me. I am happy to be “with you all the way”. And I will likely save you a lot of money – sometimes hundreds of thousands of dollars.
I will make sure, for example, that, when buying, you ask what I am calling “the $50,000 question” – as this is the least you are likely to save. Just four words can save you $50,000 – that’s $12,500 per word.
It is often said that “ignorance is expensive”. This is certainly true in real estate. What you do not know can cost you dearly.
So, let’s get to the question and show you how it can save you thousands of dollars when you are buying your home – (and stop you losing it when you are selling).
Last month, after helping Rick and Penny sell their Melbourne home for the best price, Rick asked us to help him buy a home. The family is moving to Queensland – the sunniest state with the shadiest agents. Rick decided to fly up and check out a few homes. He allowed four days.
On the second day, Rick texted me. He had seen several homes but was keen on one. Indeed, he was in love with one. When he sent me the link, I saw why – it was gorgeous. One street from a beach with stunning ocean views set on a quarter-acre (1,000 sq m) block. At $750,000, it seemed cheap. Within minutes we did research for him on this specific home. Everything looked good. Rick’s concern now was that he did not miss out on it. Clearly, he was willing to pay the price being asked – $750,000.
Now, when buying any home, please remember this: The more you ask owners to lower their price, the more likely you may lose the home. This is the time for being delicate and diplomatic in negotiation. Never antagonise the owners. Angry owners rarely give discounts.
Rick was loath to make an offer. But I suggested he ask the agent a four-word question: “What will they take?”
Many agents use the question: “How much will buy it?”
So, we told Rick to use five words and ask – in agent-speak – the question: “How much will buy it?”
To Rick’s astonishment, the agent replied, “Seven hundred should buy it.”
And yes, it did.
The agent was right. Within hours, the agent told Rick his offer had been accepted. Rick was delighted. He could not believe it.
Now, of course, an experienced negotiator may say that Rick could have bought the home even cheaper. Perhaps. Or, even that, had the agent been a good negotiator, Rick may have paid even more than the asking price.
But in real estate, good negotiators are as rare as honest agents.
So, in this case, the buyer saved a massive $50,000 and the sellers – as happens with most sellers – undersold their home by $50,000. Unknowingly.
Yes, as I often say, it’s like they leave a suitcase of cash in the living room. It happens to thousands of home-sellers ever week. Most sellers never know they undersold their homes.
If you are a seller and you are reading this, how can you not be under-sold? As we repeatedly say: Never tell anyone the lowest you will accept otherwise that will often be the highest you ever get.
As a seller, your lowest price is no one’s business but yours. Your objective is not to reveal your lowest price, it is to discover the highest price buyers are willing to pay.
In this case, if the owners had said to the agent: “Never mind asking us what’s our lowest price, ask these buyers for their highest price,” the owners may have got $750,000. After all, Rick was ready to pay it. The biggest problem, of course, was the agent, like many agents, knew little or nothing about how to negotiate.
Sure, it’s hard to find an agent who is a good negotiator. At Jenman Support, we know agents all over the country. We know some good negotiators. But even if we don’t, then, with our support, when the agent comes to you with an offer from a buyer, you just say, “Please wait while I speak with someone who’s supporting me.”
And then you call us.
We will tell you what to say and when to say it. We will look after you – as a seller and then, if you wish, as a buyer – in more ways than you can likely believe. It’s what we do.
So, please, before you call an agent, make sure you call Jenman Support.
FOOTNOTE: Given that there are almost 10,000 homes sold each week, you may wonder how we can possibly help and support all home-sellers. Please do not let that prevent you from asking for our help. Let us figure out how we can keep our promises to you. We have done okay so far – and we plan to do so well into the future. With two of my adult children now working at Jenman Support, ‘Jenman’ will be around for many years. Yes, that’s bad news for most agents, but good news for you. If you contact us.
Thank you, too, for your support. We appreciate you very much. We love to help you.
PLEASE NOTE: Our focus is on helping consumers. Abuse from agents on our website 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.