How to save thousands of dollars selling your home.
By Neil Jenman
It’s one of real estate’s biggest scams. And it catches thousands of sellers every month.
It’s the real estate advertising stitch-up.
Here’s how it works:
You decide to sell your property and you call an agent. The agent says you’ve got a fine home and it’s likely to fetch a top price. All very plausible.
But then the agent starts to talk about the M word – “marketing”. In effect, the agent is not talking about ‘marketing’, he’s talking about ‘advertising’.
Alarm bells should sound in your head. You are about to be conned into coughing up several thousand dollars, most, if not all of which, will be totally wasted.
The agents’ pitch regarding advertising is polished. It is full of powerful sales ‘closing lines’ all designed to get you to hand over fistfuls of money.
The agent will talk about a marketing ‘campaign’ and how important it is that your property be ‘exposed’ to a wide audience.
The theory will go like this: The more you spend advertising your home, the bigger the price you get for it. There’s one thing wrong with this theory – it’s bunkum.
Consider this: A real estate agent has been in business for years; that agent has dozens of homes for sale; each month hundreds of buyers contact that agency. And yet, when a homeowner talks about selling, the agent wants the sellers to pay thousands of dollars in advertising costs to find buyers.
Agents already have lists of buyers. Agents are in constant contact with buyers who are looking for homes.
If you’ve got a property worth around $2 million, the agent will expect around $40,000 to $50,000 in commission when it sells. That’s plenty.
Do not add to your large commission cost by handing over twenty or thirty thousand dollars in wasted advertising money.
Here’s a three-word message for sellers – Don’t Pay Anything! At least not until your property is sold and you are satisfied.
Think about this: If advertising really does find the buyer for your property, why do you also need the agent? And, worse, why should you also pay the agent tens of thousands of dollars in commission? If advertising finds the buyer, do your own advertising. Drop the agent.
So, sellers, when interviewing agents about the sale of your home, be firm: You are not going to pay anything upfront for advertising money. Nor are you going to be liable for advertising costs if, for some reason, your home does not sell. Warning: Check the fine print in the agreement the agents ask you to sign. Chances are there’s a clause allowing them to place a caveat on your home if you object to paying those needless advertising expenses. Never sign-up with an agent without getting independent legal advice.
Believe it: You do not have to pay for advertising in advance of your sale. The amount of the commission should include advertising.
There are 195 countries in the world. Australia and New Zealand are the only countries where agents scam money from sellers for advertising. In all other countries all over the world, the agents’ commission includes advertising costs.
Why should Australian home sellers get such a bad deal?
Stand up for yourself. Say no when agents ask you to pay for advertising. It’s a scam.
Until your home is sold, and you’re satisfied with the price: DON’T PAY ANYTHING!
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