THE REAL ESTATE ADVERTISING STITCH-UP
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!
**********************
Footnote: If you are selling and you want an agent who will not slug you for advertising costs in advance please contact Jenman Support on 1800 1800 1800 or support@jenman.com.au
*****************
To call Jenman Support, click here 1800 1800 18
To contact us, please click here.
To comment on this article, please click here.
To follow Neil on Twitter, please click here.
To visit our Facebook page, please click here.
To read more Articles, please click here.
*****************
PLEASE NOTE: Our focus is upon helping consumers. Abuse from agents on our web site 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.
September 8, 2020 @ 11:42 am
Hi Neil
Great article. Keep up the good work
Sometimes you don’t need to advertise.
I don’t think I told you this but apologies if I have!
I wanted to sell a student apartment in January. I asked the body corporate for all the owners emails (they have to provide this in SA) and did a BCC email to them all saying I was intending selling. I got three replies. I negotiated with one. My conveyancer drew up the contract and charged me $220. An agent would have charged me over $6000 on a $320,000 sale!
September 8, 2020 @ 12:31 pm
This is so true Neil, the commission that agents receive when selling your home should easily cover their marketing costs.
I have just sold my house here on the Gold Coast using fsorbo(for sale or rent by owner) which got my home listed on realestate.com for a total cost of $249! I didn’t need to use an agent and sold it myself! After 2 days of being listed on realestate.com I had 2 offers.
The price I achieved was $3000 less than what I was going to list it for with an agent so I have literally saved myself thousands of dollars.
Neil, with your help and dogged determination to expose these real estate agents we need to get the message out there that there is no need to to use a real estate agent at all!
I look forward to hearing from you and I thank you in advance Neil for helping me get the message out there to all home owners across the country that real estate agents are not needed and sellers can do it themselves saving thousands of dollars! I urge you Neil to do your next article on this matter and help with your continuing efforts to make a massive dent in this hopelessly corrupt industry.
Thank you.
October 13, 2020 @ 12:34 pm
Hi Neil,
A friend of mine is in the process of selling her father’s apartment, a deceased estate. It has a number of unique desirable features and I think it will fetch a good price and a quick sale.
Initially, the agent said to paint the unit, which was reasonable as it needed doing.
Then he said to put in new carpet. Now he says that the unit should be “styled”, at a high price.
As the unit seems to be very desirable, I think it should not need “styling”, let alone new carpet or painting. The new owners will just re-do it in their own taste .
What do you think?