HOW TO GET A GOOD PRICE IN A BAD MARKET
by Neil Jenman
Reading time: 7 mins apx.
If you want to sell your home in today’s market, you are about to discover a secret that may give you hundreds of thousands of dollars extra.
There’s a new boom in the real estate industry now. A boom in negativity. It’s affecting most agents. This means, of course, that most home-sellers are also affected – negatively.
This boom in negativity is having a catastrophic impact on the price of homes.
Here’s an example of what’s now happening in thousands of sales. Recently, a home was auctioned in Mt Waverley, a lovely Melbourne suburb. According to at least one agent – and many observers – the home was worth at least $1.5 million.
It sold for $1.1 million.
Now, of course, auction is always the worst way to sell a home, especially in a bad market.
THE AIM OF MOST AGENTS
Most agents measure success by how many homes they sell. Not by how much was paid for homes. Not by whether they got a good price. And certainly not by the happiness of sellers.
Most agents want maximum commission for minimum work. Anyone who disagrees with this statement either doesn’t understand real estate or is hiding the truth.
You only need to spend seconds with agents today to hear them moan about “how bad the market is” or about “how there are few inspections” at open-homes. This is especially true for sellers whose homes are for sale and unsold. They are bombarded with negativity.
HOW MOST AGENTS MAKE SALES
Most agents have three ways to create sales in a bad market. Drop the price, drop the price, and drop the price again. Keep dropping the price until – as many sellers discover – their homes are almost “given away”, that’s how it feels.
In most cases, it’s not the price that should be dropped, it’s the agents.
The way to spot negative agents is to listen before you hire them. If they seem negative or spend time talking about “the market” in general, be careful.
Of course, many agents are positive before sellers sign-up but negative later. Therefore, unless you completely trust an agent, you should only sign-up for 30 days at a time. One seller – when told by an agent: “We have a buyer who wants your home,” – only signed-up for 24 hours. That’s a seller in control, as all sellers should be.
Good agents don’t let a negative market have a negative impact on them or their sellers. Good agents realise that their job is not just to sell a home, it’s to sell homes at a good price, to make sellers happy. In any market conditions.
If the price is low enough, any fool can sell a home – as proved during the boom, when fools masquerading as agents sold homes and hailed themselves successful. They were not successful – at least not when “success” is measured by two factors, the price, and the happiness of sellers.
If you’re selling your home in today’s so-called bad market, the only chance you have of getting a good price is to hire a good agent, one who’s positive.
There is a secret to finding such agents and getting a good price for your home.
THE STRANGE SECRET
Back in 1956, a young man from Illinois in the United States had become fascinated by how some people succeeded no matter how negative the times. His name was Earl Nightingale. He came of age during the Great Depression, when millions of people all over the world (including Australia) lost their jobs, their savings, and their homes.
Earl noticed that, despite the massive negativity that accompanied the Depression, some people, albeit a small minority, flourished.
The few who managed to succeed were doing what Earl Nightingale labelled a “secret.”
So, what was this secret?
A secret so strange that Nightingale dubbed it ‘The Strangest Secret.’ He released a record in 1956 that became the biggest selling talk-record of all time.
The strangest secret was this: “We become what we think about.”
Six words that have a massive impact on our lives.
If you think the worst, you get the worst. Conversely, if you think the best, you often get the best. As Henry Ford said: “Whether you think you can, or you think you can’t – you’re right.”
THE BAD INFLUENCE OF NEGATIVITY
Sure, negativity is in the property market now. Sure, inspections are down. Sure, there is a prediction of a massive crash (when hasn’t there been?). Negativity is everywhere. Many agents use negativity as an excuse to get sellers to “drop the price, drop the price, drop the price”.
As the foul-mouthed trainer to thousands of agents tells them: “Go ugly early.” Real estate is an ugly business.
But there’s one thing certain in today’s real estate market: If you are a seller who’s thinking negatively, and then you hire an agent who uses negativity to push you down in price, you are doomed. You will have no hope against the bad influence of negativity. No hope at all.
A bad attitude – from both you and the agent – will get you a bad price. Guaranteed.
GOOD AGENTS GET THE BEST PRICES
Good agents always get the best prices, no matter what the market. These agents know the importance of being positive. They know that when buyers find a home they love they will likely pay the best price, even more. Such buyers know that happiness comes before money.
These are the buyers that good agents seek. These agents sell on love. They sell on desire. They sell on happiness. They sell on potential. They sell on positivity.
Scott is an agent in Melbourne. He’s young, new, and keen. Recently he met a seller who owned a home that most people would call a “dream home”.
But, to most agents, there was one problem with this dream home. The owner wanted far too much, especially in this “bad market”.
Like many good agents, Scott has stayed positive. He said: “The market might have turned bad, but I haven’t.” He listed this home. Other agents told him what lazy sore loser agents often say when they are rejected by sellers in favour of another [better] agent: “You’ll never sell it.”
Last week Scott sold this dream home. For half a million dollars above what other agents believed it was worth. Yes, when buyers love a home, they will often pay a high price. Scott found such a buyer.
Kathy part-owns a respected and long-established real estate agency in Melbourne, one that never charges sellers until their homes are sold and they are happy. Indeed, Kathy once taught Scott. Recently, another of her pupils, Tony, listed a lovely apartment in Glen Iris. Kathy was excited that he obtained the rights to sell such a beautiful property. The owners interviewed several other agents, all of whom focused on the falling market, especially the “over-supply” of apartments in Melbourne.
But as Kathy said: “What other agents neglected to see was that this was a three-bedroom apartment (not common). We are excited to have it.” One thing for sure: The owners chose the best agency. Repeat: You can’t get a positive result if you choose a negative agent.
There are countless examples of how positive agents are still getting great results.
Take the case of Jenayah in Tasmania. She’s one of real estate’s most positive agents. Jenayah met a home-seller who had found a home to buy and needed to sell her own home fast. The agent from whom she was buying her second home was eager to list her old home. This agent (the one with the second home for sale) quoted the would-be buyers (now also sellers) a “maximum $360,000” for their current home. The agent said the market was dropping in Tasmania and that “the sellers of the home you want will not accept a conditional contract.” In other words, they won’t wait for you to sell. But if you put your home for sale now, at a “realistic” price, we should get it sold in time for you to buy the home you want.
The other agent was using self-serving nonsense. Instead of $360,000 (“maximum”), Jenayah listed the home at $399,000.
Sure enough, within a week Jenayah had a buyer who loved the home. Jenayah negotiated a final price of $420,000. Another buyer loving another home who put happiness ahead of money – and negativity.
The owner – who’d also been told by the other agent not to list with Jenayah as her commission rate was “too high” couldn’t help saying to the other agent, “If I had taken your advice, I would have sold for $60,000 less.”
Sure, Jenayah’s commission was higher but so was the price. This proves the point that agents who get higher prices often genuinely deserve a higher fee.
It was positivity – as well as her negotiation skills – that enabled Jenayah to help these sellers get an extra $60,000 and still buy the home they wanted.
As Jenayah quipped yesterday: “It’s amazing how quickly bad agents blame the market when they are self-proclaimed superstars in a boom.”
A good and honest attitude is important. Indeed, as the former AFL player and once successful agent who was renowned for his integrity, Gerald Crough, used to say: “Attitude is the most important word in life.”
The secret to selling your home in a negative market is to have a positive attitude.
And to hire a positive agent.
This will give you the best chance of getting what all sellers want: A positive result.
FOOTNOTE: Thank you for reading my article and subscribing to the Jenman website. We spend hundreds of hours searching for the best (read “most positive”) agents in Australia. If you want to be introduced to a positive agent to sell your home, let us know. We never ask you to pay any money and we never ask you to sign anything. We always fight to protect your best interests.