WHY REAL ESTATE AGENTS
SHOULD REJECT VPA
And win more listings.
by Neil Jenman
Reading time: 5 mins
Agents know it – VPA is one of the worst scams foisted upon home sellers.
If you’re a real estate agent with any sense of decency – not to mention respect for your clients – you will reject (or abandon) the nefarious practice of VPA.
In doing so, you will achieve more of what you expect VPA to do for you. You’ll win more listings.
VPA is an industry term. It means Vendor Pays Advertising.
What’s most amazing about VPA is how so many home sellers fall for it.
In doing so, they often incur three huge disadvantages:
First, they accept risks that should be borne by the agents.
Second, they pay thousands of dollars needlessly.
Third, they sell their home well below its value.
I KNOW WHAT YOU DO.
Real estate agents, please understand this: I know what you do. I’ve spent my life studying the real estate industry. I own hundreds of real estate books. I’ve read many several times.
All agents have had the importance of self-promotion drummed into them. It’s called ‘profile’.
At a recent conference where many dodgy agents came to learn new tricks, one of the topics was: Don’t underestimate the power of profile.
Well agents, here’s another statement that will do more for you than profile building: Don’t underestimate the power of looking after home sellers.
As soon as they meet sellers, most agents focus on getting the sellers to pay for advertising costs.
Agents know that, many times, they already have a suitable buyer for a home. They also know that persuading sellers to fork up for advertising costs creates more leads for the agent.
Look at many real estate ads and you’ll see the agent saying, ‘View my Profile’. You’ll also see a question like this: ‘Thinking of selling? Click here for a free valuation.’
VPA is the most common rip-off into today’s real estate industry.
THE VPA SCAM IN ACTION.
VPA works like this:
An agent lists a home and takes advertising money from Seller A in Street One. Lots of buyers (mostly tire-kickers) inspect the home.
The same agent then lists another home belonging to Seller B in Street Two. And the same people who inspected House Number One go to inspect House Number Two. Happens all the time.
So why do you take advertising money from sellers when you know full well that many – or most – of the buyers you’ll attract will be known to you?
You do it because that’s what you’ve been taught to do, that’s why.
You also do it because you are focused on increasing your profile, that’s why.
It’s highly unethical to use the home sellers’ money to promote yourself and your agency.
All business involves risk. But real estate agents are the only businesspeople (if you want to call them such) that have devised a system to transfer risks to their clients.
Agents, these four words will win your more listings: NO CHARGES UNTIL SOLD.
If you doubt me, do what thousands of sellers do: Read the book Real Estate Mistakes or another book called Don’t Sign Anything!.
REJECT UNETHICAL CONDUCT
Most agents don’t know the meaning of ethics. Look it up and then ask yourself an honest question: Is VPA ethical? No way.
It’s unethical to transfer risk of loss to the sellers.
It’s unethical to tell sellers that the more marketing money they spend, the more money they’ll get for their homes. The opposite is more likely true.
It’s unethical to quote sellers a high price to persuade them to list their homes and pay thousands of dollars in marketing costs – and then pressure the sellers to accept a lower price.
It’s unethical to put sellers in the position of not selling their homes and yet still having to fork out thousands of dollars in advertising expenses.
It’s unethical to take advantage of the lack of selling experience of most sellers.
It’s unethical to tell sellers they can “pay later” thus creating the impression that nothing is payable until sold (which is how it should be) when the agents know that if the home doesn’t sell the owners will lose thousands of dollars.
It’s unethical to profit from the losses of your clients.
Agents, as soon as you accept the truth of what you are doing, you can then do what you should be doing: Always acting in the best interests of your sellers.
When you adopt this approach, you’ll likely treble or quadruple your listings.
REJECT VPA AND ACCEPT MORE LISTINGS.
If VPA really was good for the agents, why are so many agents struggling? They believe that spending thousands of dollars on advertising is mandatory.
Thousands of agents con themselves as well as their clients. There is never a need to use unethical methods. How do you think agents sell real estate in every other country in the world without using the VPA scam?
They take the risk themselves. They make sure that all costs – commission, or marketing or whatever – are included once the property is sold. If a property isn’t sold, there is no charge.
The battle to win listings is the major focus of agents.
Do the math agents.
Take the number of agents in Australia (apx 43,000) and divide that into the number of homes sold (apx 520,000 annually). On average, there is one sale per month per sales agent.
What happens, of course, is that about ten per cent of agents list ten or more homes a month – whereas the other 90 per cent fight over the scraps. The bottom 20 per cent of agents often quit the industry – many in disgust at what they have been told to do.
Agents, don’t focus on those “top agents” who are massively ripping-off sellers for thousands of dollars each.
Focus on the sellers. Do what’s best for them.
Put your sellers first and yourself second and you’ll soon increase your listings.
First you need to be the best. Then you will be the first.
Sellers will flock to you when you tell the truth about the real estate world.
Put all reasons for VPA under scrutiny and you’ll see that all the slick lines lack verisimilitude.
And don’t con yourselves, agents. Here’s a whine common to uneducated agents: “But if the home doesn’t sell, I’ll have to pay. Premium ads cost thousands of dollars.”
You do not need to spend thousands of dollars on premium ads – that’s just an extra scam loaded on the base scam.
Sure, you may get less lookers with a standard ad. But you won’t lose the best buyers. Genuine buyers are resourceful. If a home is well-presented and priced fairly, it will sell easily. Without the need for anyone getting sucked into paying thousands of dollars for useless premium ads.
So, get more listings. By giving more service than the other agents.
Reject VPA, agents. It’ll be good for you and good for your sellers.
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FOOTNOTE: To agents who are interested in kicking the unethical VPA habit, we will gladly introduce you to agents all over Australia who are winning dozens of extra listings. Speak to them and see how ethics can be profitable.
Repeat: First you must be best and then you will be first.
And, of course, to sellers who are interested in not getting ripped-off with the VPA scam, we will gladly introduce you to the same agents. If we don’t know of an ethical agent in your area, we’ll try and find one for you. At no cost to you.
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Pam Reed
July 16, 2024 @ 11:10 am
I appreciate your articles.
The problem for me is that I’m looking to buy a home in the next few months. How can I find an ethical agent to buy from?
What should buyers be looking for when making choices about which agents to trust?
Toni McGrane
July 16, 2024 @ 11:27 am
Very interesting article. I have never spoken with an agent who does not apply VPA.
We are currently looking to downsize so if you can point me to an agent who does not apply VPA in the Mt Eliza Victoria area I would be most grateful
Heather Darr
July 21, 2024 @ 12:02 pm
So true 40 years ago when I was buying and selling we never paid for advertising and I certainly won’t now … I was sceptical of agents that long ago but they were so much better then the agents of today. Keep up the good work when I’m ready to sell … hopefully sooner than later…. I will contact u for a reputable agent. Heather
Vaughan Behncke
August 7, 2024 @ 2:16 pm
Excellent article on VPA
thank you