\n
![](\"https:\/\/www.apimagazine.com.au\/media\/1001574\/shutterstock_167842025.jpg\")
<\/p>\n [ad_1]
\n<\/p>\n
Real estate agents came under renewed fire in 2021 as the perennial issue of underquoting reared its head again. Many buyers felt they were being misled by agents capitalising on frenzied demand and fear of missing out (FOMO), as prices surged across the country.<\/p>\n
Real estate agents came under renewed fire in 2021 as the perennial issue of underquoting reared its head again. Many buyers felt they were being misled by agents capitalising on frenzied demand and fear of missing out (FOMO), as prices surged across the country.<\/p>\n
However, today I want to look at agents from a vendor’s perspective.\u00a0<\/p>\n
Estate-agent bashing is an easy and populist sport. Although it pains me to jump in as well, to follow are a few ways where some estate agents let their vendors down.\u00a0<\/p>\n
Cynical expectation management. <\/strong><\/p>\n Generally, estate agents compete for listings. In a perfect world the spoils would go to the agent who demonstrated the greatest competency, local knowledge and understanding of the prospect.\u00a0 While agents often can underestimate prices to potential buyers, the opposite is often true for prospective vendors. Unfortunately, too often the winner is the one who promises the best sales price and\/or the lowest fees. I say unfortunate for two reasons. One, there really is no correlation between an agent\u2019s prediction and the final result. In fact the high price estimate is often unrealistic and may be a sign the agent is overreaching for the prospect\u2019s business \u2013 a questionable behaviour at best.\u00a0 Second, the fees saved with a cheap estate agent may well be a false economy compared to the money that can be lost in a bungled campaign.<\/p>\n For agents who win business based on over-promising, invariably the next move is to massage down the newly-won client\u2019s expectations; to introduce \u2018new\u2019 information that entails a revision downwards of the likely outcome.\u00a0 This process is repeated \u2013 more \u2018new\u2019 information, further downward revision \u2013 until the final prediction is more in line with what it should have been from the start. Of course the \u2018new\u2019 information is neither new nor material\u2013 it is just some spurious though vaguely plausible concoction.<\/p>\n Not going the final mile.<\/strong><\/p>\n By-and-large the commission structure underpinning agents\u2019 fees works well.\u00a0 The greater the sale price they secure, the higher their fee. Everyone \u2013 client and agent \u2013 wants to maximise the price. But there are some agents who maximise their income by pumping turnover.\u00a0 To this end, they encourage vendors to accept modest offers from buyers.\u00a0 For example they may recommend an offer $50,000 below the true market value for a property because it was easy to obtain.\u00a0 Although they forgo the commission on that $50,000 (which might equate to around $1,500), they\u2019ve calculated it\u2019s not worth the extra effort and time to achieve it. It\u2019s crass unprofessionalism \u2013 achieving this last bit for their client is exactly what an agent is there to do!<\/p>\n Disregard towards buyers. <\/strong><\/p>\n One should never make assumptions about which prospective buyer is genuine and which is a \u2018tyre kicker.\u2019\u00a0 Often it is the surprise package that buys the property. Just as importantly, they might be the under-bidder who pushes the final sale price beyond the reserve or even into \u2018cream-on-top\u2019 territory. Nevertheless, some agents are recklessly complacent about buyers, be it in terms of returning calls, clarifying information or simply in their demeanour. A major no-no for me is the inability to provide the regulated vendor\u2019s statement material in a timely manner (although this may be the fault of the conveyancer preparing it).<\/p>\n Poor judgement regarding timing and method of sale. <\/strong><\/p>\n An agent must be flexible and tactically astute. Listing a property for auction or as a private sale just because that is what one always does isn\u2019t good enough.\u00a0 Careful consideration needs to be given to how similar properties have performed recently, the comparative strength of local supply and demand and what else is coming on the market now. Only then should the decision be made about the method of sale and suitable campaign time frame. I recall an especially woeful example of what not to do:\u00a0 two agencies listing near-identical properties within the same apartment block on the same Saturday morning. Both auctions suffered: buyers didn\u2019t go hard on the first property (knowing there was a second coming along in an hour) which effectively set a low benchmark price. Buyers then refused to spend much more than the low-ball benchmark on the second.<\/p>\n Bluffing it. <\/strong><\/p>\n Most agents stick to the areas they know well. But occasionally one sees a sale board from an out-of-area sales agent. The outcome is often poor for the vendor.\u00a0 First the agent simply isn\u2019t across the characteristics and idiosyncrasies of that micro market. And second, they don\u2019t have the deep database of local buyers that they can tap into during the sales campaign (Every now and then, the out-of-towner agent gets lucky and there is a perverse result.\u00a0 Buyers are drawn to the listing thinking they\u2019ll might snatch a bargain, which means they don\u2019t. But that\u2019s the exception). These agents should know they aren\u2019t up to the task, but can\u2019t let a commission pass.<\/p>\n With record auction levels across the nation in the final weeks of 2021, strong competition among vendors for buyers is likely to remain a defining feature of the market in 2022.<\/em><\/p>\n Choosing the right agent to sell your property will be a crucial component in achieving an optimal price, ensuring you capitalise on the surging market values we\u2019ve seen over the last 18 to 24 months.<\/em><\/p>\n<\/p><\/div>\n