Using Your Real Estate Agent: Don’t Get Bullied!

Using Your Real Estate Agent: Don’t Get Bullied!
16-Oct-2017 Mark Honeybone

Choosing experienced real estate agent.

Using a knowledgeable Real Estate Agent for selling your property is very important and can make you a lot of money. On the other hand, if you don’t have a good agent, you can lose a lot of money.

I am frustrated to have heard stories about sellers who have gone to Real Estate companies only to be told blunt lies.

Last week I was told about a real estate company who was signing a potential client to a short auction program of 2 weeks and saying that they had to have the property listing with them for 3 months. Rubbish! Sounds like this real estate company has no confidence in their sale systems or auction process. An auction should be well advertised and prepared for and if it doesn't sell on the day, the real estate company should have conditional buyers ready to buy. Why do they need another 75 days (2 and a half months) to sell the vendors’ property? Bullies!

When you’re selling your property, the main goal should be having as many eligible buyers knowing about your property being on the market. This is your Real Estate agent’s job and if they can’t do it (or have limitations), you should find someone else. This comes back to how experienced they are, but more so where they advertise, which determines who finds out about your property. This is where private sellers sometimes miss out.


Why does a property not sell?

I hate to be harsh, but the main three reasons property doesn’t sell are:

  1. There is something wrong with the property, i.e. leaky, bad area, etc.
  2. It is overpriced. A Real Estate agent’s job is to open the opportunity for interest to a wider range of prospective buyers in different price ranges. This is especially critical in today’s market! You don’t want to miss any buyers.
  3. Poorly advertised and little exposure. This shouldn’t be the case when using an agency and you should make more money (after paying commission) rather than when selling your property privately due to having limited advertising resources available.

Different types of selling techniques:

Private Sale

This is the cheapest way; however, you do not have full advertising resources available, which are used by real estate agents like cheaper rates on Trade Me and other selling medias which means that your property won’t be exposed to as many potential buyers.

Auction

This is still a good way to sell if you have more than one serious buyer. A buyer must be ready to go unconditional and ready to pay a deposit. The limitations are that some buyers drop off and unable to participate due to not being able to get finance on time before the auction or they may have another property to sell first. So some may be ready to put a conditional offer after the auction but others just wont bother. 

Price

This sales technique indicates a price range to buyers, but the property MUST be priced correctly. The downside is that if the property is overpriced, you lose potential buyers who could’ve been interested otherwise. If it is priced incorrectly, you may not get the full potential price. ‘’Offers over’’ is often a better way to go.

Price By Negotiation

This might annoy some buyers, however it doesn’t limit what someone might pay. Everyone is still in the running until they get ‘‘No, your offer is not enough’’. What I like to do is use this technique for a week or two to gauge a property’s true value. Then I use ‘’Offers over’’ followed by ‘’Deadline Sale’’, which I found produces a multi offer situation - a bit like an auction, but everyone (conditional or not) has a fair chance of buying. More offers = best price.

Tender

This is when prospective buyers submit confidential written offers to the agent for the seller’s consideration by a certain date. There is no reserve price (the lowest price the seller is willing to accept), but there may be a price guideline. Buyers can offer less than that though. The Vendor can choose to negotiate with any of the applicants or to decline all.

Deadline Sale

It is slightly similar to Tender where all offers are handed in to the agent by a certain date. This may be a rather short period of time - maybe 1 or 2 weeks. The advantage of this sales technique over an Auction is that buyers have an option of making it conditional. The Vendor can choose to negotiate with any offer they choose to.

 

When selling your property we advertise to the same media as larger companies but have our ‘unfair advantage’ advertising to thousands of Investors that don’t even know their place is on the market until we tell them. By default, we should get the best price.

We also have the most respected Auctioneer in NZ to call the Auction if anyone requires an Auction as their preferred method of selling when selling through Property Ventures.