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| THE MOST DANGEROUS
THING YOU CAN SIGN
is a "standard" selling agreement. Thousands
of sellers make this mistake - they signup with an agent
without realising what they are doing. Once you sign,
you are at the mercy of the agent. You have lost control.
That's why many agents describe sellers as being "controlled"
- it means the agent has control. Agents
may say their agreement is "standard". But
it is designed to the agent's standard, not to your
standards. It totally protects agents. It barely protects
you.
Be careful. An agent's
selling agreement is a legal contract. Treat it seriously.
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DON'T
SIGN ANY CONTRACT
unless you are GUARANTEED
that your basic rights are protected. Seek independent
legal advice or use the Consumer
Protection Guarantee for Home sellers which has
been designed in consultation with legal experts and
consumer advocates.
This Guarantee
is available to all Home sellers at no charge and
with no obligation. Despite what some agents may say,
you can use it with any agent in any area.
This Guarantee has huge support from consumers, lawyers
and consumer advocates. It has been described as a
"lie detector" test for agents. The Guarantee
prevents the agent from hurting you. If an agent does
not want to sign it, do not hire the agent, no matter
what you are told.
To receive a copy of the
Real Estate Consumer Protection Guarantee call 1800
1800 18 or view it online |
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FEELING
GOOD IS NOT A GOOD ENOUGH REASON
to trust the agent. You need proof that the agent
deserves your trust. And that's easy - just make sure
that anything you are told verbally is GUARANTEED
in writing.
When the agent says something
that sounds good, just say, that sounds good, would
you give me that in writing?" This will really
test whether or not the agent deserves to be trusted.
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ONE
OF THE MOST COMMON MISTAKES made by sellers
is believing the price the agent quotes for the sale
of their home.
Once you sign-up with the agent,
if the selling price is less than the price you were
quoted, too bad. There is nothing in the "standard"
real estate agreements that compels agents to honour
their quotes.
The 'Quote Trap' catches thousands
of sellers who are told one price before they sign-up
and another price after they have signed-up.
As absurd as it seems,
if a home sells for any price, the agent still gets
paid
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INSIST ON A
WRITTEN QUOTE GUARANTEE,
just as you would with any business. You should only
pay the agent if you get the price you were quoted -
or more. Don't accept any excuses about "the market".
Granted, no one can know exactly what any home will
sell for; but the agent can give you a price range ~
from a low point to a high point - and if your home
sells below the lowest point of the price range, do
not pay the agent. An
agent who is telling the truth about the price of
your home will have no qualms about giving you a written
commitment that the words you hear are the truth.
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CHOOSING
AN AGENT BASED SOLELY ON A HIGH QUOTED PRICE
and a low commission rate can be a dreadful mistake.
Agents who offer low commissions can be poor negotiators.
You are hiring an agent to negotiate the best market
price for your home. Take the time to 'check out'
the agent. A little research can mean BIG savings
for you.
Once you have signed up with
an agent you may be horrified at the things the agent
says and does when handling the sale of your home.
Many agents openly encourage buyers to offer lower
prices. Many agents reveal confidential information
about sellers, such as "These people are in trouble."
If you have a pressing personal reason for selling
- illness, divorce, financial commitments, the agent
may tell buyers about your reason. This really weakens
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TREAT THE HIRING
OF AN AGENT LIKE A JOB APPLICATION.
Ignore written references because you may only be shown
the good ones. You must
discover if the agent is honest and competent.
There are two ways to do this. First, ask the agent
for details of all their current Home sellers. Call
some of these people and see if they recommend the
agent. And second, you should 'Mystery Shop' the agent
to make sure the agent is not going to say one thing
to you and another thing to buyers. Call the agent's
office and make enquiries about one or more of the
homes they have for sale. Ask questions such as "Why
is the home being sold?" and "What
is the lowest price the owners will take for this
home?"
'Mystery shopping' will tell
you if this is the agent you want to handle the sale
of your home.
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THOUSANDS
OF SELLERS GET CAUGHT WITH THE WRONG AGENTS.
lf you sign a 'standard' real estate agreement, and,
later, you are not happy with the agent, it is very
hard to get out. Once you sign-up you are 'locked-up'
for the time period you signed. This is one of the
most frustrating mistakes made by Home sellers.
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DON'T
SIGN ANYTHING WHICH LOCKS YOU UP
for a long time. Consumer advocates recommend short
time periods. In Queensland, 60 days is the maximum
time allowed by law. But even that may be too long because
the longer the agent has your home, the more chance
that you will be pressured to lower your price. The
maximum time should be 7 weeks (49 days). Many sellers
only give an agent 30 days to start with. If you are
happy, you can extend the time later. Be careful. Keep
control. Insist on a short selling agreement.
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CONDITIONING
IS ONE OF THE CRUELEST REAL ESTATES TRICKS.
It has one purpose: to convince sellers to lower their
prices so that their homes can be easily sold, thus
ensuring that the agents get paid.
There are two classic symptoms
of conditioning. The first is when the agent praises
your home before you sign and then criticises your
home after you sign. The second is when the price
the agent quotes you becomes much less after you sign.
Conditioning works in two stages.
The first stage is the 'Activity' Stage. This is when
the agent creates lots of activity - which causes
your home to be sold for a lower price. The second
stage of Conditioning is the "Crunch". This
is when pressure is applied to you to reduce your
price.
Conditioning is a common
real estate trick. It is taught in several real estate
courses. Most sellers are no match for trained agents.
They do not realise what is happening until it is
too late.
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IF YOU ARE BEING PRESSURED TO REDUCE YOUR PRICE,
or the agent is using methods which can cause you to
get a lower price, you should have the right to dismiss
the agent. It is your home, you probably worked hard
to buy it. You should protect its value. You must insist
on the right to dismiss an agent if you are subjected
to 'conditioning'.
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THOUSANDS
OF SELLERS DO NOT REALISE HOW AGENTS USE ADVERTISING
TO PROMOTE THEMSELVES. And very few sellers
realise how advertising damages the value of their
homes. Typical real estate advertising often gets
lower prices. It is a "conditioning weapon"
to convince you to lower your price.
The more a home is advertised
and the longer it remains unsold, the easier it is
to persuade you to lower your price. When buyers see
a home advertised week after week, they wonder what
is wrong with it. It can easily become known as a
lemon. And lemons get lower prices.
Agents say that advertising
attracts buyers. But almost all buyers never buy the
homes they first called about and even those who do,
would still have bought the homes. Buyers do not buy
because of advertising. They buy because they like
the homes.
If advertising really was the
cause of selling your home, why would you need an
agent? You could put ads in the paper yourself and
save thousands in commission.
Agents may say your home needs
lots of "exposure". But exposure is like
sunburn. The more you expose your home with typical
real estate advertising, the more you burn your price.
Many agents who have stopped
typical real estate advertising have saved sellers
thousands of dollars and achieved better prices. |
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YOU
ARE THE SELLER OF A HOME, NOT THE BUYER OF ADVERTISING.
If the agent can't show you how to sell your home without
damaging its value through typical advertising, choose
another agent. The best agents protect the value of
your home. They know how to attract buyers who pay the
best prices.
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AGENTS
WHO TREAT BUYERS BADLY WILL ALSO TREAT SELLERS BADLY.
If you have ever tried to buy a home you will know
exactly what this means.
Buyers like to deal with agents
who will listen to them. But thousands of buyers complain
at the lack of courtesy from agents - especially when
it comes to returning phone calls or keeping in touch.
Many agents advertise constantly rather than keeping
in touch with buyers who enquire to their offices.
This is inefficient, incompetent and lazy.
Agents often tell sellers that
they have to "find a buyer". But this makes
almost no sense. If the agent is efficient the agent
should already know who is looking to buy because
all buyers come in to an area before they buy. It's
obvious, but most of us don't think about it like
that.
If the agent does not treat
buyers well, it means the agent is losing the people
you need. Stay away from such agents. |
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Just as buyers
go to agents and say, "What homes do you have?",
you, as a seller, should say to an agent, "What
buyers do you have?" The
best agents keep in contact with buyers and they keep
accurate records. They know who is buying, what they
are looking for and how much they can pay. They treat
buyers with respect and courtesy. This means that
the best and most efficient agents have immediate
access to the best buyers. Don't judge agents by their
advertisements, judge them on how they treat buyers.
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THE MAIN REASON HOME
SELLERS LOSE MONEY IS BECAUSE SO MANY AGENTS ARE POOR
NEGOTIATORS.
There is a big difference
between what a buyer pays for your home and what that
buyer would have paid. Most agents do not know how
to obtain the best market price. Just ask anyone who
has bought a home what was the price they paid and
what was the price they would have paid. Thousands
of buyers are able to buy homes below their maximum
price because so many agents are such poor negotiators.
It is astounding.
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YOU
DON'T NEED A SLICK SALESPERSON, YOU NEED A GOOD NEGOTIATOR.
A good negotiator can
easily mean an extra ten percent on your selling price.
To discover if an agent is a skilled negotiator, ask
the agent to teach you something about negotiation.
If you are not impressed with what you hear, if you
do not learn something worthwhile, do not hire the
agent.
Insist on an agent who
is a skilled negotiator.
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AUCTIONS
ARE THE REAL ESTATE INDUSTRY'S GREATEST FRAUD.
Thousands of consumers are being cheated.
The greatest myth with auctions
is that they are "the best way to sell".
This is not true. Auctions are one of the worst ways
to sell your home, no matter what area you are in
or no matter what the market conditions are like.
AUCTIONS GET LOWER PRICES.
Agents are the big winners with
auctions. Consumers are the big losers, because they
are so easily caught by the deceit and the tricks.
One of the greatest tricks is the "reserve"
price. Agents will say that homes often sell above
reserve. But the reserve is your lowest price. It
is the minimum
you will accept, under pressure.
Auction involves extreme pressure
to sellers - "crunching" them to accept
whatever price is offered at the auction. Agents are
taught to use auctions to "condition sellers".
The Real Estate Institute of Australia published a
book describing auctions as "the fastest
and best conditioning method".
Very few people, other
than agents, understand the scale of auction fraud.
As one lawyer commented, "The auction system
is just one gigantic scam and everyone in the industry,
other than consumers, seems to be in on it."
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THE
BEST ADVICE IS DON'T AUCTION.
However, if you can't resist the sales spiel, at least
insist that you pay nothing
unless your home is sold at the price you want.
And do not fall for the "dummy bidding" trick.
Agents may say that dummy bidding helps you to get the
price up. They also say it is only done below the reserve
price. But if agents started the bidding
at the reserve price, there would be no
need for dummy bidding. The reason bidding starts below
your reserve price is that many agents intend to "crunch"
you under extreme pressure to lower
your reserve price. If
auction agents were compelled by law to offer guarantees
to consumers, the typical auction system would cease
to exist. Don't let auctions into your life.
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YOU MUST NEVER ALLOW
AN AGENT TO USE A FALSE LOW PRICE TO ATTRACT BUYERS
TO YOUR HOME.
This highly deceptive form of selling may be sold
to you as a "new way of selling" By Negotiation,
Offers Above, Price Guide, Set Sale.
The agent may say that offering
a lower price "attracts more buyers". But
it attracts buyers who only want to pay a lower price.
The lowest price they see is the highest price they
will want to pay.
Bait Pricing also does severe
damage to the value of your home because it creates
the impression that your home is worth less. Even
buyers who could afford to pay more for your home
will still want to pay the lowest price mentioned.
By using bait prices, agents
commit a dreadful marketing blunder. It is a basic
principle of marketing that you must market your product
to buyers who can afford it. If not, you can easily
be forced to sell under pressure at a lower price. |
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| IF AGENTS CHEAT
BUYERS, they will cheat sellers too. You should not
even contact an agent who is using Bait Pricing. Avoid
them completely. If
you want the best price for your home, the first thing
you need is buyers who can afford to pay the best
price for your home.
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A PRICE WHICH IS TOO HIGH
CAN MAKE BUYERS IGNORE YOUR HOME.
A home will quickly become 'stale'
if it is not sold in a few weeks. And stale homes
get lower prices because buyers wonder why others
rejected it. Your home must never be seen as a reject.
But if you price your home too
low, you might sell it too low. |
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YOU SHOULD
SET A STARTING PRICE high enough to protect you from
selling too low and appealing enough to attract the
best buyers. The buyers are told that the price you
ask is the price you will accept if that price is the
best price you are offered. Be
careful. Some agents say that when you put a price
on a home the price can only go down. This shows that
these agents are poor negotiators.
The starting price for your
home can go up or down. It depends how many buyers
are interested and the skill of your agent at negotiating.
Many homes sell for more than their starting price.
If two or more buyers are interested, the agent will
ask each buyer to offer their best price in confidence.
You take the best offer. It's fair and it's simple.
Unlike bait pricing or auctions,
buyers are told the truth from the start. This attracts
buyers. There is no gazumping, no deception and you
get the best market price.
An honest agent should be able
to advise you about the price of your home. But, if
you have any doubt, you should engage an independent
valuer. |
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THERE ARE TWO BIG
DANGERS WITH OPEN INSPECTIONS - first, they
are a security risk and second, they can easily damage
the value of your home.
Despite the warnings and the enormous evidence, many
agents continue to allow hordes of strangers to wander
through family homes. Most people who visit open inspections
are lookers, not buyers. Thieves also visit open inspections
and check the home for a future break-in. Your home
is probably not insured from theft caused by an open
inspection.
But the purpose of open inspections is not to sell
the home, it is to create the impression of activity
and "condition" sellers to lower their prices.
Sellers believe that the people looking at their home
are 'buyers'. This makes them easy to persuade to
reduce their prices. Sure, some of the people at the
open inspections will be buyers. But the agents rarely
know who is a real buyer and who is a looker. The
agents then say to the sellers, "See, it didn't
sell. They all think the price is too high. "
As with typical advertising, one of the reasons the
home does not sell is because the real buyers wonder
what's wrong with it. Hence the value is damaged and
the price has to be lowered.
Open Inspections are also used by agents to find
sellers of other homes in the area. This is one of
the most common behind-the-scenes tricks in real estate.
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INSIST
ON YOUR SECURITY.
The best agents interview buyers before bringing them
to your home. This is called "Qualifying".
And that's all you want - genuine qualified buyers.
These buyers should be able to inspect your home at
any time (within reason). You hire an agent to sell
your home for the best market price, not to wave people
through your home. You could do that yourself and not
have to pay an agent. If
the agent says there is no security risk, ask the
agent to accept responsibility.
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IT CAN BE A BIG MISTAKE
TO REJECT EARLY BUYERS FOR YOUR HOME.
Many sellers have discovered, from bitter experience,
that the buyers they rejected when their home was
first placed for sale were the buyers prepared to
pay the highest price.
An efficient agent will have a `bank' of buyers waiting.
The agent will select the best buyers and bring them
to your home. This can be your best chance to get
the best price. If your home does not sell to any
of the buyers in the 'bank", you will have to
wait for new buyers to enter the market. The number
of buyers for your home will get lower not higher,
as time goes on. And your price will often get lower
too.
Agents who say it may take many weeks to find a buyer
are admitting that they are inefficient - or they
are failing to tell you the truth about the value
of your home. They know your home is priced too high
and they have to "condition" you down in
price. The purpose of advertisements and massive numbers
of inspections is not to "search for buyers"
- the buyers are already in the area - its to "condition"
you with lots of visible activity. This activity damages
the value of your home. It tells buyers that your
home is not sold. It also makes you think the agent
has worked hard. But hard work is not the same as
efficiency
How many times do you hear of sellers having their
homes for sale for a long time and getting a higher
price? Almost never.
High prices come early. Low prices come late.
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CONSIDER
CAREFULLY THE EARLY OFFERS YOU RECEIVE.
You may even get the full asking price (or more) in
the first few days. If the early price enables you to
achieve your goals, you should strongly consider selling
sooner rather than later at a price which is likely
to be much lower. The
hallmark of an efficient agent is one who can find
the best buyer willing to pay the best price in the
shortest time and with the least cost to you. That's
efficiency. |
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TOO MANY SELLERS PAY
FAR TOO MUCH COMMISSION.
The most important point is what you get for the commission
you pay. lf you get a lower price than the agent quoted
you, then you should not be paying any commission.
The wrong agent can do tremendous damage to the value
of your home. Some agents not only get lower prices,
their lack of competence can cause your home to be
sold for a lower price. And many of them charge high
commissions. These agents are bad value at any price.
The most important qualities in an agent are honesty
and good negotiating skills. Honest agents are prepared
to prove themselves by not
charging until after your home is sold and you are
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THERE ARE
FOUR FACTORS WITH PAYING COMMISSION about which
you should be very careful. The first is paying money
in advance. Don't do it. The second is being asked to
sign anything which requires you to pay if your home
is not sold. Don't do it. The third is an agent who
agrees to give you a discounted rate before your home
is sold.
If the agents discount their own price you can be almost
sure they are going to discount the price of your home.
Be careful. If you want to negotiate the amount of the
commission, do it at the time of the sale, not at the
time when you hire the agent.
Fees charged by agents are negotiable, no matter what
they tell you. Just stay focused on your net price.
The fourth factor is called the Bonus Fee. On the surface,
it seems fair. It means you pay a "bonus"
if your home sells for a higher price. Don't do it.
Just pay a standard set rate AFTER
you are happy with the price and the service. |
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DULL HOMES GET DULL PRICES.
But a home which sparkles, and has the right feeling,
always sells for a higher price.
Be careful what you spend on
improvements to your home. What suits you may not
suit every buyer. You rarely get back more than half
the cost of your improvements when you sell. Do not
spend large sums on home improvement immediately prior
to selling your home.
Pay attention to the little
things which create a big impression.
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MAKE
THE ATMOSPHERE NATURAL AND RELAXED,
even if it means changing your living habits. Nothing
turns people off more than bad smells, so be sure your
home is fresh. Buyers are aware of gimmicks such as
a coffee pot brewing, a cake in the oven or classical
music playing softly in the background. False attempts
to add appeal often have the reverse affect. Genuine
appeal wins the buyers. A radio or a TV - never too
loud - is a natural part of home life. Well-made beds
with warm quilts, lots of pillows and the ultimate mood
enhancer - the teddy bear, really make a home feel like
home. Home truly is 'where the heart is' and anything
which increases the emotional feeling of comfort is
something we all love.
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has 'qualified' the buyers, they will not be 'lookers',
they will be genuine people who can afford your asking
price. Their feelings will be the main reason they accept
or reject your home. The word 'love' is common with
home-buying. Buyers say, 'We loved that home and that's
why we bought it." So, make sure you present your
home at its finest. If buyers fall in love with your
home, they will pay their best price to own it. |
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EACH YEAR, THOUSANDS
OF HOME SELLERS ARE HURT
- both financially and emotionally by unethical agents
and flawed real estate systems. If you are not happy
- you must complain. Even if you feel you will not
be helped, your complaint will encourage the real
estate authorities to introduce increased protection
for consumers. It is the lack of willingness of many
consumers to complain that allows agents to continue
to hurt consumers. Your complaint will help. If you
are hurt - either financially or emotionally - consider
others who will be hurt too if you do nothing about
it.
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TO
COMPLAIN ABOUT A REAL ESTATE AGENT
contact the Department of Fair Trading in your state.
It is often useless to complain to the Real Estate Institutes
as they represent agents not consumers. They do not
give compensation for damage done by their members.
They may tell you to take legal action. But few sellers
can afford the expense. Many can't be bothered hearing
the standard excuses from the real estate industry.
But, please, no
matter how frustrating it may be, speak out. If you
have suffered loss and you cannot obtain compensation,
you can contact The Jenman Group and apply for assistance
under the Jenman APPROVED Consumer Protection Fund.
This fund will consider giving financial assistance
to honest consumers who do not have the time, the
knowledge or the resources to take action against
dishonest agents.
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