Beyond buyer agent and buyer advocate
Your Melbourne property investment adviser
Buying your first property is one of life’s more stressful rites of passage. Well, at least until you sell your first property. It’s only then that you really learn if you bought well in the first place or if your home appeals to the market. You see, this time your success rest on the choices of others rather than your own. Selling can test the strongest self-esteem.
Of course, you’ll now have a real estate agent on the team waiting to shield you from these petty humiliations and to undertake the numerous tasks to facilitate a success sale. By the way, don’t even think of going it alone. After seeing many great real agents in action over the years, we're astounded that a layperson would attempt to sell their own home. Despite what you might read on DIY property-selling websites, it is simply too easy to get it wrong and lose tens of thousands of dollars.
That’s not to say real estate agents always get it right. Sometimes the agent is ill-suited to selling a property because it is located outside their area of expertise or is different in size and style to their typical work. On other occasions, the agent is over-worked, inexperienced or even lazy and they don’t devote the requisite effort or judgement in delivering your property to the market. And finally, you can just be plain unlucky. There might be an unexpected glut of similar properties listed on the market just days after yours is and suddenly your prospective buyers are spoilt for choice.
In a perfect world, you would have chosen a great real estate agent who is on their game. But what if the sales campaign is two-to-three weeks in and you’re getting a horrible feeling things aren’t going well? First off, check these signs for the state of campaign: the numbers attending the open-for-inspections; return visitors; requests for contracts; requests to do building and pest inspections; and calls to discuss contract terms. If these vital signs are flat-lining, it’s time to act and sit down with your agent.
A property usually struggles for one of two reasons. It’s either been mis-marketed or it’s over-priced. Let’s start with the marketing. Revisit the advertising. Ask yourself, is it really compelling? If not, consider a wholesale change to copy.
The problem may be an over-stating of the amount of accommodation. For instance, in a misguided attempt to maximise price, you sometimes see an ad for a three-bedroom house which is really just a two-bedder-and-a-small-study. Those looking for a three-bedroom house dismiss it as soon as they see the floor plan, whilst the group most likely to buy the property – those after a two-bedder – never see the ad in the first place. If this is the case, you may need to commission new photography so you can present the faux third bedroom as a genuine study area.
The agent shouldn’t just be relying on advertising. They should be engaging their database of known buyers. Make sure they are.
Should you lower your quote range or listed price? It is likely that the agent will want you to. And indeed, there are agents who, as a matter of course, work on clients to lower their price expectations as soon as they sign the sales authority. But push back if the quote was based on the original valuation by the agent. Grill them on why the price no longer holds. Escalate the matter to a principal of the agency if needs be.
Ultimately, reducing the asking price may be necessary. It’s usually less awkward in private treaty sales, where vendors are often negotiated down from the initial list price. For auctions, it tends to be a glaring signal of a struggling campaign. It is usually better to grit your teeth and stick with the current quote range but for the agent to word up parties that the reserve is likely to sit comfortably within the quote range.
You may dread that the auction will fail. Ultimately, vendors should not necessarily fear a property being passed in. This is when a good agent earns their fee, through an intense process of engaging all those who showed an interest in the property and by identifying what will get one person over the line such as offering a longer or shorter settlement period.
Sometimes, more drastic action is required. Propose to the agent that a second agency is engaged to support the campaign, with fees split 50/50. Known as a conjunctional sale, it can often quickly throw up a willing buyer who simply didn’t move in the first agency’s circles. Your incumbent may not be thrilled at this prospect of losing half their fee, but a wise one will recognise that half the fees are better than nothing from an aborted sale.
Finally, consider taking the property off the market, resting it for a few months, and then relisting it with a completely refreshed listing – new copy, re-arranged furniture and new photography – and possibly with a new agent. It can be better to retreat and regroup rather than make too many concessions just to sell the property. You’ll have learnt a lot from the first attempt and be the stronger for it.
Want to automatically receive our blog updates? Subscribe to our RSS feed and you'll be sent an email each time a new entry is posted. Click here.