‘Coach you to pay more’: Buyers agents expose secret tactics used by selling agents
It can be daunting to buy a property. Not just because the competition is fierce or the numbers are high, but because you are pitted against some of the best salespeople around – real estate agents.
But since one of the most important aspects of successful real estate transacting is the power of psychology, says Melbourne buyers agent Abdullah Nouh from Mecca Property Group, buyers can strengthen their own moves by learning how real estate agents operate.
Here are some of the common selling strategies of selling agents as revealed by buyers agents.
NOT GIVING A PRICE GUIDE
When real estate agents don’t include price guides on their listings, it can prove an effective marketing technique to increase inquiries, says Sydney buyers agent Michelle May.
NSW only recently passed new legislation that will require all listings to have a price guide, following a move by Victoria in 2017. For now, it’s still common to see listing after listing with the words “Contact agent” in the place of a price guide.
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“One of the reasons why they don’t put price guides on is because they want you to inquire and that’s a way for them to have a chat with you and sort of gauge how qualified you are as a buyer,” May says.
The exception is in Queensland, where price guides aren’t even allowed to be provided for properties going to auction.
ASKING FOR VERBAL OFFERS
Nouh says sometimes agents want verbal offers in order to try and gauge where the market is – including what you would pay and how this stacks up against the vendor’s expectations.
“They sort of see how they can potentially push the price further or give feedback to the seller,” he says.
He warns against committing to any loose verbal offers early in the process, especially if you haven’t done your due diligence.
How can you judge whether your offer is the best one received so far?
QUOTING LOW
In her experience working in the Sydney market, May has come across many price guides given as single figures rather than ranges. She says, due to the requirements in NSW where there can only be a maximum 10 per cent variance on the agency agreement, the single figure given usually represents the bottom of the 10 per cent range.
“That guide is the floor and that is what is set to drive the foot traffic through the door,” she says.
Many buyers realise this and will add an extra amount onto the price guide when they give feedback to the agent, so that when the agent greets other buyers, they subsequently quote market feedback as a bit higher than the initial guide.
In addition to the creeping price guide, the three comparables offered by the agent can often vary in terms of price, creating the impression that buyers might have to pay quite a bit more to secure the property.
“It’s kind of planting that idea in your head to coach you to pay more,” she says.
SILENT AUCTIONS
Sometimes, you might get a call from an agent looking to make a deal prior to auction, says May.
“It may well be that there is no one else there and you’re their best buyer and they’re trying to gauge you to see how much you’re prepared to go for,” she says. “If they’re pressuring you to put it in an offer, it’s likely because they don’t have a level of interest to take it to auction.”
In that situation, you should be careful not to commit to anything unless you have done your due diligence and are sure that the property is right for you, she says.
“The agent would still in most cases expect an unconditional offer under auction conditions,” she says.
FLIPPING THE DYNAMIC
It’s important to ask agents from the get-go how they operate, especially when it comes to treating offers, says Nouh.
“Some agents just run a ‘best and final’ and the buyer misses out because they were happy to go another 10k but they’ve missed out by $2,000,” he says.
In fact, it’s crucial to find out as much as you can about the motivation of the seller while avoiding giving too much away about yourself – especially your budget, he says.
“The more information a buyer has, it increases their ability to then tailor the offer to suit what the vendors are looking for,” he says.
COMMON AGENT PHRASES
Want to know what the lingo really means? Here are some interpretations of common real estate phrases used in listings, according to Abdullah Nouh
“Full of character” = a very old home
“Low maintenance” = a very small block with minimal landscaping
“Growth corridor” = the middle of nowhere, where a Coles will be built in five years’ time
An “up and coming area” = an area that’s not there yet
Real estate agents are trained negotiators and most buyers walk in unprepared. Knowing the tactics they use is one of the most underrated advantages a buyer can have.
