“Do your homework. Throw comparable sales at the agent, letting them know what you’re talking about”
“I look for someone who has good market knowledge in their area – and they know the kinds of buyers they should target”
When it comes down to trust, real estate agents rank about as highly as used car salespeople and lawyers. Negative perceptions of real estate agents abound, with many consumers suspicious of their underlying motivations.
These perceptions stem partly from a belief that real estate agents don’t act in the best interests of the buyer or the seller. Agents are typically remunerated on commissions received from the sale of properties and not the eventual price achieved, so it’s commonplace that an agent’s desire to achieve an impressive turnover volume will negate any efforts to maximise price.
Former real estate agent Dennis Kalofonos, director of Sydney Property Finders maintains that mis-communication lies at the heart of problems between the agent and buyers or sellers. “Ninety per cent of real estate agents are actually quite honest,” he says. “The problem is that people don’t communicate with them – you need to engage the real estate agent in conversation, and ask them direct questions.”
This sentiment is echoed by Meighan Hetherington, managing director at Property Pursuit Buyer’s Agents, herself a former real estate agent. “People I’ve talked to didn’t feel like … the things talked about in the initial listing discussion were delivered. There was no shared understanding of the experience. Sellers need to work out their expectations then communicate this back to their agents.”
Improving the relationship with your real estate agent is all about managing expectations on both sides. “Ask very direct questions,” Kalofonos says. “Take a position as far as price is concerned, it may not be the highest that you’re willing to offer, then ask, ‘do you think I’m wasting my time at this level?’ ”
Determine the amount of communication you expect up-front, Hetherington says. “Do you want feedback after an inspection? Some people like phone calls, whereas others want to see it in writing. It’s about setting those boundaries up-front and being accountable for following this through.”
If you know your market inside out, then make sure your agent realises this as they will be less likely to think they can pull one over on you. “Do your homework. Throw comparable sales at the agent, letting them know what you’re talking about,” Kalofonos advises.
If you’re selling, Kalofonos believes that “you need to act as a buyer in the market that you’re selling in. Go to as many inspections and look at as many similar properties as you can”. Even with the best-laid plans to communicate effectively, Hetherington says it’s crucial to select an agent who has a track record of maintaining positive relations.
“I look for someone who has good market knowledge in their area – and they know the kinds of buyers they should target. They should have lots of testimonials from past clients – I would also want to speak with at least two of their former clients.”
Word of a reputable agent tends to spread quickly, she adds. “A good agent will recognise that it’s not just about getting the sale, it’s about the happy seller who talks to their friends and neighbours.”
Tricks of the trade
A common sales tactic is to exaggerate the level of interest in the product or service, in order to rush potential buyers into making a decision. Being salespeople, another perception is that an agent often stretches the truth, or omits vital details about a property in order to hurry a sale.
“Buyers can get caught out when an agent puts time pressure on them, by saying that another buyer has shown interest and is returning later on for a second inspection,” Hetherington says, adding that agents use the vendor’s haste to sell as a tool to rush buyers.
“There are times when buyers do say ‘I want to have a think’ and then decide that the property isn’t for them. An owner is always expecting an offer – and agents can use this to their advantage.”
Creative pricing is another technique agents employ, according to Hetherington. “At the auction, the agent’s job is to gather bidders in the first four to five weeks of the campaign who are interested in the property. They may use a hook price that is lower than what the vendors expect and encourage purchasers to make offers prior to the auction based on this indication. Agents then use these low offers to condition the vendor into lowering the reserve price.”
Fortunately you can employ your own tactics to subvert agent trickery, Kalofonos says. “Visit the property outside the opening hours to see if there have been other private inspections. Send a friend over to see what the agent is saying about the property, and compare notes.”