Do you know which profession regularly ranks as one of the least trustworthy?
Unfortunately, it’s real estate agents.
Although they do rank better than politicians, which is something at least!
Now, I’m not here to debate whether agents deserve that ranking or not, but I do know that most work hard for their vendor clients and do so honourably and ethically.
But it’s their little “white lies” that seem to be the major problem.
You know, those word tricks of the trade that they use to encourage a buyer to make an offer or motivate more people to show up to an auction.
But are they really lies?
And if they’re not, what do they actually mean?
1. We’ve just received another offer
Let’s say you’re still deciding whether to make a solid offer on a property when the agent calls you and says they’ve just received another offer so you better hurry up.
Now this could well be true but all offers are not created equally.
Why is that, you might ask?
Well, a verbal offer isn’t worth the paper it isn’t written on!
To find out how truthful the agent’s statement is, you simply need to ask whether it is a verbal offer or a written one via a signed contract of sale.
If it’s the former, there really is no rush.
If it’s latter, you’ll need to decide whether you wish to submit a written offer which will be in competition with the other buyer.
And that means, thinking strategically about price as well as any special conditions.
2. They property is going to auction, but the vendor is open to offers beforehand
Here’s the thing: auctions are a selling strategy to increase competition on the day as well as the likelihood of a high price being achieved.
I’m not saying that some vendors might not be open to offers before auction day, but generally speaking it’s really just a price fishing expedition.
Think about it: by submitting an offer before the auction, you’re actually giving away your budget without any guarantee of it being accepted by the vendor.
More often than not, agents will entice you into making pre-auction offers to test buyer interest.
This can help them gain a better insight into how much the market might pay so they prepare their vendor to set their target reserve accordingly.
More ruthless agents can sometimes use this information against unsuspecting emotional buyers in particular.
Your budget is one of the strongest cards you have on auction day so always think twice before giving it away long before you’ve even had a chance to use it.
3. This property is priced to sell
The marketing for this property promises potential buyers that it’s priced to sell!
And when you go to the open home, the agent repeats this mantra and says, “There’s no negotiating at this price”.
But there’s no sugar coating it: real estate investment is all about negotiation!
That’s because sellers and buyers will generally have different views on value because of a whole bunch of factors to numerous to outline here.
With this old chestnut, then, don’t be swayed by a marketing ploy to make you think that the property is priced as low as the vendor is prepared to go.
If the vendor wants or needs to sell, then negotiating on price is the only way they can do that.
The truth is out there….
I’ve outlined three of the more common real estate little white lies, but there are plenty more out there.
But my own observation is that most agents will give you the information you need to make an informed decision without having to use hard sell tactics such as the ones above.
If you find yourself backed into a corner, or don’t like the pressure tactics coming your way, stand your ground and make sure the agent understands your displeasure.
If they lose the sale because they’ve resorted to tired old tricks of the trade, well, I wouldn’t want to be them when they have to explain that to their vendor clients.
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