Pay close attention to what your real estate agent promises you: Edwin Almeida

Pay close attention to what your real estate agent promises you: Edwin Almeida
Pay close attention to what your real estate agent promises you: Edwin Almeida

Now, more than ever before, is the time to seriously consider and pay close attention to what your real estate agent promises you.

Don’t be too complacent and think that most agents actually care about your best interests. Most realtors wouldn’t shout you a cup of coffee, if it means actually putting their hand in their pockets to accommodate your needs.

No, this isn’t a rant about Vendor Paid Advertising (VPA). We’ve already had that discussion.

This article is about making sure, your agent, is looking after your best interests. Your interests when they suggest that your property is best marketed; via an auction campaign.

Below are some simple steps to follow and questions to pose to the agents that are hell-bent on auction strategies.

In this instance, the focus is on the auctioneer, more than the listing agent that wants to sign you up. Or in some cases: stitch-you-up.

Questions you need to ask about the auctioneer:

1)     Price: Is the auctioneer the cheapest in the area?

2)     Performance: How well does he/she perform?

3)     Pre-auction inspection: Will they actually come to view the home before the day of the auction?

4)     Price

Like everything, pay peanuts and you will get monkeys. But sometimes in the auction game, you also get very expensive baboons.

The key here is, don’t just base the decision on the criteria of “price”. Base your decision, in collaboration with the other two points, as well as price.

Performance

To help you better gauge the caliber of the individual that will have control of the sale on the day, make time to see them in action. Do it first hand and don’t rely on what their mate, the real estate agent, tells you about them.

Pre-auction inspection

I find it difficult to grasp the belief that an auctioneer, that has 5-9 properties to auction off in a period of 5 hours, can actually perform to their best of their ability on the day.

What I have seen is, most auctioneers stumbling and running late from appointment to appointment in Saturday traffic-jams in Sydney.

Their complacency, may have worked for them as people are prepared to pay 20-30% above the odds in a hot market; however, the tide has turned. Clearance rates are dropping weekly and rapidly.

You may be about to give a fool, the reigns of what is your most valuable asset. Think twice before you do. Perhaps the following points will assist you with your decision.

Foolish things agents and auctioneers do when they are under pressure

1)     Run an auction when no one has actually registered nor has anyone requested contracts prior to day of auction. I witnessed one last week. It was disastrous for     the vendor.

2)     Advertise low price-guides to draw a crowd only to pass the property in at the low price-guide.

3)     Calling vendors bid low, believing this will stimulate the bidding. I see this occur over and over again, and auctioneers do this even when the reserve is 15%-25% higher.

The common outcome: property is passed in at vendors bid and therefore, devaluing the potential of the property.

4)     Auctioneer not properly informed, if at all, about material facts such as; easements and covenants, development potential, history and not knowing in detail about the property.

5)     Auctioneers, thinking more about the traffic conditions they will encounter travelling to the next property, than the actual sale at hand.

6)     Agents and auctioneers conducting room auctions with 3 or more properties. Again, may have worked in a hot market, however, this is suicide for the vendor in normal circumstance.

Prevention is better than cure

To understand why agents are pushing auctions, you need to have a behind the scenes peak. Most real estate training manuals simply state:

“…Auction campaigns, gives the agent a definitive sales date. One that vendors and buyers are locked into… and you’re guaranteed your commission”

The above would be perfect if it also meant two outcomes:  first, the sale achieves the best price and second, the agent was ethical about the entire campaign. 

If your agent’s recommendations of an auctioneer does not meet the above criteria and what you hear and see on the video; you may well lose tens if not hundreds of thousands of dollars.  Then again, ask yourself, is your property that unique to go to auction, and is it really the best strategy.

Happy selling. 

 

EDWIN ALMEIDA is licensee in charge of Just Think Real Estate.

He is also the creator of Oz Real Estate.TV and a presenter for propertyinvestingvault.com.

Edwin Almeida

Edwin Almeida

Edwin Almeida is managing partner and licensee-in-charge of Just Think Real Estate.

Tags: 
Auction Residential Market

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