When you are skimming through Trademe these days, you will notice that an overwhelming majority of the properties up there are going to auction or alternatively they are listed as ‘by negotiation.’
This can be extremely frustrating for someone who has a defined list of criteria and is simply wanting to compare all of the properties that are coming up for sale within their budget.
It’s never that easy though.
When you inevitably find your dream property staring back at you from the Trademe feed, rather than put you out of your misery by listing that exorbitant asking price up front, that confounded ‘by negotiation’ label forces you to call the agent and try to draw a number out of them that way.
Of course, this would be fine if they told you the truth during that phonecall- it makes sense that they want to establish a more personal dialogue with you and perhaps they have other listings that are more in line with your budget. They’re real estate experts right?
But that’s not how those calls go….
Usually when you ask for a general price indication, the response will go something like this,
“Well, obviously this one is going to auction, but so far the buyer feedback from our open homes has been around $650,000.”
This is the moment where your heart will likely jump into your throat and you’ll call your partner in a sweating frenzy of excitement, “Babe, I think I’ve found the one! Can you get out of the office during your lunchbreak today and come to view it with me?!”
Three weeks later you will turn up at the auction, nervously looking around at the disarming number of well dressed, much older prospective buyers, but holding onto the promising conversation you had with the broker the day before, “You guys are approved up to $700,000.”
That’s a bit more than you are really willing to spend, but you do like this place a lot…
Half an hour later, the hammer comes down at $875,000!
You never had a chance.
Why do agents do it? Is this just a cruel act of sadism from a jaded salesman?
If only that were true…
Unfortunately, there is a very calculated method to this. In my time, I have come across more than one ‘coaching’ video, outlining these tactics. It’s all part of the strategy to wear you down and lower your expectations.
Sure, they could do this over the phone in that initial conversation, but that’s not what you want to hear during those early days is it? If they deliver that bad news up front, you will just call the next agent who will feed them the same fairy-tale. Once they’ve put you in that auction room seat and delivered you that emotional roller coaster, they’ve got you.
That’s when they finally have the conversation, they should have led with from the outset.
“Sorry guys this market is just crazy right now. I do have a little studio unit three hours out of the city centre that might be more within your budget though…..”
Nothing’s going to change the reality of our over priced market. But you can save yourself some heartache by applying a healthy layer of scepticism when ever an agent talks about ‘buyer feedback.’
I’ve viewed a lot of property in my time and funnily enough, have never been asked by an agent, “what do you think this is worth?”