Real Estate Agent’s Advice is hard to understand

Bellpop on 23/01/2020 - 20:53
Last edited 23/01/2020 - 22:05

Currently signed on with a real estate agent after a recommendation from a friend.

Had the bank’s internal valuer visit the house at 9am to take photos and do his thing. He then left and the RE agent arrived to talk is through the process and the price to expect. Our research suggested 950k - 1.1. RE agent said we should price set low price guide to get people interested at 790k. Claimed it was due to ‘psychology’. Saying we could possibly get 850k.

We pushed back saying that was not what we were expecting, and with our hopes price in mind, no one is going to pay 200k + over the price guide without wondering what was wrong with the house to start with.

Then, the bank emailed us with their formal house valuation. They valued it at 1.05. The agent seemed to be way off re the price.

The contract showed his commission on the price range we wanted and for the 90k difference in sale price for us, the commission price changed by very little. Seems there’s not much incentive for him to get the best price for us.

He showed us a diagram of how best offers apparently come in the first week and get lower. Seems this would correlate with his pay per day over time. The longer we make him wait to get the best price, the less he is paid on a per day basis for our sale.

Should we just be more assertive with the agent or try to get out of the exclusivity contract with him?

Do real estate agents work for themselves instead of the vendor?

Poll Options

  • 300
    Yes
  • 3
    No
General Discussion

Comments

  • reubenb87 on 23/01/2020 - 21:05
    +13

    RE agent agenda is to sell house as quickly as possible, so as long as you know the motivation

    • parsimonious one on 25/01/2020 - 12:46
      +14

      Exactly. They DGAF about you.

      I couldn’t see anyone had posted this already but this quick clip from the guys at freakanomics explains the situation pretty well

      https://youtu.be/n0rV3ydBhUw

      • reubenb87 on 25/01/2020 - 13:29
        +1

        Thanks this is where I originally saw it, made a lot of sense when I saw it.

      • anonymous01 on 25/01/2020 - 22:22
        +7

        Hahaha there's atleast one REA who read this post and voted No.

        Also, in my whole life, I've never seen a poll this much one-sided. OP you may have created history.

        (152: Yes, 1:No at the time of this post)

        • Bellpop on 25/01/2020 - 22:44

          Haha yeah I was thinking the same thing. Fairly telling.

  • bohn on 23/01/2020 - 21:06
    +9

    You've signed an exclusive authority. Even if you sell it privately the agent can come at you.

    You can see if he will let you out of it, alternatively wait it out. How long did he make it.. the full 120? ;)

    You also want the authority to list the amount you want to sell it for.. otherwise if you get a low offer that is above the price he puts on the authority, he can claim commission if you refuse to sell at that price. They don't do that too often, but it can happen.

    • Bellpop on 23/01/2020 - 21:27
      +4

      Wow. That’s an eye opener. Glad we insisted on a price we were more happy with on the form. Thanks for the heads up.

    • saty1296 on 25/01/2020 - 22:11
      +1

      In my personal experience, all real estate agents work for themselves for their own commission. So please try to keep things on your side unless you are too desperate to sell, in that case you will become a puppet in the real estate agent's selling game at a commission that real estate agent wants.

      • Bellpop on 25/01/2020 - 22:44

        That’s becoming apparent. Thanks mate.

  • whooah1979 on 23/01/2020 - 21:12
    +4

    In this market the REA is being realistic while the bank is wishful.

    • Bellpop on 23/01/2020 - 21:36
      +3

      Not sure what the bank has to gain?

        • Nebargains on 25/01/2020 - 13:17
          +12

          ignore the advice of the specialist you're paying to give you that advice

          Specialist after completing a tafe course that takes a few months to complete…

        • ely on 26/01/2020 - 14:16

          The agent's job is to get things to a price that's acceptable for both the vendor and a buyer. All things being equal they'd prefer it be higher, because it pays them more, but a sale is higher than no sale. They can get a deal by talking buyers up or by talking vendors down (likely both), and that's one reason they want all of those possible buyers coming through and getting their opinions of what the place is worth - it helps to knock down the vendor's expectations and increases the chance of making a sale.

          The agents have an incentive to talk price up before they get the deal (otherwise you'll give it to some other agent who talks it up more), and then to switch course and start knocking your expectations down again after (so that they can actually sell it, hopefully for more than they knocked you down to so that you think they did a great job).

          OP, curious as to what the agent (and the other agents that you hopefully talked to before signing with this one) was talking price wise before you signed?

  • crentist on 23/01/2020 - 21:32
    +4

    RE agents have little motivation to spend time on houses, as you've calculated for yourself.

    It might make sense for you to wait a while for the right people to come along who are looking for exactly what your place offers and pay over 1mil, rather than have a bunch of bargain hunters who don't really like it turning up this weekend and bidding 800k because then at least it's cheap enough for their compromises.

    The value of the house is what it is, and anyone could be over/underestimating. But it's definitely in the agent's interest to have it wrapped up quick and not waste the next 3 months of their life chasing an extra $200 or whatever they'd get.

    But if you aren't in a hurry, it'd be worth it to delay it and see for yourself. You can always sell it for $800k in 6 months if things don't pan out as you hope

    • Bellpop on 23/01/2020 - 21:37
      +1

      Sound advice. I think we keep it listed but just force him to do what we want. You’re right about the difference in his commission either way. Unbelievable really.

  • Bellpop on 23/01/2020 - 22:02

    Makes sense that the longer it’s on the market to get the best price for the vendor, the less the agent gets paid per day selling it. Hmmm never thought of it this way

    • spaceflight on 25/01/2020 - 14:59
      +4

      But the agent doesn't do something every day they are trying to sell your house.

      • Ridiculous Panda on 25/01/2020 - 15:36

        Chances are he is at least taking phone calls and replying to emails about it.

    • techlead on 25/01/2020 - 21:32

      That's only true in a rising market. I reckon Australia is heading towards an economy like Japan with prolonged low interest rates, look at what happened to Japan's property prices since the 90s. They fell off a cliff and have yet to recover. Of course, Japan is a totally different country with a different economy, eg immigration is not big there, but it still give an idea of what prolonged low interests can do.

      What the agent says may be true, you may not get a better offer, but of course the agent has an incentive to sell as soon as possible.

      • ShortyX on 25/01/2020 - 22:04

        Japan’s prices peaked early 70s and early 90s then headed downward quickly as you said. It makes you wonder how long the upward trend of Aussie pricing (to ridiculous highs) will last!

        • techlead on 26/01/2020 - 09:25

          Exactly, and look at the fundamentals. Wages has been stagnant and are not expected to grow.

          Don't look at average pay as its not a good measure because it is skewed by the upper end of town earning millions. Median annual pay for Sydney is around $67,808. With no wage growth, how will people afford increasingly bigger mortgages? People are just up to their eyeballs in debt.

          • netjock on 26/01/2020 - 12:13
            -1

            @techlead: We have immigration where Japan has close to zero which will keep thing going on a bit long and frustrate people.

            The biggest risk we have is climate change which means less water and increase in prices of produce which will squeeze people's stagnant wages. If they have to cut back it will be discretionary spend which will hurt economy and jobs then house prices.

            • techlead on 26/01/2020 - 12:50

              @netjock: Our conclusion is still the same, there would be downward pressure on house prices.

              Do you think ScoMo is going to do anything concrete to address climate change? He thinks back burning is enough action on climate change…

              • netjock on 26/01/2020 - 13:12

                @techlead: ScoMo is an a populist to the older generation who wants the status quo. Old Nimbys (Not In My Back Yard).

                He doesn't know that old industries die and new ones create new jobs. For example. Cars put a lot of horse shoe fitters and makers out of business but created type manufacturing and fitting business. Even if coal generation goes there will be jobs on renewables. Problem is people who have worked 20 years in a coal plant doesn't want to retrain to work in a solar plant facing risk of change in remuneration. (I know I worked in energy).

  • hasselbladsnapper on 23/01/2020 - 22:06
    +7

    Some while ago I posed this type of situation to a dear friend of mine with his own highly respected agency.

    He informed me in general most agents were keener for a sharp price, as hanging out for a slightly higher price is not in the agents interest!. Better to ensure a sale and a slightly lower commission, than hang out for an elevated price, and possibly no sale & NO commission!.

    • Bellpop on 23/01/2020 - 22:15

      Seems that way hey. Thanks mate. Gotta look out for us here and not get influenced by the agent.

  • bqjt on 23/01/2020 - 22:08
    +5

    Irrespective of what the bank and REA valued your property; what is your assessment ? How much would you pay for your house in today's market ? You probably do not know the answer yourself.

    To find out, identify properties that are for sale in yours and nearby suburbs and a close match to yours like # of bedrooms / bathrooms, car garage, land size. If possible, go to auctions, this will give you a good idea of what people are willing to pay.

    If your area is in high demand and attracts young families (nearby schools, shopping, public transport etc), your best method to sell will be Auction. You and only you have the right to put a reserve price, so REA does not have any control on it. Bear in mind though that there are some regulations around advertised guide price, but I don't think this will have an impact.

    Hope my advise is helpful, good luck with the sale of your property.

    • Bellpop on 23/01/2020 - 22:14

      Thanks mate. I appreciate it. It is a desirable area. Close to beach, good schools, shops, etc.

      Glad the consensus is to get tough with the REA.

      • bqjt on 23/01/2020 - 22:22

        Consider this to be a nerve wrecking game, but play it on your terms.

        Are you going to sell via Auction or Private ? My strong recommendation is Auction. If your REA can't do Auction, kick him out, cancel the contract. I'm sure you can terminate the contract.

        Watch out for feedback through the open house sessions, and see what the interest is like. Also, keep an eye on how many people have returned for a second / third viewing. You will get good idea about what people are willing to spend for your property. Find out which other property are people comparing yours with, watch the sale of those properties closely. All this will aid in deciding a safe Reserve Price.

        • Bellpop on 23/01/2020 - 22:25

          Thanks mate. Why do u suggest an auction?

          • bqjt on 23/01/2020 - 22:33
            +1

            @Bellpop: There are several advantages, I will list a few below
            1. Creating competition between interested buyers will generate higher value.
            2. There is no cooling off period, so sold in auction means sold with an on the spot 10% deposit.
            3. Time taken to sell is shorter, run a 4 week campaign prior to the auction.
            4. If the area is in demand, and you reserve price is appropriate, the house will sell.

            Do the following:

            1. Watch Sky News (Real Estate, I think channel 602 if you have Foxtel) every Saturday morning, they show live Auctions of selected properties.
            2. Go to auctions in your neighbourhood to get an idea of the market.
            • Typical16-bitEnjoyer on 25/01/2020 - 16:31

              @bqjt: There are also several negatives.
              1. You'll exclude a lot of potential buyers, especially those seeking finance.
              2. You'll usually exclude a lot of first home buyers as they tend to avoid auction for their first property.
              3. You'll usually have less interested parties if there's plenty of alternate similar properties advertised regularly.

              • minotaurian on 27/01/2020 - 16:15
                +1

                @Typical16-bitEnjoyer: In areas that are not growing or the market is weak, the worse things is to have an auction. For example, from personal experience, there was a house asking price of 370k….the price was based on historical data, offered 300k. It was about 2 months later, they responded, but instead said wanted to put it on auction. Surprisingly, the highest offer was 260k, they called back wanting 300k. We said 270k…this person lost out 30k due to auction and also screwed up the neighbourhood… All other similar houses then sold for similar prices 250 to 300k

            • ely on 26/01/2020 - 14:20

              @bqjt: As someone with access to a lot of real estate data and colleagues that actually analyse it (I don't)…

              Broadly, auctions do not reduce the time to sell, nor increase prices. In some markets, in some market conditions, they do seem to but it's far from universal.

  • AlienC on 23/01/2020 - 22:08
    +1

    Basically what everyone else has said and that Real Estate Agents are only in business to profit for themselves unless it is advice from a trusted close family or friend but even then they might say something wrong just to give another agent a boost in their industry.

    Any sort of agent just wants to make as much money as possible and that means selling the product as fast as possible because selling 8 houses in a year is much better than selling say 2 or 3.

    So yeah don't get bullied by any Real Estate Agent and only sell at your price because the difference could be massive for you but like others have said hardly worth anything to the Real Estate Agent.

    Trust me I know a few Real Estate Agents in real life and they are the type of people who don't even hide the fact that they are trying to throw you under the bus in fact they make that fact known very openly haha lol so yeah they are the perfect person to make the sale but make the sale on your own terms and numbers not theirs no matter what shady tactics they use and they will try everything they can haha.

    • Bellpop on 23/01/2020 - 22:12

      Yeah, we meant that this morning. The discrepancy between what we expect (and bank’s valuation) were way off.

      It’s a shame we don’t know a RE we can trust.

      Thanks for the feedback :)

      • AlienC on 23/01/2020 - 22:15

        It’s a shame we don’t know a RE we can trust.

        It is hard but there has to be at least one out there that wants to stand out from the rest but they are probably busy helping a list load of people right now knowing those kind of people that exist out there.

        Good luck in your property selling travels.

        • Bellpop on 23/01/2020 - 22:25

          Thanks mate. Yeah it’s a stressful
          Time!

      • techlead on 25/01/2020 - 21:32
        +1

        Its unlikely you can trust any RE, the incentives are not aligned.

        • Bellpop on 25/01/2020 - 21:34

          So true. He tried to tell me he’s not motivated by commission. Hmmm

          • BreezyPalms on 27/01/2020 - 10:24
            +3

            @Bellpop: If you don't trust him now then terminate the contract if you can - sounds like you are already off on a bad start.

            Not all agents are scumbag liars… but many are! Yes they are motivated by commission and yes a small increase in the sale price is a negligible increase in fee for them, but the real prize for the agent is getting the listing in the first place… a listing = advertising, market share, market dominance, and enquiries which may lead to future listings……so make them compete!

            Firstly only ever use an agent who is an expert in that suburb…. using an out of area agent is highly risky as they will not understand the nuances of that market or know all the comparable sales which they can use to help convince the buyer.

            You should have ideally done your homework (research the top agents in your area and recent sales… use realestate.com.au and domain.com.au, see who is active, who has the most listings and who sells houses like yours most frequently) and then have the top 3-4 agents pitch for the work. At the interview have some tough questions ready:

            • what are the tree most comparable sales for my property? (this is where your research comes into play… if they don't know about an obvious comparable sale then they shouldn't be considered, that is their job to know!)
            • what do you think my property is worth (a good agent will usually give a range… again, your homework will come into play because you will have a fair indication if they are over quoting or under quoting)
            • how do you propose to market and sell the property. Why? Can you tell me about your most recent experience selling this way. How much did this vendor pay for marketing.
            • what time of day do you propose to have the open home? (this makes them think… there may be a time that the yard is particularly sunny or a highway nearby is less noisy etc, a good agent should have some ideas and it is a good way to gauge how intelligent and enthusiastic they are. Also, if you ultimately go with this agent and they propose a different time to fit their schedule you can call them on it!)

            After this process ask each agent for a proposal/ fee agreement for consideration. Then explain that you plan to make a decision within the next 2 weeks.

            Next step, visit an open home for each agent. Do not tell them in advance as the point here is to assess how this agent manages an open home. E.g. what is the arrival experience (are you greeted by a friendly assistant etc), how is the property presented and most importantly, is the lead agent actually present at the open home? If they are not, that is a strike!

            Once you have done this process you should have a top choice in mind… then negotiate the commission/ contract.

  • rompastompa on 23/01/2020 - 22:33
    +3

    Claimed it was due to ‘psychology’.

    I despise this tactic. I put an offer on a place slightly under the 'From' price, and they countered significantly higher. It may work on people who 'fall in love' with the place, but I felt it was dishonest and a shady tactic if they're not going to accept close to the 'advertised' figure. I avoided that RE agent/agency after that as I knew it wouldn't be worth my time.

    The only psychological effect I can see is that it'll convince you, the seller, to sell for less than you were expecting without you realizing and results in a quicker sale/commission.

    • Bellpop on 23/01/2020 - 22:56

      Yep I agree. I think he was priming us for a lower price expectation, so we would sell sooner, he gets his commission and can move on.

    • pernunz on 24/01/2020 - 13:31
      +1

      A place near us. Auction from $599K. Not a single bidder at auction, now up for offers over $660K

      • JetBombat on 27/01/2020 - 12:03

        What's the logic there?

  • JimmyF on 23/01/2020 - 22:36
    +3

    The contract showed his commission on the price range we wanted and for the 90k difference in sale price for us, the commission price changed by very little. Seems there’s not much incentive for him to get the best price for us.

    THIS. So many people think agents want to get the highest price to get the most commission, but really they just want a sale. If it sells 'cheap' they still get the bulk of their commission anyhow, and as you can see by looking at your figures, squeezing out a extra $100k or so, really makes very little to them.

    The agent is pushing to go lower, as houses in the over $1m range and slow moves these days. You price out a lot of people from the market.

    • Bellpop on 23/01/2020 - 22:57
      +3

      Yep. Agree- their commission changes so little to them while an extra 90k is a lot of eneloops to us

      • AlienC on 24/01/2020 - 03:28

        That's a lotta something!

      • ely on 26/01/2020 - 14:25

        Bear in mind that there have been some shady examples of this sort of thing

        • agent convinces vendors that their place is worth less than the agent actually expects to sell for
        • agent agrees to a low commission on that low price expectation, but with a significantly higher cut of anything over that for "outperformance"
        • agent sells at a more realistic price and gets a very significant commission instead

        So if the agent did have a lot of incentive for that extra $90k, that might also be a sign that you're getting screwed.

        But yeah, depending on location and price range, commissions generally around 2-3% of sale price (trending lower as the sale prices creep higher), $90k isn't going to be paying them that much extra for them to get excited about.

  • p1 ama on 23/01/2020 - 23:31
    +17

    I've previously worked in property valuation (though commercial, not residential property). The only way you'll have an accurate representation of how much the property is worth is for you to get your own valuation. Everyone else will have some incentive to under or over value your property.

    The bank will generally want to overvalue property because it makes their loans appear less risky on the books, meaning they'll lower their risk profile (not necessarily their risk though), and more easily satisfy capital adequacy requirements. Of course, the agent will have an incentive to undervalue your property because it'll lead to a quicker sale. The honest truth is that your property is most likely worth somewhere in between the bank's valuation and the agent's valuation.

    That said, what the agent is indeed correct about is that lower prices definitely do drive up interest. This is important in residential property markets because you're basically competing with every other seller in the area. It's also true that properties which are around for a long time tend to be quite difficult to sell. Part of it is that people tend to avoid properties that have been listed for a long time due to suspicion that something is wrong. Also, almost everyone shops for properties online. These aggregators tend to favour newer properties over older ones, so you'll always end up at the bottom of the heap.

    Overall I'm surprised that you've signed a contract with the agent without having resolved this issue first. Usually the first conversation that you'll have with an agent will be how much you want to sell for and whether that lines up with what the agent is saying. I'm also surprised that you haven't contacted multiple agents to see what they say. I think having a bit more exposure will help with your selling process.

    • AlienC on 24/01/2020 - 03:32

      Follow this ozbargainer's advice write up.

      Everything they have said so far seems like a smart tip in my books.

      The bank and agent valuation comment is also very true but don't be afraid to try to sell it for even higher as some people for some reason in the spur of the moment link high value with high prices which is not always the case in fact it is a huge smokescreen and big misconception still these days but it works and it might meet you an extra 100k or more if you are lucky.

      Good luck OP 🤞🙏👍.

      • Bellpop on 24/01/2020 - 10:02

        I agree with buyers linking high price with high quality. I think they would much prefer to buy a house with a lower bid to feel like they got a bargain in comparison to bidding over the price guide, so they feel like they’re paying ‘more than it’s worth’.

    • legs on 25/01/2020 - 21:14
      +2

      You're right that a bank lender (or broker) and the borrower/property owner would all want their property valuation to come back higher because it means that that borrower may be able to borrow more; and for the property owner that their property is worth more.

      What you've said is easy to misinterpret though as someone could read it and from it think that banks conduct valuations themselves with a specific goal to overvalue the property.

      This isn't the case. Bank's don't actually value properties themselves, you'd know this since you worked in property valuation. Banks arrange for third-party independent firms to value your property. In fact valuations and how they are conducted are also subject to specific prudential/regulatory requirements.

      People just think "the bank" is valuing their residential property because the bank initiates the valuation via the valuer firm. There is a real cost to the bank in arranging this third-party valuation but it's not generally passed on to the borrower for residential property valuations.

      If you think logically, the independent valuer firms have no incentive to over-value the property. In fact if they over value the property and the borrower goes into default and the bank claims on the mortgage to sell the property and finds that the valuer recklessly overstated the valuation then the bank may be within rights to sue the firm due to the bank having relied on that valuation in their lending decision. My understanding is that valuations are peer-reviewed and co-signed within the valuation firms as well.

      The valuer firms that are on the banks' valuation panels aren't single-operator dodgy dave businesses, they are in many cases national firms and reasonably-sized businesses in their own right. It wouldn't be good business for the valuation firm to overvalue properties as more claims of misconduct/poor valuation practice would mean more cost to that firm and higher professional indemnity insurance costs.

      If anything valuation firms would then tend to be more conservative in their price estimates because of this. The valuation firm has no incentive to overvalue the property and a lot of incentive to not overstate the value. Compared to say an agent who is trying to win a vendors business. Many agents will lead in with a higher price range if they are aware the buyer is shopping around, as the buyer will gravitate towards the agent that is saying they'll be able to achieve a higher price.

      • Bellpop on 25/01/2020 - 21:35

        The bank’s valuer even had an NAB shirt. I asked him if he worked just for them, he said yeah. He’s employed by NAB…

        • Salternative on 26/01/2020 - 14:12

          Bank Lender here, I think I might know the root cause of your discontent.
          What Legs has said above is spot on, most banks use third party valuation firms ( Opteon, CBRE, Valuecorp etc), these valuers will not look to overvalue the property , if anything they will err on the side of caution. As Legs stated above, they do not want the banks coming after them if things go south later on.
          Here's the thing, NAB is the only bank , (among the majors at least that i know of), that use their in house valuers who as you have said are NAB employees.
          This understandably creates a conflict of interest, and there is a chance that the in house valuers could be influenced to not be " as risk averse" to increase business for the bank . If you have seen a resi property valuation, you will know that one of the primary metrics is the comparable sales , is you property inferior, similar or superior to recent sales in your area?This can easily be tinkered with .
          Another thing is , Why is the bank valuing your property ?A valuation costs the bank money and if someone rocks up to the bank saying, I'm selling my property, can i have a valuation , its not gonna happen( unless you pay the bank for the valuation, even that will only be if there is a related application in place). As stated above Banks wear the valuation cost but only if there is the promise of new borrowings, ( or a partial discharge /internal refi etc). From the way i decipher it, the valuation looks to have been arranged by your broker/lender , under the promise or premise of potential new borrowings , so NAB in this case might have an incentive to value your property on the higher side to maintain its lending margins.
          Not saying the r/e agent is right here too, they have an incentive to sell as soon as they can and pocket the commission and i have seen some really dodgy and honey tongued r/e agents .
          maybe arrange an independent valuation deviod of any consideration above to the valuer and see what happens.

      • ranap on 25/01/2020 - 22:47
        +1

        Yes of course. Just like company Auditors paid by the companies always honestly report the true book of accounts and never misrepesent the audit reports to benefiting the company.

        • BartholemewH on 26/01/2020 - 23:26

          Yeah, if PwC do your books and then their audit team audit the work done then it's all above board right? I read a recent accounting article stating that up to 60% of audits aren't worth the paper they're printed on.

      • p1 ama on 27/01/2020 - 22:11

        What you've said is easy to misinterpret though as someone could read it and from it think that banks conduct valuations themselves with a specific goal to overvalue the property.

        Even if banks do not conduct the valuations themselves, the firms who do conduct the valuation are paid by the bank. This is actually a very similar issue with credit rating agencies for bonds (e.g. Moody's). This is not something that's unique here.

        Bank's don't actually value properties themselves, you'd know this since you worked in property valuation.

        I never said that they do, just that they would have an incentive to (which is obviously true).

        If you think logically, the independent valuer firms have no incentive to over-value the property.

        They actually do - "give me the valuation I want or next time I'll go with another provider" is a pretty strong incentive don't you think?

        If anything valuation firms would then tend to be more conservative in their price estimates because of this. The valuation firm has no incentive to overvalue the property and a lot of incentive to not overstate the value.

        This is actually not true. In my own personal experience (anecdotal, but I've come across many cases), bank valuations are almost always higher than the price at which the property actually sold for. It's actually not uncommon to see bank valuations significantly higher. I'm not sure whether this is some inside job or whether there's any adverse incentives there, but you wouldn't use bank valuations to decide how much a house is worth just like you wouldn't use a company's book value to judge their share price.

        Either way, I worked in valuation for investments, not for a property valuation firm who does contracts with banks so I can't tell you much more about how that process works.

  • onetwothreefour on 24/01/2020 - 06:20

    Before you signed up with this real estate agent what did the other agents you considered say?

    • Bellpop on 24/01/2020 - 08:21

      We bought the house through this guy and he seemed responsive and eager which we liked. Due to our (everyone’s?) negative perception on REAs we went with him.

  • [Deactivated] on 24/01/2020 - 08:10

    Is the agent independent or does he work for an agency? If it’s the latter the probably had buyers in mind on the books who would be interested and he could just email the listing. Most of the time there are investors waiting and looking to buy before an inspection.

    • Bellpop on 24/01/2020 - 08:22

      He works for McGrath. Seems to be the go to guy for our suburb

      • [Deactivated] on 25/01/2020 - 12:29
        -1

        I’d say he has a pool of buyers in mind, broader the range the more he can get through the front door. However, there is a big difference between pricing competitively and under quoting. Bank value can differ from the estate agents range greatly depending on what comps they pull.

  • OzHunterNSW on 24/01/2020 - 10:30

    What are you doing contemplating buying a property that "is not what was in mind"??????????????

    • Bellpop on 24/01/2020 - 16:38

      Huh, we like the new house!

  • HeWhoKnows on 24/01/2020 - 11:10

    If you havent signed get another agent
    If agent is not aiming to get an offer within the agreed price range then they are in breach of contract and you can recind

    • Bellpop on 24/01/2020 - 11:44

      Good to know. I’ve contacted the agent re the discrepancy between his price guide and the bank’s valuation. I’ll report back

  • HeWhoKnows on 24/01/2020 - 11:12
    +1

    Commissions should always be structured to reward agents for exceeding the target price and to get a significant reduction or no commission if below the target range.
    Based on banks valuation anything below $900K gets ZERO commission.

    • Bellpop on 24/01/2020 - 11:45

      Omg this is an amazing idea! Currently there is no motivation to get the best price for the seller. The difference in commission is nothing… especially if it takes a couple of weeks then they’re essentially losing money per day they’re taking calls, open houses etc

  • elgrande on 24/01/2020 - 11:15

    Currently signed on with a real estate agent after a recommendation from a friend.

    This should happen only after you are comfortable with their marketing strategy and valuation.

    • Bellpop on 24/01/2020 - 11:46

      We were tired. Gonna pressure him today to either step up or release from contract.

  • xylarr on 24/01/2020 - 15:20
    +1

    Couldn't it be borderline illegal to quote so low? Especially if going to auction.

    • Bellpop on 24/01/2020 - 15:47

      Yeah I’ve heard that. I also think it’s counterproductive…

  • try2bhelpful on 24/01/2020 - 16:09

    Quite a few years ago we put our place up for auction and the real estate agent said they had an offer for $120,000. My other half, and I, were discussing whether we should consider it. The agent said “this is where you ask me what I think” and he said “hold out for the auction”. We finally sold for $134,000. Sometimes they aren’t in it for the quick sale.

    • Bellpop on 24/01/2020 - 16:13
      +4

      I gave the REA a big serve on the phone today. He assured me he’s in it to get me the best price, but as the poll shows above, whether or not people believe that is another thing.

      The REA actually threw the bank under the bus saying they’re untrustworthy, I quickly reminded him that between banks, REAs and used car salesman it’s a pretty tight race to the bottom of trust

      • try2bhelpful on 24/01/2020 - 17:15

        Very true dat. Let’s add in politicians and a fair whack of the CEOs.

  • 1bug on 24/01/2020 - 17:38
    +1

    As the old saying goes: "If a person will lie for me, they will lie to me," so don't trust a liar.

    As quoted in 10 worst lies real estate agents tell home-sellers (refer to Lie #8)
    https://jenman.com.au/the-10-worst-lies-real-estate-agents-t…

    Neil Jenman is a real estate consumer crusader and has been campaigning for ethics in real estate for decades.
    Another relevant real estate article from Neil Jenman…

    Bait Prices Help Agents – Not You!
    https://jenman.com.au/bait-prices-help-agents-not-you/

    Free Books:
    https://jenman.com.au/free-books

    Given you already signed on with this particular agent, if you don't get a reasonable price for your house, don't let them pressure you to sell at a lower price (intense pressure on sellers is one of their tactics to close the sale and get paid). If it doesn't sell, wait for the contract to expire, then go to Jenman Support for advice:
    https://jenman.com.au/

    PS. I used a Jenman Approved agent to sell my last home (about 10 years ago), and highly recommend the real estate news, articles and alerts published by the Jenman Group.

  • lainey13 on 24/01/2020 - 19:20

    The problem is everyone else is playing the same game. Buyers know agents constantly list low, so automatically add more to the price guide as an indication of what the seller is really angling for. Quoting a price guide that has a max 50k lower than the seller is actually prepared to accept is quite normal.

    • Bellpop on 24/01/2020 - 19:29

      Ok so the bank has valued the house at 1.05 but we would take 950k as a minimum. What would you set the ‘price guide’ at?

      • lainey13 on 24/01/2020 - 21:11
        +1

        900-990 if u are fair.
        850-930 if u play the game.

        • Bellpop on 25/01/2020 - 14:05

          Look tbh I just want to sell the house in the most effective way. I honestly think underquoting attracts the wrong buyers and discouraged those with bigger budgets who want to get a good price on a more ‘quality’ home.

          FWIW everything has been renovated and it’s a pretty sweet looking house.

    • xylarr on 25/01/2020 - 07:43
      +1

      Yet if I'm selling my car, I quote high, and sell at a lower price. Why are houses special?

  • shortblack9 on 24/01/2020 - 20:22
    +1

    Had the same deal happen when my parents tried to sell their home. We insisted on a reserve price that was not negotiable. Agent was pissed at the family for not selling below reserve and tried to pressure my parents and then myself into selling. Thanks Mr Hooker.

    • Bellpop on 25/01/2020 - 14:03

      Yeah, I could see that happening especially if I hadn’t put the hard word on him about not willing to sell under 950k.

  • R-Man on 25/01/2020 - 12:17
    +1

    the commission price changed by very little. Seems there’s not much incentive for him to get the best price for us

    You nailed it mate, your $200k loss ain't much for them but it allows them to have an easier sell. They're scum.

    • Bellpop on 25/01/2020 - 14:02

      Haha I broached this with the agent. He claimed he’s not motivated by getting paid… hmmm clearly that’s a lie.

  • Scythic on 25/01/2020 - 12:23

    In my experience, always get at least two different evaluations from different banks.
    CBA gave me a high estimate while ANZ gave me a much lower one. Both were "High confident" :x

  • Typical16-bitEnjoyer on 25/01/2020 - 16:33
    +1

    Agents want a quick easy sale. Simple as that.

    I'm curious why your bank performed a valuation. That generally doesn't happen.

    • Bellpop on 25/01/2020 - 17:13

      Not sure. The valuation had the valuer come to the house too

      • szicu29 on 25/01/2020 - 18:22

        I work for a bank. Do you know if the valuer was actually from the bank. Some banks request and pay for a valuation through third-party independent valuation firms, while some banks hire their own valuers. Valuations generally come back at a very conservative price compared to the actual market value.

        • Bellpop on 25/01/2020 - 18:33

          I asked him if he was internal or externally sources, he showed me the NAB logo on his shirt. Definitely an NAB employee.

  • meowmeowmeow on 25/01/2020 - 16:39

    There's usually a cooling off period for the real estate contract if you want to use someone else.

    • Bellpop on 25/01/2020 - 17:13

      Got a meeting with another one on Monday.

  • tessel on 25/01/2020 - 16:46
    +5

    Sell it yourself? Cut out the middleman. You'll get only serious and genuine people enquiring, not the usual shit RE agents bring through. RE agent told my mother needed to sell house for 20% less than what she got. She sold it herself and she was 70 at the time.

    • Bellpop on 25/01/2020 - 17:13

      Haha love it!

  • Zonty on 26/01/2020 - 01:04

    Reserve determine by seller so you should not drop price then market value. Some greedy agents will try this because if you put low price then agen will get maximum inspection( because under price) and they keep those data in their system to sale other properties. Also they will try to scare you By saying this is buyer market and need keep low price so he can rid off property without work on it. Make sure check realestate sold similar properties around your area and do not drop reserve price otherwise you will loose big.

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