Agent’s tricks, traps, and tactics…

Agent’s tricks, traps, and tactics used to increase vendor motivation

If a vendor has excessive price expectations, agents have several tricks to bring the vendor’s hopes back into line with market reality. The fact the hopeful owner’s inflated price expectations were borne from the agent’s original appraisal is a mute point at this stage of the selling process. Some of these tactics are subtle, others are more transparent. Either way, when you know what they are, you stand some chance of protecting yourself from being played.

Lowball pre-auction offer
If you are expecting a huge price on auction day, an offer well below the expected reserve price often arises the week before before the auction. The agent does not expect the offer to be accepted, it’s more a case of softening the owner up. The agent wants the vendor to second, guess their price expectations and be grateful when the auction day bid exceeds the bargain hunters pre-auction offer.

Move the tenants out
The more financially committed the vendor is during the campaign, the more likely they will accept the highest bid on the day. Encouraging the tenants out in the name of an ‘improved presentation’ increasing the vendors financial exposure to the campaign. Deadline Sellers are often encouraged to auction as the deadline apparently pressures buyers to act. As the deadline
(auction) draws closer, the pressure of the situation subtly shifts from the buyers towards the seller. The buyer can wait for the next property whilst the owner is publicly on the chopping block on auction day. Don’t let a reported clearance rate of 80% fool you into a false sense of security. Many properties are withdrawn and/or fail to sell at auction, so the ‘result’ conveniently goes unreported. Furthermore, the agent clearing a property and the Vendors achieving the best possible price are at separate outcomes.

Hire furniture in
When the owner hires designer furniture for 6 weeks, it creates both an expense and a deadline for the vendor.

Upselling advertising
Agents are addicted to VPA – which stands for Vendor Paid Advertising. Agents often encourage each other in training courses that upfront VPA ensures they get a committed vendor from the start. VPA comes in many forms. In the past it was full-page newspaper ads, then it was real estate magazines & flyers and now the latest craze is ‘premium package’ internet campaigns. If an agent believes in these advertising methods, ask the agent to carry the cost and risk of the strategy. You may find the agent can quickly deliver a buyer without either of you having to commit to a massive upfront expenditure.

The greatest losses often occur at the time of greatest gains. It’s a reality that vendors are resilient and careful when the market is flat yet more relaxed and amenable to expenditure in booming markets. If you stay resilient and careful in a booming market, you are assured of the best possible net result. sets in. By this time of year, the market has usually found its level and can be a high transaction period as there is a fairly good understanding for buyers and sellers as to where the market price is.

Winter Market
Stock levels are low during winter. Admittedly many properties don’t present their best in winter. However, winter should not be instantly dismissed as a poor season to sell. Stock levels tend to reduce significantly more than demand does during winter, creating clear advantages to winter property sellers.

Spring Market
Spring is by far the most overrated time of year to sell. Even during boom years, there are clear examples where the clearance rates softened as excess stock on the market clashes with diluted buyer demand. A great strategy can be to sell in winter with a long settlement and buy in spring when listing numbers are at their highest.

Pre – Christmas Market
Each year the excess stock levels from the spring begins to subside by early to mid-November. This creates a savvy selling opportunity for the unsold stock from earlier in the year, and/or those who suddenly decide to sell pre- Christmas. The unexpected interest rate increase in November 2023 created a last-minute surge of pre-Christmas listings and was likely a contributing factor to the abnormally high listing numbers in January 2024. It surprises most people how many transactions are completed in late November and December, many ‘off-market’.

“Economics trump seasons when it comes to
deciding upon the best time of year to sell.”

If the market is rising, you can afford to be patient and relaxed about the timing of the sale. When the market is falling, waiting for a better season may not be your best option. It’s the classic ‘market conditions’ vs ‘selling season’ conundrum?