Truth: If all you wanted was a sale you could do that yourself!
Think about that. You could put a sign out the front of your home and some ads in the paper and there would be some buyers that would call you and you could sell your home yourself. The reason you would employ a salesperson to sell your home is because a good salesperson WILL sell your home for more money than you are likely to be able to achieve yourself.
The reason for this is that a third party negotiator will get more information and feedback from a potential buyer than you could get yourself and is therefore in a better position to negotiate with that buyer. HOWEVER, in many instances sellers employ a salesperson whose only skill is in introducing buyers to properties. If the buyer likes the property they make an offer at a price they would like to buy it for and then the seller comes back at a price they would like to sell it for and so forth until a price is agreed upon. This is fine if all you wanted was a sale however this is a process of concession and more often than not results in a sale price that is more a reflection of what the owner was prepared to accept not necessarily what the buyer was prepared to pay.
This is not negotiating. It is simply carrying out the legwork of running backwards and forwards to get contracts signed and you could hire a courier or pay someone by the hour to do this. A skilled salesperson will never have a buyer walking away from your property saying they would pay more money! This is not about holding a buyer at gunpoint as both parties need to benefit from the transaction, but it is about knowing that when you have sold you have achieved the best possible price.
Lesson: You should be employing a salesperson for their ability to get you more money for your home not just for their time.
Truth: Not all salespeople are the same.
Do you think there is a difference between a good and a poor builder, lawyer or chef? Of course there is. And would you pay more money for a better one of any of these professionals? Absolutely! Similarly there is an enormous difference between a great and a poor real estate agent (company), and salespeople.
Truth: Every property has a reasonable price range that it could potentially sell in and a better salesperson will consistently negotiate prices in the higher end of that range.
Example: On a $400,000 property, that range may be as much as $40,000, even more on a more expensive home. Just take a moment to think about that. The difference to you between getting the right person on board to sell your home and the wrong person may be as much as $40,000. Even conservatively, let’s say $10,000 to $20,000. That’s still a house full of furniture, a nice car, a family holiday or a significant mortgage payment on your next home. I call that an expensive mistake if you have the wrong person working for you!
The question is “How do you make an intelligent decision to engage a salesperson to sell your home and know that you’ve got the best person on the job?” Too often sellers make the decision to engage a salesperson to sell their home based on all the wrong criteria.
The only means by which a salesperson's performance should be measured is results. It’s as simple as that. Results don’t lie! Any salesperson can sell a house and any salesperson can even get a great result in a sale but a superior salesperson will CONSISTENTLY achieve outstanding results and this will be backed up by recommendations from the vast majority of clients that have dealt with them.
A good salesperson will:
Many potential sellers will choose a salesperson to sell their home based on convenience, a feeling of personal obligation and for other ‘gimmicky’ reasons that are convincing but really make no difference to their chance of achieving a great price. These include:
Although these seem to be good reasons it doesn’t necessarily mean they are the most qualified person for the job.
Once you’ve found a salesperson that you are comfortable with and have confidence in, STICK WITH THAT SALESPERSON UNTIL YOUR PROPERTY SELLS. Many sellers switch their salesperson if the property hasn’t sold within a short time frame, wanting to ‘give someone else a go’.
However if your original salesperson is doing everything that could possibly be done and if you are happy with their ability to negotiate, their market knowledge and ongoing enthusiasm, then there is no more that another salesperson can really offer. The reality is that some homes are just going to take that little bit longer to sell and if you keep plugging away, you will get there.
When thinking about selling your property it is important to have a reasonable idea of what price it can achieve in the current market. Many owners believe that it is the salesperson's job to tell them what their home is worth and that that opinion of price dictates what that particular salesperson can sell their property for. This belief commonly leads prospective sellers to engage a salesperson to sell their property largely based on the opinion of the price given by the salesperson. This often results in misleading opinions of value from salespeople who ‘over-quote’ to entice sellers to engage them to sell the property.
To this end a salesperson's opinion is quite often the least reliable estimation of value and should only be taken seriously when backed up by evidence of recent sales. Even then, salespeople can still be wrong.
The truth is, you could get a handful of salespeople and a couple of registered valuers to look at your home and on a $500,000 property the difference between the lowest opinion and the highest opinion could be as much as $100,000. So who’s right? No one can accurately and consistently guess values and you will never know exactly where your property sits in terms of price until you start getting the feedback of qualified buyers.
Ultimately the market determines value and the best judge of value is an active and educated buyer in the current market. You see, when a buyer sees your property they immediately compare it to perhaps a dozen or more other homes that they have inspected recently, as well as those they have seen sell. Whereas a salesperson, can only compare your home to other homes they are currently selling and they may not currently be selling anything that is similar to your property, so there is very little depth to their comparison. They may then look to past sales to get a comparison, however a sale of more than a couple of months ago is obsolete as the market changes and values are set by property that are selling TODAY!
So to get the best feel for values put yourself in the buyer’s shoes and go shopping. Be an educated seller. Go and look at homes that are currently selling your area, attend any auctions, call to get the price when you see a sold sign on a property and educate yourself. Only rely on the opinion of an agent you can trust and make sure that opinion is substantiated.
Lesson: Engage a salesperson based on their skills and abilities to negotiate the best price for you not on what they think the home is worth. Quite often the salesperson who gives the highest price is the one who is least qualified to get it and a good salesperson can easily sell your property for a price that is well in excess of what they may personally think it’s worth.
“Should we list our property with one agent or a couple of different agents?”
This is a frequently asked question and one that opens an interesting debate. It is a common belief that by listing your property with a number of different agents (real estate companies), you give the property exposure to more potential buyers and subsequently a better chance of selling. The truth is, that provided you have made a good decision in selecting a salesperson to sell your home, you will have a much better chance of achieving a premium sale result, by employing proven marketing strategies with one salesperson as opposed to having two or three or more salespeople trying to sell your home.
Reasons not to engage multiple agents:
The control of information in the negotiation of a sale is of paramount importance to achieving a premium price. With multiple agents representing your property you simply don’t know what is being said to potential buyers and how this affects the negotiation process. There is no accountability.
Buyers are looking at properties through many different agents and when a smart buyer sees a property listed with multiple agents they will choose to buy the property through the agent that will get them the best price. This makes it almost impossible for the stronger negotiator, as the buyer would rather buy through the weaker agent/salesperson. You need to have the hottest buyers dealt with by the most skilled negotiator, as a better negotiator will sell your property to the same buyer as a weaker negotiator would for more money!
Human nature dictates that a salesperson will spend the majority of their time and energy trying to sell the properties that give them the best chance of getting compensated. The probability that a salesperson will sell a property also being sold by a number of different agencies is significantly lower than if a salesperson has sole rights to sell the property. Therefore open or multi-listed properties get the least attention or priority, especially from the more skilled salesperson who will usually have plenty of sellers willing to give them sole rights to sell their home. Why would a highly skilled salesperson spend significant time trying to sell an open listed property that gives them a 25% chance of being compensated when they have many opportunities to sell properties that give them a 90% chance of compensation? The flip side of this, is that quite often the salespeople who will spend significant time trying to sell open listings are the less qualified salespeople who don’t have any exclusively listed properties and will take anything they can get. The question then is “Do you really want these salespeople representing your property?”
A multiple-agent sale process encourages competition between salespeople to sell your home. As much as many sellers think this is a positive thing, it actually works against your best interests as the saleperson is more concerned about selling your home before the other salesperson so they get paid, than they are about making sure that the property is being sold for the highest possible price.
A salesperson is in a much better position to negotiate the best price for you when they are dealing with and have control of all potential buyers. It can become very messy when you have 3 potential buyers being dealt with by 3 different salespeople, as most of the time these result in a conflict of advice when each salesperson is trying to protect their right to earn the commission on the sale.
Example: There are two salespeople that each have a potential buyer for your property. The first salesperson has just obtained an offer, while the second salesperson says he is likely to get an offer from his buyer in the next day or so. The first salesperson wants to earn a commission and doesn’t want the other salesperson's buyer to purchase the property, so he tells you that his buyers requires an answer to the offer by 5pm today or else he will withdraw the offer and buy another property. You need to sell your property and to save losing a buyer you accept the offer from the first salesperson, only to find that the buyer from the second salesperson would have paid $10,000 more. The reverse side of this situation is that the first offer is a good one that is acceptable to you however the second salesperson doesn’t want you to take it because that means he will miss out on a commission, so he tells you that his buyer is going to make a better offer in the next day or so. Because you want the best price you wait for the offer from the second salesperson to find that he never makes one and in that time, the first buyer sees another home that they like better than yours and they go and buy that one… leaving you with nothing!
These types of situations would not occur if both buyers were being dealt with by one salesperson. The truth is, if a property is marketed well, the hottest buyers in the market will go to the salesperson that is handling the sale of the property to inspect it. If you have a skilled and experienced negotiator working for you, you will achieve a better result nine times out of ten having one salesperson versus the scattered and uncontrolled manner in which the process will be handled if you use multiple salespeople.
We hope you have found this information useful and if you have any questions please don’t hesitate to call or email