“The best agent for the buyer is the worst agent for the seller
when it comes to price.”
When sellers hire incompetent agents, buyers save thousands.
Homebuyers are amazed at how easy it is to pay less for a home. They can’t believe their luck when they see a home priced at $500,000 and the agent says the owners will accept $470,000. They think, “Wow, we would have gladly paid more than that!”
The Best Deal for the Buyers
There is nothing wrong with wanting to get the best deal when you are buying a home. What is wrong is what incompetent agents do to homesellers – they charge thousands of dollars in commissions but they under-sell the homes. They make it easy for buyers to get bargains.
To buy a bargain or pay less than you are prepared to pay, you will need to find an incompetent agent. You might not be treated well, but you will often get a lower price.
You may wonder, if agents get a percentage of the selling price, why they under-sell homes so often. The answer is simple: It requires little effort to make sales when the prices are low. Also, an extra $10,000 on the price means as little as $100 to the salesperson. “Just sell it and get the commission”, is the attitude of most typical agents. A sale means commission and no sale means no commission. It’s get the sale at any price.
The Betrayal of Sellers
One of the biggest complaints made by homesellers is that agents seem to work for the buyers instead of the sellers. When it comes to respecting the privacy of the sellers, some agents are more than incompetent, they are negligent. Incompetent agents betray sellers.
The first thing buyers notice about incompetent agents is how they speak about the sellers and their homes. One buyer explained it simply when she said, “The agents are such blabber mouths.”
These agents will openly state that a home is “over-priced” or that the seller is “unrealistic”. Many an agent has been caught by a homeseller who has sent a friend to enquire about their home. When the sellers discover how the agents talk ‘behind their backs’, they are furious.
And the buyers are amazed. Many buy cheaply, but they would never choose the same agent when they sell. They cannot respect agents who betray sellers.
Questions Which Reduce the Price
If you want to reduce a price, you can start by asking an incompetent agent just four questions.
1. “Why are they asking this price?”
You don’t have to say anything else. This question immediately puts the agent in the position of having to defend the price. And, if the agent is concerned about the price – as most of them are – you will often be given a reduction. The response is likely to be, “Well, it’s a bit dear, I know. But they will listen to offers.”
You can use this question for any product. It doesn’t have to be real estate. No matter what you want to buy, you can ask the reason for the price. It works in dress shops, it works in hotels, it works everywhere. All you say is, “Why are you asking this price?” And, if there is any chance of a reduction, you will get it.
Incompetent agents assume that a question about the price means the price is too high. As most agents want to lower the price to make a sale, they will admit that the price is high. They will try to get it cheaper for you. They won’t realise that you may buy at the price being asked. Buyers often say the reason they didn’t pay more for a home is that “the agent didn’t ask for more.”
However, the best agents answer this question by saying: “They are asking this price because… [points out the positive features – location, condition and so on].” End of answer.
2. “Why are they selling?”
This is where incompetent agents reveal the sellers’ confidential reason for selling. The answer will be something like, “Oh, they are getting divorced,” or “They are in a bit of financial trouble,” or “They have bought something else and they need to sell this to pay for the other place.”
It almost defies belief that a professional person could reveal such details. When you know that the sellers are forced to sell, who can blame you for offering a lower price?
The best agents answer this question by saying: “They are selling for personal reasons but I know they are serious.” End of answer.
3. “How long has it been For Sale?”
The longer a home has been for sale, the more likely it is to sell for a lower price. The perception is that the owners will be getting desperate and will accept a low offer. Often this is true. The incompetent agent will answer this question by saying something like, “Oh, it’s been on the market for a while but they will listen to offers now.” The seller is again vulnerable to a low offer.
The best agents will answer this question by saying, “It has been for sale for six weeks (or however long) but we don’t expect it to be for sale much longer.” The seller is protected.
4. “What will they take?”
Assume the home is priced at $250,000. One of the most common responses goes something like this: “Oh, they did have an offer of $230,000 which they accepted, but the buyers found something else, so I know you can get it for $230,000.”
If the home is what you want and you can afford $250,000, the agent has just handed you at least $20,000 of the sellers’ money.
Incompetent agents always reveal the sellers’ lowest price in response to the “What will they take?” question.
The best agents will answer this question by saying: “Well, I know they will take the asking price. Did you want to buy it?”
These four questions show how incompetent agents under-sell homes. As a buyer, you can ask many more questions. Agents will keep giving you information which helps you.
The above is an extract from the book Real Estate Mistakes.