NEW TUNES, SAME SPOTS
Don't be treated like a dummy.
Let's face it, during a property boom, when buyers are falling over themselves in the stampede to buy, it's not hard for agents to sell real estate.
As Woody Allen once quipped, all you have to do is "show up" to be a success.
But how quickly things change. Prices are not the only thing going down these days. The number of sales are also plummeting. And less sales means less commission. In desperation, agents are now having to whistle some new tunes to attract customers.
Of course, no matter what the market, the key to success for most agents depends on their ability to find sellers because it is sellers who pay the agents their commissions.
One Sydney agent is offering a "free diamond ring valued at $5,000" to the owner of every property sold with their agency. And that's "guaranteed". Several are offering discounted commissions and free advertising. How long before we see steak-knives? Anything to sit down with homesellers in what is now the agent's game of musical chairs. There is not enough business for them all.
But few agents have changed their tune as much as Castran Gilbert. For years, the South Yarra based agency hailed the auction system as the best way to get the best price. But not any more.
Today, Castran Gilbert believes there is a better way. It's called the "Private Sealed Bid" where buyers make their best bid in private. And, of course, this leads to a better price for the sellers because, unlike typical auctions, buyers have to reveal their highest price.
"Auctions were the number one method to obtain the best price, but now there is a better and more private alternative," says the agency.
Castran Gilbert blames "changes" to the laws for the decline in "effectiveness of auctions" – and now says that "sealed bids equal higher prices". While that may be true, to pass this off as a sudden discovery is to treat sellers and buyers like dummies, something not unfamiliar to firms like Castran Gilbert. Auctions have never been the best way to get the highest price – and agents who dispute this important fact are either incompetent or dishonest.
So, really, why would a change to the law make auctions less effective? It's got nothing to do with getting the highest price for the sellers. It's got everything to do with the prime motive of many agents - more sales.
The new State laws, plus the attention given to auctions by the Federal regulators, plus the growing public awareness that auctions are an elaborate sham, plus the falling prices, have all combined to scuttle the auction system.
Without dummy bids, auctions are indeed less effective. Castran Gilbert ought to know. After all, not only did they use dummy bidders, they also had the cheek to send invoices to homesellers for the cost of planting dummy bidders in the crowd.
With all these special offers and so-called better methods, sellers and buyers still need to beware.
Agents might change their tunes, but they rarely change their spots.
Footnote: When asked for a comment last night, Dennis Gilbert said, "Neil Jenman makes derogatory comments about our firm." When asked if Jenman's comments were incorrect, Mr Gilbert replied, "No comment."
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