7 figure Attraction Agent
Tom Panos interviews leading real estate attraction agents. These agents share their strategies for writing 7 figures year after year. Simple, powerful and effective - you can apply these tips to grow your real estate business today. For more FREE tools visit: www.tompanos.com.au
7 figure Attraction Agent
The Solution to Underquoting: Transparent Agency Agreements
Live from Japan. A family member I know has put their home up for auction. By week two, they had three qualified buyers, but by week four, they'd lost all their buyers.
You see, a property nearby had also come onto the market and their agent quoted significantly lower despite the homes being comparable.
This happens all the time. And the solution to prevent this is not so simple...
Today I want to talk to you very briefly about a subject that involves a family relative of mine who was auctioning their property in May had three buyers by around week two. At week four is the auction, they're informed hey, john, good to see you they're informed that they've lost all their buyers because another property only a hundred meters away has come on the market and the real estate agent on that property is quoting a lot lower figure than the number that's been quoted on this one, even though they are comparable properties. Well, hello, this is a common weekly occurrence in real estate where you actually have two similar properties up for auction, one being quoted lower than the other even though they're similar properties. And, of course, the buyers well, they get seduced by greed, as one trainer used to say, and I don't approve of it. As one trainer used to say, and I don't approve of it feed the greed, feed the greed, tell them low, quote it low, watch them go. In fact was another one of those one-liners that were used 10, 20, 30 years ago in auction circles. That still is used now.
Speaker 1:So here's the big dilemma. Here's the big dilemma. The big dilemma is that, if you look at the contractual relationship that a real estate agent has. It is hey Tass, hey John. It is in fact with a vendor. They're employed by their vendor and paid a fee by their vendor and sign a contract, an agency agreement by the vendor to represent them and look after their best interests, which obviously involves getting them the highest price for the property that's available in the marketplace. And if you're going to do that, what you want to do is go out and engage and collect as many bidders as possible. If it's an auction property, now obviously going out there with a buyer excite price is going to attract a lot more people than going out with a price that's not exciting.
Speaker 1:So here lies the dilemma. On the one hand, a real estate agent has got to actually go off and excite buyers because their job is to get the vendor the highest price, and to do that in many parts of Australia you'd be acting marginally, if not more than marginally, illegally off. That doesn't follow the law can end up stuffing it up for a vendor who is listed with an agent who's actually doing the thing within the law. And I've got to tell you I absolutely despise and hate buyers being deceived. Despise and hate buyers being deceived. I also understand that real estate agents are engaged by a vendor to get them the best price. So where do you stand there? Does it mean that auction laws across Australia should head down the path of Queensland, where it's a lot easier to actually quote no figure?
Speaker 1:You've heard me say it before here on Market Raps that I believe that one possible solution is to make it law that a real estate agent actually has the agency agreement and the comparable sales they've shown the vendor when they've appraised and listed the property and that is made available to buyers as they inspect properties and, you know, go off and do their due diligence. Have one story. Have one story. Show the buyers what the agent has shown the vendors. Make the agency agreement a transparent document.
Speaker 1:What's wrong with that? I'm sure that the devil's in the detail, but in many ways I'm changing my mind about price quoting because I've always thought you do really need to give people a figure. I wouldn't like walking around David Jones and everything I look at has no price on it. I'd walk away as a customer, as a consumer, and go find a store that I can actually look at an item and see what it costs actually look at an item and see what it costs and that is what I think buyers like. However, it's causing so many issues. We need to find a solution to that.
Speaker 1:As for the real estate marketplace, I've got to tell you so much of the world in real estate appears the perception to be around auction. The reality is private treaty properties across Australia and New Zealand totally outstrip the amount of properties that go to auction. Auction obviously a lot more colourful, a lot more media friendly and they do grab the attention of the community. And we've got a barometer called an auction clearance rate that allows people to actually compare apples to apples, one week versus another week and markets versus other markets. Anyway, team, I'm going to finish this off. We're on our way to get as close as possible to Mount Fuji in Japan.
Speaker 1:Then I'm heading back to Tokyo tonight and I've got to say to you those of you that are going to ARIC, looking forward to seeing you to come over and collect your million dollar agent roadmap, which I've printed quite a few thousand from my real estate gym members, but I'm also bringing extras along to the ARIC event. Come over to my booth. It's booth number one, the first one you'll see as you walk in. Ladies and gentlemen, I'm looking forward to seeing you at ARIC. I'm also letting you know that it's so good to be spending time with family. Faith, family and friends is the ultimate formula for happiness, and that's what I'm doing these six days.