The case AGAINST Selling your Home by Real Estate Agent

Barry Osborne
My favourite statement in business is Einstein’s definition of Insanity “Doing the same thing over and over expecting a different result.” I believe the real estate market is in that state. They are so use to doing things one way and they don’t know how to change even though the world has changed. Selling your Home yourself is growing in the market place because of it.
What can easily happen is that an Industry can be left behind if they do not keep up with the needs of the customer. For too long now the Real Estate Industry has been setting the rules as to how things will be done. But guess what has happened in so many industries, the customers have demanded something different and either people within the industry start to change or new players enter the market and give the customers what they want.

This can be demonstrated in a number of issues that has occurred in the market place, which are:

# 1 Issue – The rise of the Buyer Agent.

A number of years back now I was renting a unit in North Sydney for my business and I wanted to move to the next level and buy a unit, so I phoned the Real Estate Agent who I was renting the present unit from and asked if they could show me some units for sale. I was only in Sydney during the week, so it was difficult to go to inspections over the weekend. The statement I got back was I should simply stay down in Sydney for the weekend, check the papers and go to the inspections. Guess what, I simply phoned the owner of my unit, asked whether he wanted to sell, and we did a deal. My agent was not impressed but as I said “I phoned you and you didn’t want to help, so don’t complain now”. So some agents have changed their ways and become Buyer Agents and chosen which side of the fence they are on.

This seems strange that agents want to spend so much money on attracting and finding buyers but do not work with them when they come knocking.

#2 Issue – The Level of Commission that is paid.

The main profession we criticise for the level of charging are the solicitors. But for some reason Real Estate Agents get away with a level of charging that we would not normally accept even from a solicitor. A solicitor by law now has to give you an estimate of time and the hourly rate required to do the job so you are aware of the costs. But here we have Real Estate Agents who get away with a charge that simply takes a percentage of your home value. This is even harder to understand because the selling of a $500K property or a $1m property is a similar job to do but the fee is totally different. The Seller gets nothing as to what the Agent is going to do for that fee except that they are going to list your property For Sale. Their fee does not include the marketing costs that is extra. The marketing is going to be at their recommendation but with no guarantees as to the results that will be achieved. At least now some agents are not asking for marketing costs which I believe is the US system.

What is the hourly rate they are charging and how many hours have be spent solely on your property? There is no focus on just your property they are selling multiple properties.

#3 Issue – Not being honest with the Vendor.

The auction system is a perfect example of this. Just the other day I was discussing auctions with a Real Estate Agent who said that in the training sessions that agents get by the franchise Groups it is stated that the Auction system is a great way of Educating or maybe even Conditioning the vendor to accept a lower price than they want. This occurs due to the inspections prior to Auction they are asking everyone as to what price they think the property is worth, even though many of these people have no intention of buying. You can imagine what some would say, yet this is a clear indication of the price of the property that they take to the vendor.

How could anyone understand prices of properties when the prices are never stated on the majority of properties that are listed? It is all part of the game; keeping the customers in the dark.

The issue that really needs to be tackled is whether or not the system that is being used should stay the same or CHANGE. Every industry is constantly changing in order to survive. Just look at retailing and yet Real Estate Marketing seems to be holding onto their old ways. But what will become very evident, is that if they do not change to meet customer expectations than they will be left behind and customers will find other ways to achieve their GOAL of Selling their Home and the tools for them to do just that are already available.

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Tags: Selling your home, selling your home by agent, selling your home yourself, selling your home by Realo Estate agent