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Some of the Most Common Mistakes – and Solutions
One of the most common mistakes made by sellers is believeing the price the agent quotes for the sale of their home.
Once you sign up with an agent, if the selling price is less than the price you were quoted, too bad. There is nothing in the “standard” real estate agreements that compels agents to honour their quotes.
The ‘Quote Trap’ catches thousands of sellers who are told one price before they sign up and another price after they have signed up.
As absurd as it seems, if a home sells for any price, the agent still gets paid.
Insist on a written quote guarantee, just as you would with any business. You should only pay the agent if you get the price you more quoted – or more. Don’t accept any excuses about “the market”. Granted, no one can know exactly what any home will sell for; but the agent can give you a price range – from a low point to a high point – and if your home sells below the lowest point of the price range, do not pay the agent.
An agent who is telling the truth about the price of your home will have no qualms about giving you a written commitment that the words you hear are the truth.
Auctions are the real estate industry’s greatest fraud. Thousands of consumers are being cheated.
The greatest myth with auctions is that they are “the best way to sell”. This is not true. Auctions are one of the worst ways to sell your home, no matter what area you are in or no matter what the market conditions are like. AUCTIONS GET LOWER PRICES.
Agents are the big winners with auctions. Consumers are the big losers, because they are so easily caught by the deceit and the tricks. One of the greatest tricks is the “reserve” price. Agents will say that homes often sell above reserve. But the reserve is your lowest price. It is the minimum you will accept, under pressure.
Auction involves extreme pressure to sellers – “crunching” them to accept whatever price is offered at the auction. Agents are taught to use auctions to “condition sellers”. The Real Estate Institute of Australia published a book describing auctions as “the fastest and best conditioning method”.
Very few people, other than agents, understand the scale of auction fraud. As one lawyer commented, “The auction system is just one gigantic scam and everyone in the industry, other than consumers, seem to be in on it.”
The best advice is don’t auction. However, if you can’t resist the sales spiel, at least insist that you pay nothing unless your home is sold at the price you want. And do not fall for the “dummy bidding trick”. Agents may say that dummy bidding helps you get the price up. They also say it is only done below the reserve price. But if the agents started bidding at the reserve price, there would be no need for dummy bidding. The reason bidding starts below your reserve price is that many agents intend to “crunch” you under extreme pressure to lower your reserve price.
If auction agents were compelled by law to offer guarantees to consumers, the typical auction system would cease to exist. Don’t let auctions into your life.
You must never allow an agent to use a false or low price to attract buyers to your home. This highly deceptive form of selling may be sold to you as “a new way of selling” – By Negotiation, Offers Above, Price Guide, Set Sale.
The agents may say that offering a lower price “attracts more buyers”. But it attracts buyers who only want to pay a lower price. The lowest price they see is the highest price they will want to pay.
Bait pricing also does severe damage to the value of your home because it creates the impression that your home is worth less. Even buyers who could afford to pay more for your home will still want to pay the lowest price mentioned.
By using bait prices, agents commit a dreadful marketing blunder. It is a basic principle of marketing that you must market your product to buyers who can afford it. If not, you can easily be forced to sell under pressure at a lower price.
If agents cheat buyers, they will cheat sellers too. You should not even contact an agent who is using Bait Pricing. Avoid them completely.
If you want the best price for your home, the first thing you need is buyers who can afford to pay the best price for your home.