Finding the hidden value with your agent
Get insights into our local property market with real estate expert Wayne Maguire.
OPINION: Consider this the start of a lot of real estate listing conversations: ‘‘Hi, can you come and tell mewhat my home’s worth?’’.
The relationship starts on the basis of the salesperson being regarded as some sort of valuer.
A vendormay then decide to sell with a particular agent based on how much the salesperson guesses the property is worth (or that they can get for it), their past track record, and confidence in their ability to run a campaign and sell it.
In trying to work out which salesperson to use, the owner often doesn’t ascertain their hidden value.
What do I mean by hidden value? Chiefly, can they get you more dollars for your home than the next salesperson? Consider this: The advertising and marketing strategy across agencies is basically the same. Some will hateme for saying that: the same websites, same publications, same quality of photos, same videos, and so on. So it’s fair to say exposure and reach is similar. Generally speaking
you’ll get the same interested parties coming to see the property.
However, the point of difference is this: can the salesperson engage with buyers and hold on to their interest on your property? Second, how good are they at negotiating to get you more? Welcome to the hidden value of your salesperson.
The inexplicable actions of vendors (saving pennies) and favouring the weak negotiator – an agent that drops their own fee – must surely ring alarm bells?
If you’re still with me, you’ll know where I amgoing with this. Who would choose a salesperson who can’t even negotiate their
own pay? Favouring the person who drops their own fee so quickly begs the question: how quick will they drop your side of the negotiation when they are dealingwith a buyer? This could mean lost money in the sale – this is untapped money. Wouldn’t it be better to choose the salesperson who demonstrates that their normal fee delivers value?
To reiterate, the important point is this: the marketing is similar (very similar); the buyers will be the same people; but the make-or-break difference is the salesperson’s ability to engage with them, retain them and negotiate effectively.
So next time you’re selling, question those who swiftly drop their own fee. Their eagerness to do so is potentially going to cost you much more than the perceived saving in dollars. If they adopt a discount attitude they will likely take that into the negotiation with the buyer for your home, and that’s not OK.
In general terms the real estate agent commission is plus or minus 3% of your sale price. It astounds me that people employ the salesperson who reduces the 3% and by default is surely not the same person who can grow your 97%.
If you are buying here are three tips on negotiation:
First, adding negative comments about the vendor’s home will not make your offer look more attractive. If there are issues with the property or location, the vendor usually knows it. It isn’t news to them. That is possibly why they are selling. Instead be positive with the words youwrap the offer in.
Second, don’t trade or debate comparable sales. I can’t remember a negotiation where every low comparable sale used to justify a buy price wasn’t offset by an equally higher comparable sale the seller uses to justify their asking position. As two parties trying to do a deal, who sold or bought what isn’t relevant to your deal. Third, if you’re going to buy at auction (and the best properties go to auction), do your homework and go and see how auctions run. Each company conduct them quite differently.
Our auction house does ours the polar opposite of most companies. I call and personally negotiate hundreds of auctions each year and I’m astounded at the buyers whose first-ever auction property experience is at the one they have set their hearts on buying.
Talk about not doing your homework. So go and see how they work. Reduce the pressure on yourself by knowing what to expect.
I hope that whether buying or selling you’ve found some value in my thoughts. My observations come frommore than 20 years as an agent. I’m passionate about negotiating and love sharing my thoughts on real estate. I’m always here to help and happy to chat further over a coffee.
Wayne Maguire is the chief executive of Maguire& Associates, which owns several Ray White branches across East Auckland, and he is an award-winning auctioneer. Maguire calls about 400 auctions each year, negotiating and closing about $20m in sales every week. He is Ray White Auctioneer of the Year and dad to five girls.