When selling their home, most people compare real estate agents in an attempt to find the ‘local area expert’. Unfortunately, most people simply don’t realise why this won’t necessarily help them achieve the best, or even a great result. Despite knowing their local areas well, most real estate agents leave their clients tens of thousands of dollars out of pocket.
Becoming The ‘Local Area Expert’ is Not a Choice
Real estate agents don’t become local area experts because they want to. They do so because they have no other choice. When they have to conduct between three to five open homes every weekend, it becomes nearly impossible to cover distances of up to 20, 30, 40 kilometres or more between each home. They are constrained by the fact that they insist on holding the open homes themselves.
Not only are open homes a terrible way to display a home for sale, they are also the easiest component of the marketing mix. Real estate agents are forced to concentrate on their local geographic area, because the outdated methods of their industry leave them no choice. Naturally, they have tried to turn this negative into a positive by pitching themselves as the local experts in their area.
An Active Agent is Not Necessarily a Good Agent
When people compare real estate agents after they have decided to sell, they often choose one with the most signs in front of other homes in the area. Some of those signs may have been there for a long time, because of a poor campaign. Other signs may have a sold sticker on them, but this won’t tell you how long it took to sell or whether the owners were happy with the sale price. Unless you ask the owner, you won’t know if the agent conditioned them down in price from the day the property was listed.
If you see a real estate agent active in your area, it doesn’t necessarily mean that they are experts or even any good, but simply that they have a narrower focus on a well-defined territory. Without asking the owners of the homes they have listed, if they were happy with the agent or the price they achieved, you are simply assuming that the active agent must be a good one.
Knowing Local Prices Is Very Different to Achieving Them
A real estate agent who claims to be a local area expert will say that they know the market better than anybody else. This may be true, but it does not mean that they will achieve the best price for you. Simply knowing the recent local sale prices has little to do with achieving the highest sale price. Very few people are aware of this when they compare real estate agents.
As I wrote earlier, no commission has ever incentivised a real estate agent to achieve the highest price for your home. In most cases, agents want to close the sale as soon as possible to pocket the commission, which doesn’t change much with each $10,000 you make or lose. How the value of a home is presented or pitched to the market is often far more important than knowing the home’s value. Besides, knowing local prices is only part of one of the five elements of a successful marketing campaign, next to Preparation, Presentation, Promotion and Negotiation.
Sale Price Deception to Win The Listing
Knowing local prices well, also won’t stop many agents from quoting you an inflated value in order to win your business. When they compare real estate agents, many home owners will likely choose someone who is going to promise them the highest sale price. Agents know this and so they make exaggerated promises and predictions. What good is it for a local agent to know the market, if they deceive you with an unrealistically high price, before underselling to secure a quick commission?
Case Studies and Success Stories
We recently assisted a client in the sale of their home in a suburb we did not know much about. Even though it was a suburb of the same city of Brisbane where we live, it may as well have been a suburb of Melbourne or Sydney as far as we were concerned. After about 3-4 hours of thorough research of the area, we knew enough about it to be able to narrow down the price range to within an acceptably tight band.
There are a variety of tools available for this job, some of which are free like Realestate.com.au, and others which require a subscription, such as RPData or Price Finder. With the combined help of these tools, it is possible to find out enough about the dynamics and values in any suburb in Australia.
With the added help of other tools such as Google Maps, it is possible to identify the different pockets in each suburb, which are either more or less desirable and have higher or lower values. These valuable tools are more than enough to develop a good knowledge of any suburb, or even pockets within a suburb, without having to live in it. The information gained in this way is more than enough to support a successful marketing campaign that achieves the highest possible price for a home in any area.
Once we knew the price band in which we could expect offers to be received, it was a matter of conducting the important elements of the marketing mix, which make up 95% of the entire campaign. Part of this was how to strategically communicate the price zone, which is far more important than knowing exactly what the property is worth or how much it will sell for.
Together with the other parts of the marketing campaign, communicating the price zone in a tactical way generated strong, qualified interest in the property, without either misguiding potential buyers or putting a cap on what an emotional buyer would pay. It turned out that the property sold for a record price for its category in the area, which was more than what both the owner and I were expecting it to fetch.
Another example was our very first interstate client who was selling her home in a suburb of Adelaide. Before she asked us to assist with the marketing, we had no idea that this suburb had even existed. Of course, this was totally irrelevant, because after 3-4 hours of thorough research we were able to establish a reasonably tight price band within which the property was expected to sell.
Thanks to proven negotiation strategies and techniques, this client was able to achieve a sale price that was towards the top of this price band while saving them over $12,000 in real estate agent commissions and marketing fees – and all this from two thousand kilometres away.
When you compare real estate agents, don’t be deceived by their knowledge of and activity in the local market. None of this has anything to do with whether they will achieve the highest sale price for you. If they charge a commission, it is likely that you will leave many tens of thousands of dollars on the table than you should.
For more information, please visit: www.revolutionaryrealestate.com.au