There has been a lot of talk lately about the tendency for many agents to offer their clients a briefcase full of ‘no price’ marketing options. But an ‘easy fit’ is not always an easy sale. Haesley Cush gives his opinion.
There has been a lot of talk about the recent focus of many Australian agents to offer their clients a briefcase full of ‘no price’ marketing options. In an industry where we are generally treated with an air of caution, it is easy to be easy and hard to be hard.
As I look back over my time as an agent I recall many experiences with owners. I think back to the mid-1990s, the start of my career: a time when the market was tough, some owners were selling for less than they paid, and asking an owner for advertising money was greeted with ‘Jaws’ background music. Homeowners generally saw auctions in Queensland as tools for the desperate, financially stressed or deceased! So when doing listing presentations in a stranger’s lounge room, kids put to bed and serious faces staring at me looking for ‘my angle’, I remember swallowing my integrity and discussing ‘sale by negotiation’ marketing.
It was just like an auction except without all the cost, the process and the public negotiation. This, of course, meant it was nothing like an auction! The result was usually lacklustre. The process irritated buyers, the sellers had no gauge of feedback and the effort from the agent was not formatted towards result. At least with ‘private treaty’ you knew what people wouldn’t pay (maybe!). So I learnt the hard way that to be a sales professional you needed to have a sales strategy. You needed to show sellers your plan. When greeted with ‘new’ clients it was important not to stay strangers but to build a rapport, so they would accept your advice as correct and professional.
Once I’d decided on a strategy, I found that when a client questioned my advice I no longer buckled like cheap camping furniture; I provided facts and experiences to support my recommendation. Obviously not everyone came on the journey; some went elsewhere, while with others we worked together to tailor a suitable strategy. Real estate is not a ‘one size fits all’. But what is starting to emerge is an ‘easy fit’, so an ‘easy sale’. This is seeing the inexperienced, lazy or under-skilled agents listing properties by providing the path of least resistance.
Auctions can be a hard sell; this is largely fuelled by the media continuing to use the easy target of sales under the hammer. Vendors are quick to quote the weekend’s clearance rates, yet pay no attention to the weathered ‘for sale’ sign on their fence. “Only 60 per cent cleared on Saturday”, they say, or worse, “Only 35 per cent cleared in Brisbane on the weekend”. You rarely hear, “The average days on market for properties with a price is well over 120 days”, or “There’s a comparable five per cent clearance rate of properties listed with a price in 30 days”. The agents who have done their time at front doors, in lounge rooms and on the footpath know the story, but retelling it can get monotonous. The weight of the negative press, the struggle to get good stock and the competition are all factors when agents utter the words “There is another option…”
This ‘sale by negotiation’ or ‘forthcoming auction’ or ‘just make us an offer at a price please!’ has been around since the days of dirt roads and radios. It generally surfaces when market prices and vendor expectations have drifted. The problem that arises, as those agents will inevitably realise, is that an auction is more than just ‘no price’. It’s a detailed process of buyer and seller education. It involves specific marketing, extensive service programs and the skill of a professional negotiator; the creation of an environment designed to push human emotions to their extreme and to optimise a seller’s sale price: a public auction.
There will always be cases where “I had a client once who got more by this method”, or “I had a mate who got a higher offer before auction”. But when you eliminate the one per cents and look at the industry, the experienced agents will agree that an auction campaign, run correctly, is always the best option for a motivated seller. The case against auctions is easy to argue when you look at the unsuccessful sales, don’t compare them to the other options and don’t involve the successful ones. But that’s hardly a convincing case.
