There has been a lot of talk lately about the tendency for many agents to offer their clients a briefcase full of โno priceโ marketing options. But an โeasy fitโ 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 โno priceโ 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 asย 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 โJawsโ background music. Homeowners generally saw auctions in Queensland as tools for the desperate, financially stressed or deceased! So when doing listing presentations in a strangerโs lounge room, kids put to bed and serious faces staring at me looking for โmy angleโ, I remember swallowing my integrity and discussing โsale by negotiationโ 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 likeย 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 โprivate treatyโ you knew what people wouldnโt 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 โnewโ clients it was important not to stay strangers but to build a rapport, so they would accept your advice as correct and professional.
Once Iโd 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. Obviouslyย not everyone came on the journey; some went elsewhere, while with others we worked together to tailorย a suitable strategy. Real estate is not a โone size fits allโ. But what is starting to emerge is an โeasy fitโ,ย so an โeasy saleโ. 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; thisย is largely fuelled by the media continuing to use the easy target of sales under the hammer. Vendors are quick to quote the weekendโs clearance rates, yet pay no attention to the weathered โfor saleโ signย on their fence. โOnly 60 per cent cleared on Saturdayโ, they say, or worse, โOnly 35 per cent clearedย in Brisbane on the weekendโ. You rarely hear, โThe average days on market for properties with a priceย is well over 120 daysโ, or โThereโs a comparable five per cent clearance rate of properties listed with a price in 30 daysโ. 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 โThere is another option…โ
This โsale by negotiationโ or โforthcoming auctionโ or โjust make us an offer at a price please!โ has been around since the days ofย 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, isย that an auction is more than just โno priceโ. Itโs a detailed processย 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 sellerโs sale price: a public auction.
There will always be cases where โI had a client once who got more by this methodโ, or โI had a mate who got a higher offer before auctionโ. But when you eliminate the one per cents and look atย 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, donโt compare them to the other options and donโt involve the successful ones. But thatโs hardly a convincing case.
Haesley Cush is a licensed Real Estate Agent and Auctioneer. Haesley began his real estate career in March 1996, with Ray White Moorooka. Since this time Haesley has operated in all areas of the residential real estate industry. Haesley will be speaking at The Ideas Exchange in May 2013.ย