Agent's Tricks, Traps, and Tactics Used to Increase Vendor Motivation

If a vendor has excessive price expectations, agents have a number of tricks to bring the vendor’s hopes back into line with market reality. The fact the hopeful owner’s inflated price expectations were borne from the agent’s original appraisal is a mute point at this stage of the selling process.

Some of these tactics are subtle, others are more transparent. Either way, when you know what they are, you stand some chance of protecting yourself from being played.

Low ball pre-auction offer

If you are expecting a huge price on auction day, an offer well below the expected reserve price often arises the week before before the auction. The agent does not expect the offer to be accepted, it’s more a case of softening the owner up. The agent wants the vendor to second guess their price expectations and be grateful when the auction day bid exceeds the bargain hunters pre-auction offer.

Move the renters out

The more financially committed the vendor is during the campaign, the more likely they will accept the highest bid on the day. Encouraging the renters out in the name of an ‘improved presentation’ increasing the vendors financial exposure to the campaign. Sometimes this is necessary to increase the value if the renters presentation is extremely poor.

Deadline

Sellers are often encouraged to auction as the deadline apparently pressures buyers to act. As the deadline (auction) draws closer, the pressure of the situation subtly shifts from the buyers towards the seller. The buyer can wait for the next property whilst the owner is publicly on the chopping block on auction day. Don’t let a reported clearance rate of 70% fool you into a false sense of security.

Many properties are withdrawn and/or fail to sell at auction, so the ‘result’ conveniently goes unreported. Furthermore the agent clearing a property and the vendor achieving the best possible price are separate outcomes.

Hire furniture in

When the owner hires designer furniture for 6-8 weeks, it creates both an expense and a deadline for the vendor. A staged property can be a much easier sell than an empty property, because buyers buy on the feeling they get when they first walk through your home, however be mindful when agents ask you to move out your own furniture.

Upselling advertising

Agents are addicted to VPA – that stands for Vendor Paid Advertising. Agents often encourage each other in training courses that upfront VPA ensures they get a committed vendor from the start. VPA comes in many forms. In the past it was full page newspaper ads, then it was real estate magazines and flyers, and now the latest craze is ‘premium package’ internet campaigns.

If an agent really believes in these advertising methods, ask the agent to carry the cost and risk of the strategy. You may find the agent can quickly deliver a buyer without either of you having to commit to a massive upfront expenditure.

The greatest losses often occur at the time of greatest gains. It’s a reality that vendors are resilient and careful when the market is flat yet more relaxed and amenable to expenditure in booming markets.

If you stay resilient and level-headed in any market, you are assured of the best possible net result.