2 questions regarding RE agents

I am fascinated by the RE industry and love to gather information on it and figure how it works. I consider it my life's work. :D

Its not easy for an outsider as they keep all the tricks/secrets very much in house. Luckily i have been friends with a few over the years. With 2 leaving the industry disgusted at the duplicity and lack of ethics.

Anyway, as usual i have been thinking about agents and have come up with 2 questions. I have my own views on these but would like to throw it out for comment.

1. Why do agents continue to chase listings in a dead market (such as now in most places) when they know it adds to the over supply problem, as most listings don't sell. I know they have to pay bills as well but most listings are overpriced in the current market and just sit there for a long time.

If anyone can influence the supply/demand equation in their favor its agents.

(By the way, i read a story recently about an agent who is consistently the top seller in her state. How she does it is she qualifies the sellers much more then the buyers.

She does this by not listing any property where the vendor is not truly motivated and realistic about the selling price in the prevailing market. I'm sure she has other qualifying criteria but these are her 2 biggies.

She has less listings than almost every agent but sells more. Sounds like a rare thing in the RE industry. Someone that actually understands the dynamics of sales & marketing.)


2. We all know the 'for sale' signs out the front of properties are to promote the image of the agency as much as sell the property (actually more so)

Is there a 3rd not so obvious motivation why agents hate selling properties with out the sign out the front. And that is if anyone walks in and attempts to buy the property and circumvent the agent (deal directly with vendor) the agent can easily say that his marketing attracted the prospect and therefore is entitled to commission.

Without the sign, they would have a hard time doing that.
 
1. Why do agents continue to chase listings in a dead market (such as now in most places) when they know it adds to the over supply problem, as most listings don't sell. I know they have to pay bills as well but most listings are overpriced in the current market and just sit there for a long time.

The "oversupply problem" isn't a problem for real estate agents.

It is a problem for the vendors.

But to answer your question - the more listings an agent (or an agency) has at any point in the cycle the more they can appeal to a greater number of buyers and the greater their chances of getting a sale (and a commission) somewhere.

2. We all know the 'for sale' signs out the front of properties are to promote the image of the agency as much as sell the property (actually more so)

Is there a 3rd not so obvious motivation why agents hate selling properties with out the sign out the front. And that is if anyone walks in and attempts to buy the property and circumvent the agent (deal directly with vendor) the agent can easily say that his marketing attracted the prospect and therefore is entitled to commission.

Without the sign, they would have a hard time doing that.

My understanding is that if you sign a listing agreement to sell a property, then unless you pre-specify [by name] certain prospective buyers who are not covered by the contract, then no matter who it is sold to and how, the REA is entitled to commission (whilever that listing agreement is in place).

You could try to not pay the REA, but they'll probably sue you for commission, and probably win.
 
What confuzzles me is how they manage to sell:

- House with internet listing, window listing and no for sale sign (been for sale for over 6 months now, price has dropped once)
- House with world's smallest for sale sign, no internet listing (this one has been for sale for over a year and is now up for auction at the council chambers - different agent, much bigger sign)
- House with for sale sign that looks recycled, they didn't quite peel the old sold sign off. No internet listing, haven't seen it in the window either. No idea what the asking price is, which is annoying as it is on the same street as my PPoR and I'm curious.
- Really quite nice house that has been on the market for only a few months but the price comes down by 5% every few weeks

Hang on ... none of these have actually SOLD. They are all with the same agent - the council auction one used to be with them, and there's a rash of these council auction signs up at the moment so I think the council might be on a repossession binge. This particular agent *always* has the cheap, run-down properties and even if they get a good house they invariably put a much lower price on it. I think they might charge a really low commission or something ...
 
Hang on ... none of these have actually SOLD. They are all with the same agent - the council auction one used to be with them, and there's a rash of these council auction signs up at the moment so I think the council might be on a repossession binge. This particular agent *always* has the cheap, run-down properties and even if they get a good house they invariably put a much lower price on it. I think they might charge a really low commission or something ...

Which agency is this? sounds like someone i want to do business with haha
 
1. Why do agents continue to chase listings in a dead market (such as now in most places) when they know it adds to the over supply problem, as most listings don't sell. I know they have to pay bills as well but most listings are overpriced in the current market and just sit there for a long time.

Perception! I've had many listing enquiry calls where one of the first questions is why I only have x amount of listings. Sellers generally relate large listing numbers with success. Also if you have a listing you have a chance of selling the property, if you have no listing you have no chance. You have to play the odds and work on educating your client on market value. Simple really.

2. We all know the 'for sale' signs out the front of properties are to promote the image of the agency as much as sell the property (actually more so)

Is there a 3rd not so obvious motivation why agents hate selling properties with out the sign out the front. And that is if anyone walks in and attempts to buy the property and circumvent the agent (deal directly with vendor) the agent can easily say that his marketing attracted the prospect and therefore is entitled to commission.

Without the sign, they would have a hard time doing that.

The question is, do you want to sell your property? how do you expect to sell if people don't know its for sale. Once again pretty simple. I get a large percentage of calls from the sign alone.

As for circumventing the agent, Who's to say they didn't find out about the property from the internet. Either you want an agent to sell your property or you don't, that is the question.
 
Which agency is this? sounds like someone i want to do business with haha
They're a small agency that only works in my local area and probably will never expand further so you're safe in Sydney :p Every other (more professional) agency out here is part of a national or statewide chain, like Elders and Landmark.
 
I'll throw a question in here as well:

Why do agents take on listings in which the vendors have unrealistic expectations? Is it just on the hope they can condition them over time to bring the price down and clinch a deal?

I see so many agents list a house that (IMO) is way over market, not sell, then a few months later the property is listed with a new agent again at the same price. If I was an agent, I don't know I'd want to waste any time/effort with a vendor who's unrealistic.
 
I'll throw a question in here as well:

Why do agents take on listings in which the vendors have unrealistic expectations? Is it just on the hope they can condition them over time to bring the price down and clinch a deal?

I see so many agents list a house that (IMO) is way over market, not sell, then a few months later the property is listed with a new agent again at the same price. If I was an agent, I don't know I'd want to waste any time/effort with a vendor who's unrealistic.

as I said above
"if you have no listing you have no chance. You have to play the odds and work on educating your client on market value. Simple really."
 
Why do agents take on listings in which the vendors have unrealistic expectations?
There's one of those around here too.

It's an old heritage hospital that was converted to a B&B. It would turn over $50 every couple of months - the kind of oldish owners work elsewhere. The owners will only sell to someone who will keep it as a B&B. They've had offers from people who want a remote and beautifully renovated (for this area) 7 bedroom *house* but don't want the business, and they have turned them down.

It has been for sale for at least 5 years now I think. The price has come down, apparently, it was over $200k last time I hit the advert. Interesting that the agent has several photos of the same room from different angles instead of getting photos of the bedrooms or the kitchen, you could certainly market this property better. And of course, since it was listed the hotel down the road has changed owners, gone from a really crap pub to a good one and now offers accommodation and meals so their B&B business quite frankly is royally screwed and they'd be better off selling it just as a house.

http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=103423092
 
I am fascinated by the RE industry and love to gather information on it and figure how it works. I consider it my life's work. :D

Its not easy for an outsider as they keep all the tricks/secrets very much in house. Luckily i have been friends with a few over the years. With 2 leaving the industry disgusted at the duplicity and lack of ethics.

Anyway, as usual i have been thinking about agents and have come up with 2 questions. I have my own views on these but would like to throw it out for comment.

1. Why do agents continue to chase listings in a dead market (such as now in most places) when they know it adds to the over supply problem, as most listings don't sell. I know they have to pay bills as well but most listings are overpriced in the current market and just sit there for a long time.

If anyone can influence the supply/demand equation in their favor its agents.

(By the way, i read a story recently about an agent who is consistently the top seller in her state. How she does it is she qualifies the sellers much more then the buyers.

She does this by not listing any property where the vendor is not truly motivated and realistic about the selling price in the prevailing market. I'm sure she has other qualifying criteria but these are her 2 biggies.

She has less listings than almost every agent but sells more. Sounds like a rare thing in the RE industry. Someone that actually understands the dynamics of sales & marketing.)


2. We all know the 'for sale' signs out the front of properties are to promote the image of the agency as much as sell the property (actually more so)

Is there a 3rd not so obvious motivation why agents hate selling properties with out the sign out the front. And that is if anyone walks in and attempts to buy the property and circumvent the agent (deal directly with vendor) the agent can easily say that his marketing attracted the prospect and therefore is entitled to commission.

Without the sign, they would have a hard time doing that.

1. It costs nothing for a listing, and the agent may even make some money out of it without a sale if they can con the Vendor into lots of useless ads.

2. It's advertising, and there are always buyers trawling the streets looking for a prospective purchase - even in dead markets.

That lady sounds more switched on - making sure the seller has set the sale price to the right level or won't do business with them. She'll lose a lot of listings, but only get the real ones.

I worked for an agent for a (very short) time, and had to do an appraisal for a lady. Based on recent comparable sales, I priced her house at $650k. What an idiot for being so honest.

After not hearing from her for a week after the appraisal, I called her to see if she had made a decision about the listing.

She told me that she had received 2 more appraisals; one was at $950k!

Needless to say, I didn't get the listing, and it was still for sale 3 months later when I saw the light and gave the whole sorry circus the @rse.
 
The owners will only sell to someone who will keep it as a B&B. They've had offers from people who want a remote and beautifully renovated (for this area) 7 bedroom *house* but don't want the business, and they have turned them down.

Why don't the people just say "yeah sure, whatever" then close the place once they've bought it? What can the vendor do about it after settlement. :confused:
 
Why do agents take on listings in which the vendors have unrealistic expectations? Is it just on the hope they can condition them over time to bring the price down and clinch a deal?

Greed i say. Higher the price paid for a house, higher the commission amount :rolleyes:
 
Why don't the people just say "yeah sure, whatever" then close the place once they've bought it? What can the vendor do about it after settlement. :confused:
Not much. But given how ridiculously expensive that place is, and how unmotivated the seller is, they've probably only had half a dozen or less offers in the last few years anyway. A 3br house a few doors down from it sold for $55k last year after a mere 6 months for sale. The pub is an actual profitable business and sold for ~$140k I think. You can buy an entire church for $40k. There is no appeal in buying that place at that price considering it *will* sell to a pensioner of some description, and the pension is only $10k a year.
 
One of my Real Estate coaches swears that if he could get every real estate agent in Australia to take off the market all the properties for sale that are either over priced or were the owner has no motivation ( ie if I get my dream price) off the market, then we will cure the preceived idea that we have an over supply of properties for sale.:)
 
Evand - here you go....my response in bold!


I am fascinated by the RE industry and love to gather information on it and figure how it works. I consider it my life's work. So do I and all the other professional agents out there!

Its not easy for an outsider as they keep all the tricks/secrets very much in house. Tricks? What tricks? This is half the problem...people (especially agents) try to mystify the process to make themselves feel important. Real Estate is really very straightforward and simple.

Luckily i have been friends with a few over the years. With 2 leaving the industry disgusted at the duplicity and lack of ethics.

Can't blame them - i have been in this game nearly 15 years and have worked in different countries and nothing changes - i have seen some despicable behaviour and have been disgusted by many things. I now try to take the attitude that nothing will surprise but I am still regularly surprised by some of the things people (agents) will do to make money!

Anyway, as usual i have been thinking about agents and have come up with 2 questions. I have my own views on these but would like to throw it out for comment.

1. Why do agents continue to chase listings in a dead market (such as now in most places) when they know it adds to the over supply problem, as most listings don't sell. I know they have to pay bills as well but most listings are overpriced in the current market and just sit there for a long time.

There are a few issues in the one question...crap agents chase listings because that is what they are taught/told to do. It's a numbers thing for them. Good agents pick and choose what they list - their listings rarely sit around for a long time because (1) the vendor is motivated (2) the price is right because the agent has researched well (3) it is advertised correctly (4) the agent gives good feedback and honest sales support thus allowing the vendor to make an informed decision when the time is appropriate. The rest is up to the vendor - but if the rapport is good and trust is there the listing should sell. PS Having listings doesn't pay the bills - it adds to your costs!

If anyone can influence the supply/demand equation in their favor its agents.

Correct - unfortunately most agents are not intelligent enough to know this

(By the way, i read a story recently about an agent who is consistently the top seller in her state. How she does it is she qualifies the sellers much more then the buyers.

She does this by not listing any property where the vendor is not truly motivated and realistic about the selling price in the prevailing market. I'm sure she has other qualifying criteria but these are her 2 biggies.

She has less listings than almost every agent but sells more. Sounds like a rare thing in the RE industry. Someone that actually understands the dynamics of sales & marketing.)


Sounds like a very clever lady. She obviously knows the score!

2. We all know the 'for sale' signs out the front of properties are to promote the image of the agency as much as sell the property (actually more so)

"Not quite true...The promotion of the agency is an unavoidable fact. If the vendor is happy with the service, they should be happy to promote your business too and you will find that is generally the case.

Is there a 3rd not so obvious motivation why agents hate selling properties with out the sign out the front. And that is if anyone walks in and attempts to buy the property and circumvent the agent (deal directly with vendor) the agent can easily say that his marketing attracted the prospect and therefore is entitled to commission.

Without the sign, they would have a hard time doing that.[/QUOTE]

Load of rubbish...we cannot sell a secret! The sign is a 24 hour salesperson. If an agent has done his job/paperwork correctly there is no issue or fear of a buyer going around you. Anyway, that sort of lowlife behaviour probably makes you worse than most agents!!

Hope that clears up a few things!
Don't want to be controversial, but will stand my ground on this one...I am proud of what i do and everyday go to work with my head held high, every night i sleep well in my bed. I am a professional and there are plenty more like me in my chosen career - unfortunately all we ever hear/talk about is the blithering idiots/cheats/liars and conmen. The main reason is because it is more sensational...even i am to blame for this (see my thread "Why do agents do these things!") I get frustrated too - especially when people think i am something i am not just because of my job title!!
Peace!
 
1. Real estate is a numbers game - the more properties you have - the more likely your chance of making a sale.

Don't you think that its also interesting to find out why people pick a time like now to sell their properties? The market isn't at its peak - so why sell now?

2. For sale signs - no, third reason I can think of :)
 
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