Picking the agent who “sells more than anyone else” in the area isn’t necessarily the smartest move a vendor can make. Its a very old strategy, but one that’s worked so well over the years for agents, is to highball vendors expectations at the time of listing and once the authority is duly signed, or shortly thereafter the lowballing begins. In the industry this is termed as “conditioning the vendor’s expectations” and not only is it standard practice for many agents, particularly on auction day, it seems to be the entire business plan for a current industry giant in the Australian real estate scene. Success in real estate it appears is a matter of getting as many signed authorities as possible.
So Highballing at the time of listing and lowballing thereafter drives “success” it seems, but is this really what you are looking for from an agent? In the popular book Freakonomics the authors contend that statistics have proven that in the United States agents who have sold their own properties have achieved on average a 10% higher price in comparison to properties they have sold for clients. Is it not this determination to optimise that you deserve for the money you part with to employ the agent?
A good or even a great agent cannot be measured by the number of sales they make, what makes them good or great is attitude, along with the ability to negotiate well, as opposed to “selling” the property. The hallmark of a good agent is that rarity where the agent genuinely places the vendor’s interests above his or her own. An agents motivations or ethics is pretty well impossible to measure at the time of their appointment but he or she will show their true colours over the journey. For some agents selling lots of properties is a meaningful measure of their “success” but for ethical agents success is measured by the quality of their results as opposed to the number of properties they sell. Success often means different things to different people and an agent’s apparent success does not necessarily translate as a success for a vendor given that commercial reality dictates that “HIGHER TURNOVER IS ALWAYS ACCOMPANIED BY LOWER PRICES”.
To avoid a potentially dangerous pitfall the question a vendor should give some consideration to is just who benefits the most in hiring an agent who sells the most property in any given area? To make my point I remember competing in the market place with a “highly successful” agent who had a big reputation due to the many awards won, in fact this agent was one of Australia’s leading real estate sales people. What was not common knowledge at the time was that on the small number of listings on which I competed successfully for, I was able to achieve a selling price of between 15-20% more than my competitor had quoted as being actually achievable. In short, it is quite easy to amass an impressive record in the number of sales achieved but this statistic is no indicator of whether the results in these cases were optimized. It would be a difficult task to estimate how much Vendors cash has been left on the negotiation table to fuel an illusion of such “success.” In short, the number of sales an agent or an agency makes is no indicator of successful outcomes from a vendor’s point of view.
A good agents first and foremost duty is and should be, to act in the best interests of those employing that agent and really the only component of the agent’s skills worth paying reasonable dollars for is their negotiating ability. No agent can sell a property to someone who doesn’t want to buy it, position, views, the heat in the market any number of other factors have far more to do with achieving an actual sale than does the “selling” abilities of the agent. Any fool can sell a property, its not difficult, optimizing the result is the difficult part and for that you don’t need a “sales” person, but rather a skilled negotiator.