The Highest Price
How to get the highest price for your property
The following is an extract from the booklet, “How to get the highest possible price for your property”, written by Gary Pittard.
Choosing & Working With an Agent
Choosing the right agent is crucial if you want to get the highest price for your property with the least amount of stress.
Buyers have a choice – your home or someone else’s.
Your agent should be skilled, selling the positives of your property and, when necessary, selling the negatives of properties that are listed with other agents.
This does not mean your agent should mislead people. It means that your agent works for you and not for the other home sellers or their agents.
Be sure your reason for selling is confidential. No-one, other than the agent you trust, should know why you want to sell.
If the buyers know you have a pressing reason for selling, this could be used against you.
It is enough for buyers to know only that you want to sell. The reason is your business. Revealing it could weaken position when you receive an offer.
The best agents will tell you how to give your property that special feeling that wins the hearts of buyers.
With the right agent, and with your property looking its best, you will always get the highest price.
The advice contained in this booklet may be contrary to the advice you receive from many real estate agents.
The greatest problem facing home sellers is lack of information. Some people only sell a property once or twice in their lives. Even those who sell more often rarely have the experience or the information to know how to get the best price with the least risk,
Following are some things you should consider when selecting a real estate agent. You will, it is hoped, notice that in none of these ways is it suggested that you select an agent based on who charges the lowest fee, or on who quotes the highest selling price to you.
This is the most dangerous way to select a real estate agent.
Insist on a Guarantee
The best advice to any person thinking of selling a property is to insist on an iron-clad service guarantee – one that gives you the opportunity to terminate the agent’s services WITHOUT PENALTY if you are not receiving the service your agent promised you at the listing presentation – you will find a sample guarantee at the end of this booklet. All agents will ask you to sign an agreement before you sell your property. But remember that you are being asked to sign their agreement. Many sellers bitterly regret signing that agreement with the agent.
The best agents will gladly GUARANTEE their services. If your agent does not offer you something better, by all means copy, and use, ours.
Avoid agents who do not offer a service guarantee.
Find an agent you trust
If you don’t trust the agent, don’t hire the agent. A major ingredient in any relationship, business or personal, is trust.
Before you choose your agent, ask many questions, check references, ask for a guarantee, test their negotiation skills and ask yourself a BIG question: Do I feel comfortable with this person handling the sale of (possibly) my greatest financial asset?
If your answer is ‘no’, do not hire the agent.
Once you decide on an agent, give the agent your trust and confidence. Do not interfere.
Allow the agent to make decisions and get on with the job of finding the right buyer for your property.
If the agent later loses your trust, provided that you insisted he or she sign a guarantee, you can always dismiss the agent and find one you can trust.
The best agents are worthy of your trust. They won’t let you down.
Don't pay advertising costs
The way typical real estate agents advertise is a waste of money. Make sure it is not your money.
Many agents advertise to promote themselves, and not your property. In the past twenty years, real estate advertising has increased as much as twenty times. In most areas, the number of sales being made today is the same as twenty years ago.
Home sellers are often pressures to pay thousands of dollars for advertising. This is needless expense because very few properties are ever sold because of advertising.
Be reasonable with advertising
Advertising will rarely sell your property. Too often home sellers make the mistake of demanding advertising for their properties.
The previous hint for selecting an agent advised you to not pay advertising costs, but this does not mean that you should make unreasonable demands upon your agent for needless advertising. Be reasonable about advertising.
Buyers who want to but in your area know the area. It is the area that attracts them, not advertising. It is a waste of time, money and energy to place advertisements in publications that reach thousands of people who will not buy in your area. The media your agent chooses to expose your property in is also important. Many buyers are now Generations X and Y, and these people do not read newspapers nearly as much as do ‘Baby Boomers’. Agents who rely on newspaper advertising are quickly becoming old fashioned.
Your agent needs to be an expert in Internet Marketing, and should not necessarily ‘follow the crowd’ by advertising heavily on third-party websites, either.
Here is what your agent should be doing to find a buyer for you:
- Your agent’s office should be open 7 days;
- Your agent should be sending email Home Alerts to thousands of buyers every week;
- Your agent should have a large numbers of signs in the area;
- Your agency should be an expert at directing enquiry to his or her agency’s websites.
This will bring the best buyers to your agent and your agent will then qualify the buyers and bring the right ones to your property. That’s how most properties are sold.
If your property is not selling there are usually only two reasons: the agent is incompetent or the price is too high.
If you keep advertising your property, people may start wondering what is wrong with it.
Some agents tell lies to win your business.
Be very careful that you do not choose the agent who tells you the biggest lie about how much ‘you will get’ for your property. This is called ‘buying the business’.
Unless the agent is prepared to buy your property, his or her opinion is irrelevant.
If you choose agents based on the selling price they quote you – their opinions – you may be badly disappointed, and may even wind up in financial difficulty.
If you suspect that an agent is attempting to buy your business with an inflated sale price estimate, insist they give you their estimate in writing.
Insist, also, that they charge you nothing if they sell for less than the price estimated. This will identify the agents who are enticing you with false quotes.
Weekly Price Review
Price is a major factor in marketing and it is important that you and your agent get it right.
Since all negotiation experts say that if you want to get the highest price you should start high and then come down until the right buyer is found, it stands to reason that price is a very important factor in effective marketing.
Every week you and your agent should meet to discuss:
- The week’s marketing – what has been done, and what enquiry did it generate?
- Discuss individual enquirers and what they had to say about the property. This includes those who talked with the agent about the property even if the discussion did not result in an inspection.
- Weekly Price Review – is the current price attracting interest? Have any offers been made? At what price should the property be offered in the coming week?
Try not to get too ‘hung up’ on price. In marketing, price is like bait is to a fisherman – if one type of bait isn’t working, change the ‘bait’.
To open, or not to open?
As mentioned earlier, open inspections can make a property look smaller.
They also leave you exposed to the risk of ‘games’ being played by prospective purchasers. There have been cases where a purchaser, who was interested in a property, spoke loudly and negatively about it during the open inspection in the hope of discouraging other purchasers.
Whether this tactic succeeded or not is irrelevant – why risk exposure to such tactics.
There have been cases of theft during open inspections and opinion is divided as to whether the home owner is covered by insurance in such circumstances – after all, the thief was invited into the home.
From a professional selling perspective, only people who are qualified to purchase should have the right to inspect a property, and they should be allowed to do so at a time most suitable to them and to the home sellers, not the agent. Although open inspections are more convenient for the agent, who only has to serve each seller for one hour per week, some agents believe in an old-fashioned concept called SERVICE.
If your agent is happy to offer you, and your potential purchasers, better service by taking buyers through one at a time, you may find this service leads to a higher price for you
Should we have a sign?
The buyers who are most likely to pay the highest price will specifically want your location. No sign can mean no sale.
A sign attracts these buyers. It is your 24 hour salesperson. It is often your best salesperson.
Be careful, however. Some people will knock on your door. Insist they call your agent. Trying to negotiate could cost you thousands of dollars.
For Sale Signs also attract other agents, those who are too lazy to find their own properties for sale, and those who are unscrupulous.
If other agents approach you, send them packing no matter how many times they tell you they have a great buyer.
These agents are the worst in the industry. If they will ‘steal’ other agents’ clients they will almost certainly deceive you. Do not speak to sleazy buyers or agents who approach you without being first introduced by your listing agent.
Open for buyers
Closed offices lose buyers. Make sure the agency you choose is open seven days.
Many agents work ‘nine to five’ and close on Saturday afternoons and all day on Sundays.
While this may be acceptable for a bank, you need an agent who is available to buyers when they want to go looking.
Weekends are especially important. This is when most buyers have the time for home searching.
You never know when the perfect buyer will come along. And that buyer will buy from the agent who is open. The best agents offer a 7 day service. They are always prepared to work on your behalf.
Quote the price you want
It sounds good in theory – quote a low price to ‘lure’ purchasers in, and then work to get the price up from there.
Then why do NO negotiation EXPERTS favour this method?
Bait prices trap sellers as well as buyers.
Never allow an agent to use a low false price to ‘bait’ buyers. If you use a price range or guide or a ‘by negotiation’ strategy, you are encouraging buyers to offer you less. Your ‘bait’ price will ‘hook’ you more than the buyers!
Sure, a lower ‘bait’ price may attract more buyers but it attracts the wrong buyers. The lowest price the buyers see will become the highest price they want to pay.
And never tell anyone – including your agent – the lowest price you will accept because that too can quickly become the highest price you will get.
Love Early Buyers
High prices often come early. The only problem with buyers who make good offers early in the marketing campaign is that their offers do not look so good when compared with the first, and current, asking price – which is always higher than the true market price.
American sales trainer, David Know, said, “Sellers no not come down FROM Market Price; sellers come down to Market Price.”
Ask your agent to tell you about the Endowment Effect, which was discovered by Harvard University professor, Dr Max Bazerman. The Endowment Effect explains why sellers often expect more than their properties are worth, but this expectation should not stop you from getting the highest price.
Your agent should give you an accurate estimate of the likely selling price of your property. Although this figure is likely to be less than you expected, the agent’s likely selling price range should be the TRUTH.
ALL negotiation experts say that if you want to get a high price you should start high.
We agree with this, but this creates a problem with early offers which, as was previously said, are often the highest.
The problem with early offers is that, although they are often the highest offers, they… Look terrible when compared with a high first starting price.
Low prices often come late, so be careful – the buyers you reject when your property is first placed for sale may be the buyers prepared to pay the best price.
The longer your property stays on the market, the number of buyers for it usually gets lower, not higher. And your price will often get lower too.
So treat early offers with respect.
How negotiators work
Here is how a good negotiator should work:
- He or she should give you an accurate truthful price estimate.
- You and the agent should agree on a first asking price, which should be high enough to guarantee that you do not sell the property too cheaply, but not so high that it ‘scares away’ the best buyers.
- You and the agent should have a Weekly Price Review. If there has been little interest in the property in the past week, you should lower the price for the coming week. This is what great negotiators recommend – start high and then come down.
- Negotiation with all buyers should be done by way of the Buyers’ Price Declaration. This greatly increases your chance of obtaining the highest price possible.
Good luck with your selection of an agent. We do hope that these hints are of some assistance to you.
Although you might not follow all of the advice contained in this publication, please always insist that your agent signs for you a service guarantee, and one with meaning.
If your agent does not offer you something better, by all means copy, and use, ours.
Choose skills, not the cheapest
Cheap agents get cheap prices. Be careful choosing an agent based purely on their fees.
If agents give their own money away what do you think they will do with your money?
It may be better to pay an extra one percent for a selling fee than to receive ten percent less on your selling price. Good negotiators rarely give big discounts on their fees. If they get you the best market price, they are worth a fair fee.
Choose negotiation skill
If you have spent a lot of time interviewing real estate agents, you may have noticed that they talk endlessly about the advertising they do, but few talk about the one thing that is most important to you – their negotiation skill.
Poor negotiators can cost you a lot of money.
Negotiation skills are vital to ensuring you get the highest possible price.
A good negotiator can achieve up to an extra ten percent on your selling price. This can mean thousands of dollars.
If you have an attractive property you don’t need a salesperson as much as you need a negotiator.
Ask your agent to PROVE his or her negotiation ability to you. Most won’t be able to do so. These are the agents you should avoid.
Got buyers waiting?
The best agents keep detailed records of buyers.
Most agents get dozens of enquires from buyers each month. Some get hundreds. But most don’t keep records of these people – names, enquiry details, email addresses and phone numbers.
Usually these agents do not feel the need because their home sellers pay for the advertising.
When agents keep records of genuine buyers, there is less need for advertising.
Insist on an agent who keeps detailed and accurate records of genuine buyers. One of these buyers may be perfect for your property.
The more agents you employ the greater your chances of getting a lower price.
Do not place your property for sale with several agents. You may think this will increase your chance of finding a buyer, but it decreases your chance of getting the highest price.
All of those agents will be in a hurry to sell your property before someone else sells it. The sale will be most important. The price will be forgotten.
Buyers shop around. They will use the agent who can obtain your property for the lowest price.
Test this yourself. When you see one property with several agents, call them all and ask this question: “What is the lowest price I can get this for?” You will be told different prices.
The saying goes that a chain is only as strong as its weakest link.
It is hard enough when buyers shop around for properties, but do you also want them shopping around for the weakest agent too?
Better than auction?
Many agents will say, “No!” but then again, they’re trained to say that.
There can be no doubt that auctions often get a high price, but can they guarantee to get the highest price?
Buyers Agents represent purchasers, and not home sellers. A Buyers Agent assists purchasers to buy cheaply. This is what one Buyers Agent ** had to say about auctions:
“I attend many auctions and bid for properties on behalf of my clients. At the majority of the auctions where we were successful, we had ‘money left on the table’ – that is, we spent less than our authorized limits”.**
**Patrick Bright – Buyers Agent & Author of “The Insider’s Guide to Saving Thousands at Auction”
No negotiation expert favours allowing competing parties in a negotiation to hear what another party has offered, yet this is what auction does.
A better alternative to auction is to negotiate privately using the Buyers’ Price Declaration.
Based upon an idea developed by economist the late William Vickery – one of several ideas that earned him the Nobel Prize for Economics – this negotiation tool is demonstrably better than auction for sellers, buyers and agents.
With the Buyers’ Price Declaration, no competing party is privy to another party’s offer.
This means that each buyer must offer his or her highest price without being influenced by what somebody else may have offered.
Ask your agent about negotiation with a Buyers’ Price Declaration. If he or she still insists on auction, insist upon a price guarantee.
Hire a specialist
If you follow the advice in this booklet you will seek out a professional salesperson – a trained negotiator – who uses the Buyers’ Price Declaration as a means to obtain the highest possible price for you.
You should understand, however, that few agents know this tool; and understand how to use it.
This means that if you tell an ‘auction specialist’ (usually recognized by the fact the salesperson ‘pushes’ auction to you), that you do not want to auction and then force that person to handle your sale by Private Treaty, you will have working for you a salesperson that is out of his or her depth.
A Private Treaty specialist seldom does auctions. He or she is a specialist in negotiating high prices, face to face.
But just because your agent claims to be a Private Treaty specialist this does not automatically mean that he or she knows and uses the Buyers’ Price Declaration.
Ask questions. Discover whether your preferred choice of agent understands the principles of negotiation and the Buyers’ Price Declaration.