Private Sale Or Public Auction?

[CASE STUDY] South Yarra is a suburb where the local real estate agents 1) insist auction is the best way to sell your property, and 2) demand home sellers commit to huge advertising budgets (which promote the agents much as the property) without any guarantee of success.

Having sold a property by auction a few years earlier, Carolyn knew that was not something she wanted to go through again. But when she started to interview which real estate to choose – she was having deja vu. But as the old cliche goes ‘trick me once shame on you, trick me twice shame on me.’

This is Carolyn’s story…


 

CASE STUDY
Name: Carolyn Tate
Property: 13 Lara Street, South Yarra
Sold: March 2016
Agent: Eon Dyson
Method of Sale: Private Treaty

Why did you choose Eon to sell your house with in the first place?

Well, I chose Eon and TG Newton because I really wanted to work with an ethical real estate agent.

Over five years ago, I sold my property in Sydney and had a very unpleasant experience, so the idea of selling my property again was very daunting. I decided that I had to really do my research and not just pick the agent that’s going to offer to sell my property at the highest price possible and create all that stress around auction which is what happened in my last sale.

So, I was really relieved to find an agent who didn’t go down the path of hyping up an auction and ‘oversell and under-deliver’ philosophy that I think a lot of real estate agents utilise.

I got three quotes to sell my property in Sydney. That was in 2010. And the agents were all pretty much the same – pretty vanilla. They all said they’d be able to sell my property for an exorbitant rate, and they all discounted their real estate fees drastically.

So, when it came to the time to choose between the three, there really wasn’t much in it. I took just a stab in the dark and picked one. There was a lot of stress associated with it. Also, just before I was about to sell, the agent told me he didn’t think he could get anywhere near what he’d promised me I could get. He was conditioning me to be prepared to accept something far less than the price he’d promised me.

The whole experience was awful.

What was awful was all of the agents told me that I would be able to get far more for it than what I actually did end up getting. So, I felt it they were lying basically.

All they did was present to me the high sale properties in the local area, so they really didn’t give me a proper valuation. They were really hyping me up to expect a big price so that they would win the business.

So, when it came time to selling this place, did you go through the same process again? Did you interview a few other real estate agents?

Yeah, I did. RT Edgar and hmm, I’ve even forgotten the name. That’s how memorable they were. So, I went to two other agents, and one agent told me that I should not sell my house for less than $1.5 million. And then, when I sat down with Eon, and he gave me a true appraisal of my property – comparing like prices, the high prices and the low prices and really a realistic view of what was happening in the market in my local area. It was just poles apart in terms of what they’d offered. So yeah, the two other agents I spoke to were very similar. They had told me I should get way more than really what it was worth.

And you knew that it wasn’t worth as much as the other agents were telling you? 

Well, I guess like every seller, we always think our house is worth more than it probably is, and we always want the best price. And I think most people will only look at the properties that have sold in the street and they’ll try and compare them to those rather than really being critical and looking at all of the properties. So, there was a property up the road that had sold for about 1.56 which was a ridiculous price we all thought at the time. And so, I guess I was comparing my property to theirs, but in reality, there was quite a lot of differences. So, I think I got a very fair and reasonable price for a wonderful property.

The price that Eon told you, was it less than what the other agents had told you?

Yeah, it was. So, the price that Eon quoted was less than the other agents, except that Eon had done a full review of all the properties in the local area. He’d presented the case for his evaluation, and he set a price range of $1,200,000 to $1,320,000.

And I ended up getting $1,312,500.

So, he was extremely accurate…?

He was extremely accurate. And I guess for me, I’d never really had an experience of an agent like that. I’ve always just really, in all the times I’ve sold properties over the years, I’ve really not had that kind of ethical approach to selling properties, so it took some getting used to.

And I think for anyone else that it selling their property, it’s really, really important that you be realistic. I really feel like it’s been a really pleasant experience.

Was it apparent that Eon was different from the others straightaway? As soon as you met him?

Yes. He told me he was a policeman, so that was fantastic. And all the other agents looked like they’d been selling real estate for the last 30 years, and they were, you know… You would expect because they are older that they’d be more experienced and good negotiators and valuers and all of those things, but really all they are is bad salesmen. They’re really not skilled at negotiating, not skilled at valuing, not skilled at dealing with both the vendor and the buyer. With the other agents is I think that they’re pretty much focused very much on themselves, and really they don’t care about the buyer or the vendor. And I think that working with Eon and TG Newton, there was very, very deep consideration. I’ve never met a real estate agent like Eon, so yeah.

Was the distance from your house to our office a concern for you to begin with?

To begin with, I was concerned about the proximity of TG Newton, and whether they were actually specialists in the local area. But, once I had that meeting and understood what their marketing strategy was, and the fact most properties are bought because they’re found on the internet.

So, the idea that having a local agent that many people think you have a local agent, it’s actually not true at all.

Most real estate agents expect you to pay upfront for the advertising and marketing needed to promote a property…

So, what I loved, the mainstream agents were expecting that, well, I was expected to pay $8,000 plus for marketing – and really probably just to market their brand, not my property.

Whereas, with TG Newton, there were no (upfront) fees whatsoever, and everything was covered; from photography to internet advertising to the billboard and everything else that was needed to get my property out into the marketplace.

I felt really comfortable making the decision to sell my property and that I did not have to outlay any money. It was a risk-free experience.

How long did your property take to sell?

My house took less than four weeks to sell. So, from the time it was advertised till the time that it sold was less than four weeks.

Can you please tell us about the inspection process?

What I really loved was that there were no open inspections. That meant no nosy neighbours, window shoppers, or people with no intention of buying. And I love the idea that Eon qualified each of the people, on the phone, before they even came to the property. So he knew they were serious buyers not just window shoppers.

Is there anything else you’d like to say?

If you’re looking for an ethical real estate agent, you can be sure they are out there, and I would encourage anybody who is selling their home to seriously investigate other agents and other ways of doing business.

I’d seriously consider not going to auction. If you’ve done it before, you’ll know how stressful it is, and if your property’s passed in and you can’t find a buyer, and your address is being advertised online and everyone knows that it didn’t sell, then you’re putting yourself if a really weak position for anyone coming further down the line to offer to buy it. They’ll probably want to negotiate a really low price.

So, just they really care for when you sell your property and absolutely investigate who you sell your property with, and look for an ethical one like TG Newton.

old milk barAnother Case Study:

Auction Vs Private Sale – Rhonda’s Story
If you’re tossing up whether to sell your house by way of public auction OR private treaty, watch Rhonda’s story. She has experienced both. We think her story might help you decide which is the best option to sell your property.

You have sold a property privately (private treaty) and you have sold by public auction. Can you please sum up the difference between the two?

Yes, so I’ve sold by auction before, and the trouble with auction is: 1) you don’t know if you’re going to sell 2) you don’t know if you’re going to get the right price, and 3) you don’t really understand whether the agent has the skills and talent to actually get a good price for your property.

So, the auction process for me is just fraught with anxiety and nervousness. Whereas, by selling by private sale is, it’s just easy.

There’s no real hype and buildup to the auction day and then boom, which is what’s happened in my previous transactions. So, it’s a much more pleasant way to sell, and you’ll still end up getting a really good result.

Was it a concern for you that Eon was perhaps less experienced than the other agents you interviewed?

Originally, it was a concern to me that Eon was a lot younger. But again, that’s just been my conditioning to accept that real estate agents have to be old, grey and 60. I had no idea what training Eon had gone through to get his job. I know that he had six months of training and selection process before he was even taken on as an agent. So that said a lot to me about how serious the Jenman Group is in selecting their agents. And also, just he explained to me the skills and abilities and the training that’s he’s gone through, so I soon realised he had better negotiation skills than any of those 60-plus-year-old blokes out there have got.

Everything that you said sounds pretty good but was there ever any stage while your house was on the market that you were concerned?

I was at times concerned that we weren’t getting enough inquiry, but I realised that was because originally I’d set the price too high, and didn’t take onboard Eon’s advice about what the property really was worth. So, I think the concern was to do probably with my own bloody mindedness rather than Eon’s capacity.

I’d been conditioned by the other agents. You know, one guy said to me, “Do not sell your property unless you get $1,500,000.” And I was comparing my property to the two that have been sold up the road which is not really good market research it is? Eon had researched maybe 50 properties in the local area and was able to give me a really true valuation. And the fact that I got less than $10,000 difference between the top price he’d valued it at and what I got was a true indication of his skills as a valuer and also as a negotiator.

I’d like to say thank you to Eon and TG Newton for handling the sale of my property, so professionally and so mindfully and ethically. And if you’re a real estate agent watching these, you should either get out of the industry or go to TG Newton and get a job.