Article written and provided by Neil Jenman from Jenman.com.au . To see the original source of this article please click here. https://jenman.com.au/the-coming-real-estate-revolution/
“OFF MARKET” SALES
AND THE END OF NEEDLESS ADVERTISING!
by Neil Jenman
READING TIME: Apx 5 minutes.
There is a revolution brewing in the real estate industry. Times are changing for the better for sellers. The feeling is everywhere. It’s palpable. And only the most obtuse die-hards – or those with vested interests – are denying it.
Like all true revolutions, this will be caused by the excessive greed of the ruling class exploiting what they see as the lower class, the peasants.
If “peasants” seems too harsh, you need to know how this ruling class treat those “beneath” them – with almost complete contempt. “Let them eat cake” has become “grab their cake.”
The “ruling class” are major real estate advertising websites. For 20 years or more they have acted with ever-growing belief that they are indispensable, that neither agents nor sellers, who they see as the under-class (the peasants), can exist without them.
And so, every year, believing they have a choke-hold on agents and sellers, they have behaved like the greediest of hogs at a trough and constantly ramped up prices. “What are they going to do?” has been their arrogant attitude towards sellers and agents who erroneously believe that advertising on major internet websites is “essential”.
As an executive from a major website recently said (after several beers), “They call us a ‘necessary evil’, but what they don’t realise is this: We are evil, but not necessary.”
Like all hubris-infected people, major real estate websites are now, finally, headed for a fall – or, at the least, a major drop in support. More agents and sellers are realising that not only can they live without these websites, in many (if not most) cases, they are better off without them.
There is ample evidence emerging that selling without advertising on a major web site leads to higher prices. Much higher prices.
What other reason could explain the explosion in what has become known as “off-market sales” – a term which means properties are sold without major web portals?
The greed of major advertising web sites – who now rake in over a billion dollars a year (but didn’t exist 25 years ago) has grown so large that more sellers are now asking: “Must we pay several thousand dollars – on top of thousands of dollars in commission – to sell our home.”
In almost all cases, the answer is a firm, unequivocal no.
It is rarely necessary to pay thousands of dollars to advertise your home. In most cases, it is a needless waste. Real estate advertising on major websites has reached levels of greed and consumer exploitation that’s impossible to justify.
Sellers, who are the first to revolt with statements such as, “This just doesn’t feel right,” or “There must be a better way,” are now being joined by some of the best (and smartest) agents who, to their credit, have stopped defending the indefensible.
The public – especially home sellers – are asking questions they should have asked years ago. They are discovering facts they should have known. The slick lines and sophistry of major agents (those who love advertising because it builds their “profile”) and their advertising buddies are under sharp scrutiny – as they should always have been.
Increasingly, agents are being confronted by sellers who have done their research, who understand how the ‘system’ works and who are now demanding what they should always have demanded, ‘NO COSTS UNTIL SOLD’.
Many agents are now being given a choice from savvy sellers: “Sell our home without the needless cost (“rip-off”) of advertising OR we will find a better agent.”
Australia’s most respected real estate trainer Michael Kies (who often searches for the best agents on behalf of sellers) says: “Many agents are now so addicted to real estate advertising; they’ve forgotten basic rules of selling. An agent’s job is to find buyers for sellers in the most cost-effective manner. That means not wasting thousands of dollars on needless advertising and, worse, putting sellers in a position where, if they don’t sell (for any reason) they are out of pocket thousands of dollars.” As an agent himself for 25 years, Michael Kies is proud that he never put his sellers in such an invidious position.
When searching for the best agents, Michael often asks them, “Surely, you keep records of all buyers who contact you” Yes, most agents agree they have hundreds, even thousands, of “buyers on their books”.
Michael then asks: “Why don’t you see if you’ve already got a buyer on your books before you waste thousands of dollars of the sellers’ money?” In many cases, when agents advertise homes, they attract enquiry from buyers known to them. Too many agents are now too lazy to follow up buyers. As the well-known marketing saying goes: “Advertising is what you do when you are too lazy to follow up prospective customers.”
Perhaps the most exciting news for sellers, however – and, as mentioned, there is plenty of evidence to support this claim – is that off-market sales seem to attract higher prices. If “off-market” selling does mean higher prices, it’s not hard to predict what’s coming.
Many agents are now openly admitting they are tired of looking stupid as their nonsensical arguments to justify huge advertising costs are shot-down by savvy sellers. They are realising that, to win more business, they need to tell more truths and take better care of sellers.
The three biggest truths in real estate at the start of 2020 are:
First, sellers can save thousands of dollars rejecting needless advertising.
Second, sellers can get a better price not allowing their homes to be “flogged” on internet sites.
And, third, the better agents are discovering that saying to sellers: “Pay us nothing until you are happily sold” wins more sellers than saying: “Sign here and give us your money.”
If you are selling your home, do yourself a favour: Join the real estate revolution and say to agents: “We will not pay any costs until we are happy with the price and service you give us.”
Stand firm sellers. If agents want your business, make them do what’s best for you.