Buyers who can’t sell their property must face “some tough truths” about the price they’ve set, and shouldn’t rely on the agent to tell them what they want is too high, a prominent real estate agent has claimed.
“There is no need to wait a long time to sell for a low price, no matter how tough the market might be,” said Neil Jenman in his July Consumer Alert enewsletter.
Mr Jenman said vendors weren’t being honest with themselves if they believe there aren’t buyers in their market, regardless of how lackluster the broader property market might seem to be.
“Yes, times might be tough for sellers,” he said. “But tough does not mean impossible. It is always possible to sell a property. There is always a buyer. It all depends on the price.”
While Mr Jenman stressed that he didn't expect vendors sell their houses at any price, “what I am suggesting is that you stop saying (or believing) that there are ‘no buyers’.
“What I am suggesting, very strongly, is that you realise a tough truth - if your property is not selling, then, somewhere between the price you are asking for it and half the price you are asking for it, is the price it could sell for today.
“So, if you really want a buyer, just lower the asking price. Still no buyer? Lower it again. Repeat process until a buyer says ‘yes’.”
Mr Jenman added with the glut of information now available to buyers, they’re much more savvy when it comes to judging what to pay for a property. He said sellers also shouldn’t base their decision on an agent’s assertion that their property was “well-priced”.
“Never mind what the agent says, there is only one way to know if your property is well priced - someone wants to buy it,” he said. “It's obvious.”
“The property market is like any other market, at least as far as money is concerned. The buyers, not the sellers, set the prices.
“Take the share market. A few months ago, people who owned Commonwealth Bank shares could have sold them for more than $60.00. Today, those same shares sell for around $40.00. That's the ‘market price’. People who own shares understand share market truths.”
“The difference with the property market is that, unlike the share market, property prices are not displayed on TV each night. And so, the property market is full of deluded property owners.
“They think their properties are worth more than the true market price.”
Mr Jenman said agents are often reluctant to tell vendors that the price of their property is too high.
“No, the agent will sign you up at ‘your price’, get you to pay thousands of dollars in ‘marketing fees’ and then, when no buyers show-up, the agent will give you the ‘market feedback’," he said. "In the agent game, it's crunch time."
“If you want to sell, the agent will eventually get you to sell by convincing you to lower your price to ‘meet the market’ (the agents love that expression).
“Now, sure, you may have fired the first agent (that rotten liar who agreed with your price). You may even have sacked the second agent (another liar who told you what you wanted to hear). You may be thousands of dollars out of pocket by the time you say to the third agent, "Please, I can't take this any more. Tell me the truth."
“And then you'll sell because, finally, you'll face the reality of a tough market. Your property is not worth what you think it's worth, it's only worth - and here comes another real estate cliché – ‘what a buyer is prepared to pay’.”