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Why do some Real estate Agents / Consultants lie about price?
Do you ever wonder why so many agents exaggerate or simply just lie about price to get you to list your home with them?
Sometimes consultants lie due to ignorance, sometimes it is a honest mistake, sometimes It’s poor role models or lack of training and sometimes it is just because they are plain dishonest.
The issue is a little more complicated than that though. Most sales agents want to be totally honest but the public doesn’t always make it easy for them.
As a practising sales consultant, many times I have cursed an opposition sales consultant for beating me to win a listing by deliberately over pricing a property only to see it sell many months later for the lower price that I quoted.
Many times I have seen owners curse a consultant who has wasted their marketing dollars whilst their property has been overpriced only to have to find more marketing money once their house has been reduced to a saleable price.
Is the Agent totally at fault for over pricing properties in both of these instances to win the business or does some of the fault lay elsewhere?
Agents often have a poor reputation when it comes to honesty and yet most agents I know are generally honest decent people who want to do the right thing.
Unfortunately the natural greed of human nature doesn’t always make it easy for sales consultants to say what they really think when it comes to pricing properties.
Honesty, particularly in today’s market can sometimes be seen as being a bit negative and no one wants to sell their house with a negative sales person.
Owners often say to consultants, ‘We just want you to be honest with us.’ Unfortunately many owners interpretation of honesty is different to what most consultants would consider as being honest.
If the appraisal is based on a cold call where there is no previous relationship and there is no distinct difference in the ability between the competing sales consultants then more often than not the owner will simply choose the consultant who quotes either the higher price or lower commission.
The following is an example of a very common scenario that happens everyday in real estate where an inexperienced, honest consultant takes an owner’s word on face value when they say… ‘ I want you to be honest with me.’
The inexperienced consultant presuming that the owner wants him to be honest tells the owner a realistic price only to lose the listing to an experienced consultant who lost a listing the previous week for being honest.
The experienced consultants hard won experience has now taught him to be not quite as honest as he would like to be.
So the next time the inexperienced agent gets a listing opportunity he wises up to the ‘I want you to be honest with me’ line and stretches the truth a little to a price the seller wants to hear, a price that will give him a chance of earning a dollar by winning the listing which could eventually lead to a sale.
And this cycle repeats itself time and time again.
So, are agents always 100% honest?
Are they the only ones to blame for this lack of honesty?
Is this ever going to change?
Not whilst Agents have a fear of losing business by being honest.
A solution could be to take the appraising of property out of the hands of consultants and give it to an independent body (valuer’s ?) so that the decision on which agent to employ is based on things like reputation, references, presentation, marketing, negotiation skills, knowledge, market share etc., but not opinion of house price.
Can’t see that happening though
My Advice to sellers would be to choose a consultant not on the price they quote but the ability they demonstrate. If you want to achieve a really high price you need the best consultant working for you, not the cheapest one or the one that opens his mouth the widest on price.
The challenge for agents to win listings whilst still being honest is to show owners that honesty with evidence based research should not be confused with an Agent’s commitment or ability to beat the market suggested value through the correct marketing and pricing strategy.
If my ideas interest you follow me on Slideshare for further thoughts on Real estate, Sales and Marketing and Business. Tony Morrison CEO Harcourts Tasmania firstname.lastname@example.org