Recently I’d sold a property for one of my clients and they asked me to help them purchase another property.
They saw another property online with a different agent at another agency.
I called that agent to set up a time to view it as my client was overseas.
The property looked fine with an advertised price of $969,000. I don’t know why agents advertise at a fixed price as this does not allow any flexibility in the negotiation process, but that’s for another article.
I viewed the property and reported back to my client.
The next day I call the agent to put forward an offer at $940,000. The agent tells me there is now another buyer (thought to self – how do you know if this is true or not?).
Anyway my client wants the property and thinks it is a steal at $969,000. We tick tack with the agent and the “other buyer” increases their offer to $969,000 (full ask). The agent wants to know if my client will go over this price.
My client would go over and has the capacity to go well over, but there are a few things about the property that tell me it’s not worth going over for this one.
I advise my client to sit firm at $960,000.
3 days later the agent calls me and says the other buyer is no longer going ahead. (thought to self – my initial instinct that the buyer wasn’t real is now confirmed).
My client decides to reduce the offer to $950,000 and the agent wants to know why. I explain the few minor issues and the agent takes this on board. Long story short, my client increases the offer to $960,000 and vendor accepts.
Then the next day the agent calls me and asks if we ordered a strata report, saying someone has ordered one. (thought to self – this agent is really starting to turn on the SPIN to create urgency).
It’s now been over a week and my client is about to exchange but this other buyer has not materialised.
Why do agents feel they have to SPIN in order to create urgency or competition with buyers?
I believe it’s because they believe this is a skilled approach or that its okay for them to do on behalf of their vendor/client (because they are the one paying for the agents service).
Over the years I have developed a negotiating style that is fully transparent with buyers using a series of open ended questions.
A good sequence of questions can get genuine buyers to put pressure on themselves to increase their offers and move swiftly. There is certainly no need to mislead them.
In fact I believe that many buyers are not stupid and have a 6th sense. Their instincts pick up on this SPIN and they leave the negotiation if they feel they are being mislead.
These buyers are often the best buyers prepared to pay the highest price. But agents who use use SPIN instead of SKILL to create competition and/or urgency often lose these buyers. In my experience buyers can’t explain why they lose trust. But it happens a lot in real estate. Why else are agents the third worst rated people in society after used car salesmen and advertising agents. Consistently over the last 10 years only 9% of people trust real estate agents according to Roy Morgan Research.
So be better than the pack and use SKILL over SPIN. Buyers are not stupid and will disengage from a negotiation if you lose their trust. Many of these buyers will also never deal with this agent and even the agency again on other listings. This is a major source of lost buyer opportunity for property sellers and spending $10,000+ on advertising to “Find buyers” won’t attract these best buyers.
Most of these buyers in my experience are the ones who will pays overs and make you look fantastic to your vendors if you treat them with the respect they deserve. Acting with skill instead of spin will also help us improve the perception of estate agents within our communities.
Happy selling and buying!