Recently, we talked about the pitfalls of selling off-market. We concluded that vendors who wish to maximise the value of their home would never consider selling in an off-market scenario.
And that’s brought us to today’s subject – buyer’s agents.
We field tonnes of calls every week from buyer’s agents looking for off-market listings for their clients. Most buyer’s agents’ websites list as one of the important factors in choosing to employ a buyer’s agent is for those off market opportunities. Many boast a large proportion having sold off-market properties they sell – 60% in some cases.
They ask vendors to contact them directly to sell off-market. Be aware that it’s illegal for an agent to make commission on the sale of a property as well as the purchase. An agent can’t receive commission from both buyer and seller – that’s called double-dipping.
So that’s our first point – why sell direct via a buyer’s agent when they represent the buyer? It’s a very counter-intuitive move. When you need legal representation, would you have a solicitor represent you as well as your adversary?
Most buyer’s agents also entice their clients because of the savings they claim a buyer can make by using their services.
Our research indicates that buyer’s agents argue that they save their buyer clients 7-13% on the price of the property they purchase. That can equate to a $20,000 loss on a $300,000 property to a $200,000 loss on a $3,000,000 home. (That’s using the 7% scenario).
Our second point is obvious. Why get a buyer’s agent involved in the sale of your property when you stand to lose so much money??
The last but not least point about selling in isolation to one buyer off market is that it removes one of the best ways to achieve the highest price for your property, and that’s buyer competition.
When a buyer knows they’re the only one seeing the property, it lessens the pressure on them to pay the most they can. The best way to achieve the highest price is through competition.
We understand buyer’s agents are great for time-poor buyers who don’t have the availability to shop around. However, the real estate industry’s focus on providing an abundance of information on digital platforms makes it a super-easy process these days (Peter once sold a property to a buyer who was in the Amazon Jungle – he found our images, floor plan, copy writing were enough).
If buyer’s agents’ stats are correct, and they’re selling numerous off-market listings at 7-13% under market value, well, we’ll leave it to you to draw your own conclusions. Keep in mind, you might be a buyer this time around, but you do not want your market eroded when it comes time to sell.