It’s only human nature to scan the real estate websites and find the suitable properties that seem to be in your price range and inspect them.
This happens to be the case for every other buyer in the same market place as you.
The next stage is to find the suitable property and then use the agent’s guide as the yard stick to throw in an offer that is lower than the upper limit of the guide or even in the middle and try to negotiate backwards.
This is a big mistake for the potential home buyer. It is one that makes you lose credibility with the selling agents and brings on the effect of being dumped due to you being nowhere near the owners’ expectations.
This isn’t for you to know either. Why would the selling agent give a guide which makes you put in what seems to be a generous offer only for them to laugh it off or treat it with no respect?
The first thing is understanding price guides, under quoting laws/loopholes & why agents like to pitch the price lower than the vendor expectation:
The loophole around under quoting is conducted by marketing the property at what price the agent places on the selling agency agreement between the agent and the vendor. The home could be worth $1m for example but the agent wants to attract every buyer from $800k and above. The Agent hopes to ramp up competition for the buyers around the $1m mark which the vendor is expecting. It also has the effect of capturing more names for their database by attracting the masses through the open houses. Just because the agency agreement has $800k on it for marketing purposes (house is worth $1m) doesn’t mean they have to sell for $800k. They are just signing off on marketing price guides. The vendor is not at liberty to sell their home just because they have signed an agency agreement either. The agency agreement means that you have to pay a commission should you sell during the agency agreement time. The agreement essentially agrees to fees and time. Should a buyer complain that the agent has under quoted, the agent will quickly email the agency agreement which matches the marketing price guide and the complaint goes away.
At the end of the day, the lower the property is pitched, the larger the buyer pool, the more success for the agent come auction day.
The problem with the above method for the potential home buyer is that the agent can attract up to 100 buyers or groups through the open house. It is near impossible to call everyone back and then the culling begins. All the buyers at the low end of the guide get dumped and the buyers showing interest at the vendors expectation get over serviced. If you are one of those people who feels that the guide is the expectation and make offers on the property based on the agents guide, funnily enough, you will be in the dumped pile of call backs/interest.
The best way to get full attention out of a real estate agent in this market is by telling them you have a house to sell as well as a purchase to make. It’s amazing how available they become when they see an opportunity.
Give yourself the best chance for assistance with real time market knowledge by using a REBAA www.propertunity.com.au accredited Buyers Agent.