TRANSPARENCY, IS IT POSSIBLE?
TRANSPARENCY IN REAL ESTATE
There has been a lot in the real estate news in Victoria this week as the government plotted yet another change.
Concern about transparency for buyers has been focused on how buyers react when they miss out on a house at an auction. Yes, underquoting still happens but I feel that the government is missing the mark (yet again).
TRANSPARENCY AND AUCTION
Auctions are held in public usually. You can see the whites of the other bidders eyes, their trepidation, the emotion as they bid, and sometimes, they just keep bidding, blowing the Reserve out of the water. This is done in front of others, some bidders, some watching, some just neighbours.
TRANSPARENCY AND PRIVATE SALE
Private sale in contrast is held behind closed doors. The selling agent trots out lines such as “put your best foot forward” “are you happy to walk away at that price” “if you miss out by $1000 how will you feel” “ another bidder has made a better offer”
Massive lack of transparency, misleading happens because “another bidder” is trotted out even when there is no other bidder. Worse than the old days of auction when a tree could make a bid, at least you could see the tree!
Every agency handles private sales differently, each agent can be a wild card. Yes, they work for the seller however private sale lacks the transparency of auction, and requires government intervention more than auction.
TRANSPARENCY USING ZOOM
I recently bid for a home for a client using zoom. It was streets ahead of ‘sealed envelope’ or the silent auction that agents use. I could see the other bidder, see their offer, no smoke and mirrors here. Of course, the other bidder could have been a plant but the visibility, seeing the anxiety, made my buyer feel better, made my strategy clearer.
Did we pay more than we wanted? Yes. Did we go over the Seller reserve? Yes. But we were okay with that because we got the house, we could afford the extra, and for the other buyer, well, they could see us too.
AUCTIONS V PRIVATE SALE – THE NUMBERS
Are there more auctions in Melbourne than private sales? The REIV releases figures each week. How many auctions were reported, how many sold/passed in/ withdrew etc. They also release private sales. This doesn’t cover every agent, everywhere, it covers REIV members only. However, it would be a fair representation statistically.
Last week, there were 991auctions reported and 595 private sales. I can just about guarantee that more buyers were happier post auction than post private sale. Why? Because they could see the process, see the bidders, see who was happy, who was sad, who walked away in frustration. The point being – they could see, it was as transparent as a sales process can be for a major purchase for both the buyer AND the seller.
Real estate is an expensive purchase. It is emotionally charged. For those of us who work in the industry, we understand the process, most of us understand that we work for our client. In my case, I work for one client either buying or selling. Sometimes they do both. It is clear who my client is, whose side I am on.
Salespeople technically work for the seller. Buyers believe that the agent interacts with them and can feel mislead as to who the agent is working for. It’s about perception. Make no mistake, the seller is paying the bill, and the agent works for the money. The agent has a job to do: market the home to get maximum interest, generate competition, get the best outcome for the client, the seller. Perhaps we need to make this clearer.
When you buy a car, who do you think the salesperson is working for?
When you buy a couch, a TV, the latest airfryer, who do you think the salesperson is working for?
If you buy, they get paid.
Real estate is the same with a bigger budget, longer lead in time to purchase, and more risk. Being transparent in real estate, being genuine, being honest, depends on who is paying the bill. Sad, but true in most cases. Agents can be friendly, build rapport with you, help you even, but they are always (or should be) working for their client. The lack of transparency you feel as a buyer at auction, or private sale, is because you missed out and don’t understand how real estate works.
Call me if you really want someone on your side, and your side alone.
