by Michael Eroz Property Analyst www.zeroagents.com.au
Conditioning a property owner is one technique real estate agents use to try and get a deal.
This is a very manipulative technique many agents use. More distressing is the fact that as an industry many of the franchise groups actually run structured training courses for their staff on this technique. The basics of this technique are:
- They accept the price you want to list the property at. Some will even inflate the worth to secure the listing. Their goal over the next 4 weeks is to condition you to accept far less money. A cheaper sale price always makes the agents job simpler.
- They then work on providing feedback to you from any open homes or inspections which basically says that everyone who has inspected the property believes that it is overpriced. They may convince a few potential buyers to submit offers which are significantly less than what the owner is after. They do this – knowing the owner won’t accept it, but nevertheless will convince some buyer they may have a chance with that offer. The damage this causes is that they are also conditioning a potential buyer not to pay the real value of the property – and the last thing a buyer wants to do is pay too much.
- The agent has built a relationship with the property owner that is far stronger than any individual buyer who may make an enquiry. It is easier for them to condition the property owner to accept a lower price than it is for them to get a better price from the potential buyer. (Even when the buyer could have been very prepared to pay more.) An agents negotiation skill is usually far more tuned to get a seller to lower their expectation then it is to get a buyer to raise their expectation on price.
- Now that the owner has received a really offensive cheap offer or offers, the agent hopes that the property owner will now accept less than what they originally wanted because the owner will see any subsequent offers as being considerably better than what they were offered previously.
- It’s deceptive behaviour designed to make the property owner accept less and therefore the agent gets a sale and gets paid.
- Auctions support this conditioning process extremely well – the agent gives potential buyers significantly lower expectations to try and encourage a crowd for the auction – then when the auction does not achieve the property owners expectation – the agent puts their hands in the air and says – “it’s the market that values your property – you should accept less – that’s what the market is saying”