Every home buyer and seller is being mislead about the data behind auction clearance rates and selling and buying property by real estate.
The Seller Lie
Real Estate agents are trained to con sellers into marketing their property by way of Auction. The truth is the only person that wins is the agent. If you’ve been looking around at the market, there are hundreds of properties transacting off market which means they are not advertised. These properties are achieving brilliant prices. The con with auctions is the seller is paying $5-10K+ in unnecessary marketing costs and all this does is promote the agent and not the property. This is at the seller’s expense. The seller is told that it’s hard to put a price on the property because it’s unique or some type of rubbish. They are promoting the property for less than you will accept. The agent is attracting buyers that cannot afford your home.
“If an agent asks you to spend $1,000 on an auction campaign reject them and say if you are so confident in your ability you pay the marketing costs”. It’s guaranteed they won’t. So why should you?
The Buyer Lie
Buyers are quoted a price the seller will never sell for. Isn’t this illegal? YES, it is! A buyer spends thousands of dollars on inspection and legal fees on properties that they were never ever able to afford. If an agent quotes us a price, we instantly add 10 – 20% on that price as this is the true value of the property. Buyers unrepresented should be doing this too. No wonder the industry has a bad name.
“If an agent quotes you a price guide you must add 10-20% on top of that price. This is what the property is worth”.
According to the Cambridge English Dictionary, the definition of an auction sale is the goods or property being sold to the highest bidder at the falling of a hammer. This is not how the real estate industry calculate the results. Every week you are being misled by considerable numbers of high clearance rates. It is all lies. The calculations agents use are properties sold prior to auction, on auction day and after the auction has concluded. Don’t be fooled. If you remove all the properties that sold before and after this clearance rate the true rate is at least 20% higher in the statistics. So as an example, a published rate of 80% clearance rate is truthfully 60% or less.