Qualifying buyers, the forgotten art ?
Ever since legislation was introduced to tackle the issue of price quoting, debate continues to rage unabated. Is it the agent’s fault ? Not always…and what about the legislation ? How can a price range work when prices are so volatile ? For example, have you ever asked your stockbroker what the price range of a share you wish to purchase is for the next 30 days ? and then blame him or her for under quoting ? and what about agents who are over quoting, do they get punished because the property sells for less not more. Is that misleading or simply their inability to accurately identify micro shifts in consumer confidence or are we talking about longer term trends that can be measured.
So, how did buyers decide what to bid before quoting became common practice ? They simply asked the agent what the property would sell for! Back then, agents would qualify buyer interest and through that process identify price benchmarks which they would openly discuss with buyers and sellers alike. Admittedly, the benchmark would be on the conservative side but at least the buyers and sellers were on the same page. Typically, when an agent is doing his or her follow up either at or after the inspection, they would ask questions such as “ What do you think the house is worth “ or “hypothetically speaking, if you were to make an offer what would that offer be”. Another good question to ask a buyer is “what is your price ceiling for the right property”….the assumption here is that most buyers have budgets dictated by mortgage limits – this is the buyers go to price ( most buyers will bid to their limit for the right property unless there are major renovations or other unforseen set backs ).
By asking these simple questions, agents not only identify who is interested in the property but also what the price level is. Next time you attend an inspection, ask the agent what they think the property will sell for or where is the $$interest is shaping up . The best time to ask this question is not at the beginning but towards the end of the advertising campaign when buyer interest is established and then compare their advice with the result. If the discrepancy is significant you would have to question whether the agent has qualified their buyers or are they simply being misleading. If that is the advice being given to a buyer please spare a thought for the vendor who will be asked to set their reserve price ! Perhaps they should engage an advocate ?
Unfortunately, some agents have become far too reliant on quoting. In fairness to the agent, quoting is ineffective in a volatile market unless it is adjusted to market conditions… Maybe it is time they started qualifying buyers instead.
Rob Millar – 0414 330 179
Domain Property Advocates
If interested in learning more about this update please contact me today!
Tags: advocacy, art, auction results, Auto, Buyer Advocate, buyer interest, domain property, Draft, legislation, mortgage limits, property, property advocates, property prices, Qualifying, range, rob millar, vendor advocate
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