by Grant Wakelin
From time to time we go onto the TradeMe real estate forum and answer questions and offer advice for users. Today we looked at questions regarding advertising descriptions that was really about a stalled sales process, whether to make a cheeky offer or not, and how to manage the decision making on a tender.
The first user question we tackled was asking about advertising descriptions:
When listing a property for sale, is there any clause which say that the description the agent writes up HAS to be used, or can we, as the home owners write our own and request they use it?
A little further down the discussion thread some more clarification was added that really identified the issue:
Thanks all for your comments and advice. It has been on the market for a while and we just want to make the advert more appealing to prospective buyers.
The question really was asking how do they get things moving. Without the specific details available we provided this general response:
There is nothing stopping you giving suggestions to the agent on the description, particularly if there is some feature/benefit that is not highlighted. But, it sounds like the issue is more that nothing is happening in the sale process.
It is your home and the agent is hired by you as the expert to get your home sold. Hold them accountable for results. Ask why nothing is happening? What is the feedback from buyers? Review the marketing with them - what are they suggesting be done differently? Is it the price (that's always first on the agenda of course), but it could be pictures - they are the most important aspect of the advertising. Is the targeting? It is unlikely the description is causing issues, unless there is something in there that horrifies buyers.
You know the definition of insanity. Time to do something different.
In this blog we outlined some suggestions for how to get a stale selling program kick started again. The most important thing however, is to logically and objectively review the situation and do something different. You cannot create buyers when none exist of course, but you can constantly refresh and represent the advertising to get the attention of the buyers who are active.
Another question we zeroed in on was from a first home buyer:
I'm looking at putting in an offer for a house I quite like. First home buyer, so there's a lot for me to learn. In the listing it says "Negotiable over $269". So if I was to put in an offer, would it look stupid to, say, put in an offer for $260. Or do I start with $269. ? Silly question I know. . . . .
Our response was really about taking a step back to look at the overall situation and try and avoid being too “smart”. Emotions come into play when negotiating and you want to leverage them to your advantage - being too cheeky and insulting an owner will probably not work in your favour! Here is what we said to them:
Any price quoted in an advert has to be something that the owner would at least "seriously consider" - it doesn't mean they would accept it, but if you made a cash offer at the asking price and they didn't you could ask some questions of the agent (quote the Fair Trading Act for one).
However, it is still an asking price and you should offer what you think is a sensible market price for the property. The owner can decide to simply reject or start to negotiate with a counter proposal as they can with any offer. I suspect you would not have wasted your time looking at a property if the owners was firm on a price that was well above your perception of market value.
So it is really a question of negotiating strategy - if the asking price is fair are you prepared to be rejected out-of-hand and potentially viewed with suspicion going forward by coming back with another offer, or will starting at the asking price (and even holding firm if required) be a better win-win approach?
The final question we spent time on (for this article anyway) was an interesting one about decision pressure. There is a lot of interest in auctions these days and the related non-price sale method, tenders. This user was concerned about whether they would be pressured into making a quick decision:
Can anyone tell me how long you have to decide about whether to accept/decline tenders received in a closed tender situation? We don't want the RE Agent to pressure us into making a quick decision which we may then regret.
What we were really trying to communicate to the user in our response was that they are in control with the tender process, and as long as they communicate clearly to other parties (including their agent) they can, and should, pretty much set it up the way that works best for them.
The tender document will normally stipulate how long the offers from buyers have to be valid for. You should make sure the tender documents are reviewed by your lawyer prior to launching the marketing campaign. If allowing time to objectively consider things is a worry for you make sure he/she factors that into it. Also, tell your agent that you will need some time (it is best to have that defined, eg 1 work day or whatever) so that they can set expectations with buyers.
One way to help position this is to tell your agent that you wish to review any offers with your lawyer and that you will need at least 1 full working day to achieve that. That way they can set up the tender submission deadline to accommodate that and ensure buyers are aware.
You do not have to make a split second decision and you are sensible in wanting time to consider things. The most important thing is to make sure buyers know what the process is going to be. It is surprises and uncertainty that causes issues not taking time to be careful and considered in your decision.
What we probably should have added to reassure the user is that one of their decisions could be to negotiate on one or more of the offers - it is not a simple accept/reject decision. They are in the box seat.
They had obviously also made a sensible decision not to sell via auction given their concerns over decision pressure and the time they need to make a proper decision!
It’s an important thing for sellers to realise. They can and should control the sales process. But, in doing that you need to be reasonable and fair to buyers. They do (usually) have alternatives. The key isn’t so much how you want to run things but making sure the process is clear to buyers. It really is surprises that hurt, or silence and uncertainty which can mean the buyer starts assuming the worst. Fear comes from the unknown - clarity is your friend.
If you've got questions we can help with add them in the comments or email us. You can always look for us on the message boards as well. Our user details are fairly obvious!
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