Lets talk about the Elephant in the Room: can you trust a real estate agent?
I’ve been working on an exciting project over the last 12 months, it’s a podcast that explores buyer behaviour and we’ve been interviewing sales agents and auctioneers to find out the specific strategies and tactics they employ to influence property buyers. It’s really got me pondering the question: can you trust a real estate agent? I thought I knew all the tricks but I’ve been amazed at what I’ve learnt!
The podcast is called The Elephant in the Room and you’ll find the link here: The Elephant In The Room Property Podcast
Now, there’s a current movement amongst the better sales agents towards professionalism and buyer engagement. All in all, I think this is a very positive move, however I must warn property buyers that even in the face of increasing levels of professionalism, there are some compelling reasons why you can’t trust real estate agents.
Buyers need to understand that sales agents are in a quest to make themselves and their services more relevant, particularly as they contemplate potential disruptors to their industry. Many professional agents are now taking specific steps to assist buyers even when the buyer is interested in a property that they are not selling themselves. And buyers are often happy to get free advice, so they’ll lap it up.
The thing is, an agent’s advice will differ depending on whether they are selling the property or another agent is selling it. Many agents I’ve been speaking to explain how they advise buyers who are looking at another agent’s properties. They will be more objective. They will point out the pros and cons.
But when it’s their own listing they are not going to quite as objective in the way that they represent it to a buyer. Even the best intentioned agents can’t help but be biased because their livelihood depends on a sale. They are more focused on objection handling and emphasising the positives rather than dwelling too much on the negatives.
So it’s important to realise that if an agent has been giving you free advice on other listings in the area, they have been building your trust over that period of time. So you’re guard is down. When they have a listing that suits your needs you are going to be less judgemental and therefore less objective in your assessment of the property. This can also weaken your negotiation stance. This is why you need to be careful. Very good agents are very good at influencing you.
So the next time you find yourself getting free advice, you have to really consider how much is that free advice really costing you?
I’m not here to say that sales agents are bad. They have a job to do and that is to sell the listings that they have. Working with and gaining the trust of buyers is part and parcel of that process. They also have an image problem and in some cases this is well-deserved. So there is a new breed of agent, if you like that is really focusing on buyer engagement and influencing strategies.
To be successful, buyers need to understand what they can believe and who they shouldn’t believe. They need to understand what’s really going on. The mistake that many buyers make is that they don’t know when to believe the agent and when not to believe the agent. The safest way, of course, is to engage somebody to act on your behalf.
But if you prefer to go it alone, share the love. Make sure you get an equal level of service from a number of agents in your chosen area. Then compare what they all say about any property you are interested in.
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Published: 6 June 2018
Updated: 2 October 2019
DISCLAIMER: The additional blogs included in this post and the video are intended to be of a general nature. Please contact us for advice that is specific to your individual circumstances. You may also need to get advice from other professionals such as an accountant, mortgage broker, financial planner or solicitor.