(03) 9020 2905Debt Man column – The West Australian (Business)
April 3, 2010.
Bruce Brammall
Debt Man
There’s more than one way to skin a cat. I love this saying. I love people who live it. It’s an idiom used by those who don’t take no for an answer. They’ll find ways of making things happen.
For those whose incomes depend on actual job completion, getting around impediments is obviously rather important.
It’s a great attitude to life, to your chosen profession. I love it.
Except, of course, when I’m the cat being skinned.
Then I just feel like a right moron. A bit like the scriptwriter who penned “Nobody puts Baby in a corner” for Patrick Swayze to deliver in Dirty Dancing. Shudder. Cringe.
In recent weeks, I was the feline who was not only skinned, but gutted, turned into strings, stretched around an instrument and played.
We sold our home. Or, as Mrs Debtman said just hours later, in uncontrollable tears, “our first home … sob … where we got married … sniffle … where both of our kids were born … where you wrote all your (expletive deleted) books!”
Property. So that means today we’re talking real estate agents.
About half of the people who have sold property will understand how I felt. A bit angry. A bit dirty. A bit scarred.
So there’s no misundertanding, I’m not complaining about the price achieved. If we weren’t happy, we wouldn’t have sold. Simple.
But more so than any other industry, property agents know how to skin cats. Like most salespeople, they can’t feed their own family, or pay their own mortgage, if properties don’t sell.
Agents’ crap repututations come from the misconception that they work “in the best interests of the vendors”. It sounds like they have some sort of ethical obligation. They don’t.
A real estate agent’s duty is to sell the property. Fullstop.
That inevitably means talking up the property value to the buyers. However, more often than they’ll admit, it also means talking down the value of the property to the sellers.
Ultimately, agents don’t care which it is. A property that changes hands for $600,000 is approximately one billion times more valuable to them than one that won’t because the seller wants $640,000 and the buyer won’t pay more than $620,000.
Talking down a seller is known as “conditioning”. It’s not quite the industry’s dirty little secret, but it’s not something they talk about openly.
However, conditioning can take many forms. As I, sadly, found out recently.
Agents can inflate the number of potential buyers. Then withdraw them. On auction day. “Mate, I know we said there were four. But there’s only one here!”
When it comes to skinning cats, agents know a dozen ways to get the job done. They sell other people’s homes every week. Calling them vultures would be unfair to birds. Call them cannibals! They’ll eat most vendors alive and wash them down with “a nice chianti”, like Dr Hannibal Lecter.
Other lessons I’d like to pass on:
- Don’t get rushed. If they try to jam you into a selling timeframe you’re not comfortable with, walk away. If they want you to sell your property when everyone else is (spring and autumn), it’s higly likely they’ll be too busy to look after yours properly.
- Move out during the “opens” period. Particularly if you’ve got kids. Keeping a house clean when you’ve got young’uns is a nightmare. If you can live elsewhere, or go on holiday, go.
- Move your furniture out. Get in the “Vogue” furniture in. It can really make a difference.
- Get an independent valuation. Valuers tend to be conservative. It will give you a baseline for negotiations. (Your might be able to con your bank might do it for free.)
- Don’t back yourself into a corner with a short settlement period, if you’re selling before buying. If you need a longer period to find a new house, make it a condition of sale.
- If you sell first, you won’t be pushed into selling low. You don’t have to settle to get into another place. (But you might get rushed into buying.)
But most importantly, remember that agents skin cats for a living. Remember that when they come to ask you to drop your pants.
Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and a licensed financial adviser. bruce@debtman.com.au .