Fishing lures are great for the squeamish amongst us. Using movement, vibration and flashy colours, they attract fish to the hook, without the person fishing ever getting their hands dirty. No need for using bait with any substance and best of all, the same lure can be used time and time again.
While the average property owner is far smarter than the average fish, the lures a substandard agent uses can be equally compelling.
Take for example the agent who provides a high estimated selling price at the appraisal stage. With the home close to most people’s hearts, our naturally biased view of how our property compares to other properties makes us susceptible to flattery. It’s tempting indeed to believe the agent who quotes a selling estimate tens or even hundreds of thousands of dollars higher than other agent’s opinion.
Here’s the catch. No agent is capable of accurately predicting the eventual sales price – that’s why it’s called an estimate. The eventual sales price will be affected by a range of variables, including other concurrent sales in the area, how many buyers are competing, how much they have to spend and perhaps most importantly, how emotionally invested they become in the outcome. Crystal ball gazing is not actually the agent’s job anyway. The role of the agent is to effectively market the property over the campaign, drawing as many interested parties together in active competition.
Taking the bait of a high selling estimate is fraught with danger. To give you one example, we secured an unconditional offer on a property at $4.2million – well above expected market value based on comparable sales results. But having already taken the lure of a higher selling estimate, the vendors rejected this offer. Months later, the same property sold through the other agent for $3.6million.
If it were possible to offer advice to fish, I would suggest being cautious of anything that looks too good to be true. To home owners, the message is that bait doesn’t only come on the end of a fish hook.