Something was amiss.
On the phone, I knew it by the tone of his first few words.
This was a property owner whom I had met prior as they were going to sell their home.
He sounded remorseful, “Jonzun, my wife and I like you a lot and we have no doubts you will do a great job. But and there is a big but. You are the most expensive agent of the three we have seen in terms of marketing and commission”.
Have you appointed an agent as yet?
“No, but we are going to. We want to get the most out of this sale as you can understand.”
Yes, of course and I agree with you.
Tell me, Do you want to pay the least for marketing and a lower rate of commission or do you want to maximise the net proceeds?
This is because they are different things. Like what do you want to achieve from your sale
He replied, “Well we want to get the best price and if we pay less for marketing and commission, it means that we will get more from our sale.”
I replied. Well, it seems that way, but not necessarily. Don’t you agree that the goal should be to net the most from the sale?
Yes, that’s what we want.
Great, do you have time for me to come over and discuss this in more detail with you. I will go through real life numbers to show you how to get the most money from your sale?
Hesitantly, he said yes.
You see I think that everyone selling a property should maximise their net returns/bottom line.
No ifs or buts here.
It’s natural to assume that the agent who charges the lowest or a lesser rate of commission and marketing is the better choice.
When I arrived at their house, I could see they were ready to ask me to reduce my commission and marketing costs so they could get the most money from the sale or so they thought. To cut a long story short, I went through the Table below with them.
AGENT COMPARISON EXAMPLE
In the end, I said “Remember, the agent who can get the highest price for your property will achieve the biggest bottom line/net proceeds for you, even if their marketing and commission costs are a lot more than other agents who charge less.”
The “cheapest” agent is the one that gets you the most money net of all costs and not necessarily the one that charges you less for marketing and commission.
After all it is what a seller nets that counts the most and this is a result of the price achieved less marketing costs and commission.
The penny finally dropped.
Almost counter-intuitive.
The highest bottom line or net proceeds is what a seller wants.
Somehow, people automatically assume that if you “pay less, you get more”.
The truth is in real estate, it is usually a case of “pay more, to get more”.
I know this can be a hard concept to get because our natural instinct is to think that if we pay less, we end up with more.
But in real estate, this is not how it works because marketing is a very crucial component of getting or ensuring the best price.
There is a saying that you have to spend money to make money.
The goal of marketing is to expose the property to as many buyers as possible and get competition.
With competition comes the best price.
And when you take away the marketing costs and commission, you get the best bottom line.
Things are not what they seem.
THINGS ARE NOT WHAT THEY SEEM by Jonzun Lee
Jonzun Lee is a trusted Brisbane real estate consultant and Licensed Real Estate Agent. Please contact Jonzun on 0418 885 708 for further information regarding your property needs.
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