To avoid paying out REN’s commissions, owners will try to sell on their own. However, doing it on their own can be quite challenging in getting buyers – RENs have the marketing reach that owners do not have.
RENs (unlike owners) are more willing to spend a lot on marketing to get buyers as they will get commissions for every sale. Secondly, owners do not have access to a lot of property portals where only RENs can advertise. RENs can rely on their many REN friends to help them to source for buyers.
Owners who engage RENs to sell their property may also face difficulties in getting interested buyers. One reason is they ignore the professional advice of their RENs. Secondly, owners do not know the psychology of their RENS i.e. what makes them want to go all out to sell their property!
In this article, I’ll discuss the mistakes made by owners when dealing with their RENs.
Here is a list of mistakes made by owners:
1.Owners want to sell as high as possible but too often ask for an unrealistic high price.
Here is what their RENs don’t tell them – why pour money into marketing or put in effort to market an overpriced property that cannot attract buyers? They will just do the basic advertising or sometimes no advertising until the owners finally agrees to lower the price down to the market price, which may be months or sometimes over a year.
Owners must know that most buyers are not willing or unable to fork out the difference between the high asking price and bank value since they already have to pay for 10% down payment, legal fees and stamp duties etc. As a result, buyers cannot get their loan approved if they do not pay the difference.
2. Owners refused to sign the REN’s Authorisation to Sell form specifying the agreed commission. They will sign the form only when the REN gets him a buyer. Big mistake.
With the form signed, RENs are not sure whether they will get the verbally agreed commission when the sale is made. Who knows owner may then negotiate for a lower commission rate or sometimes even refused to pay the commission at all.
There are cases where the buyer may cut off the REN after viewing the property and deal directly with the owner. They hope to get a lower asking price by asking the owner not to pay commission to the REN.
Because of insecurity, a lot of RENs will not spend their resources and time in marketing the property. He will also not want to utilise his REN network since he cannot guarantee to his fellow REN whether the commission will be paid.
3. Owners do not want to give exclusivity to sell to a particular REN. They prefer to engage several RENs to sell for him – more RENs will bring more buyers.
However, a REN with an exclusive listing are very pressured to find buyers. He will do what it takes to get buyers. He will put in the time and lots of money for marketing. Furthermore, with an exclusive listing, his army of RENs will be very willing to help him find buyers.
If owners are willing to consider giving exclusivity, he should look for reputable REN to sell his property.
4. Owners do not allow RENs to view their property. Without viewing, a REN cannot get familiarised with the property and offer suggestions for improvements (see point 6 below) before bringing in prospective buyers. They cannot get to take good pictures as nice pictures attract prospective buyers to look at the ads.
RENs who have not viewed the property are not so enthusiastic in their marketing.
They are normally not confident in answering questions or give good reviews to convince prospects to view the property.
5. Owners do not provide the document of title to the REN to ascertain the ownership of the property. In case of joint ownership, the REN will ask for the Authorisation to Sell form to be signed by both the joint owners.
There are cases where one of the spouse did not sign the form and thus may refuse to sell when it was discovered that his or her other half had committed to sell to a buyer. Time is wasted and the REN got a deserved shelling from the buyer!
6. Did not follow his REN advice to clean up the property or make the necessary repairs (hairline cracks, leaking pipes, repaint the dirty walls etc.). Prospective buyers will find such excuses to drive down the asking price.
7. Due to privacy issues, owners may not allow RENs to hang banners in front of their property. However, banners is one of the most effective ways to attract genuine buyers.
Lastly, get an area specialist if you want to sell your property faster. Specialists and their REN friends normally have a lot potential buyers sourced from their ads for their numerous properties in the same area.