With prices softening in many of Australia’s capital cities, the Real Estate Buyers Agents of Australia (REBAA) is warning buyers not to succumb to mounting pressure from selling agents.
Last week global investment bank UBS called Australia’s housing boom over after home prices fell in Sydney for the second consecutive month.
REBAA president Rich Harvey said with a softening house price market in several Australian capital city markets, the property pendulum was beginning to swing in favour of buyers.
He said in Sydney he was already beginning to see signs of increasing pressure from selling agents to close deals and apply pressure on buyers to purchase.
“While most selling agents are legitimate operators acting in the best interests of the vendors, in a tightening market some agents feel pressure to make a sale and use shrewd tactics to convince the uneducated buyer about what is a good property,” Mr Harvey said.
“Sometimes these tactics can be extremely covert and unless you’re an experienced property buyer you won’t even know you’re being swayed.
“Many buyers are unaware of the tactics that selling agents use to influence their buying decisions and may inadvertently fall victim to subtle pressure by either overpaying or making an unsuitable purchase.”
References to new unapproved infrastructure improvements, biased and embellished comparable sales data and ‘shopping’ offers between buyers were just some of the unsavoury tactics some selling agents used, said Harvey
“Often it’s just the odd throw away comment that the selling agent drops in conversation to the buyer that ratchets up the buyer’s fear of missing out,” he said.
“At all times, buyers need to remember that selling agents are professional negotiators, they sell property for a living.
“Contrastly, the average buyer buys two properties in a lifetime and lacks the negotiation skills to match an artful selling agent.
“Most times they won’t even know they’ve been manipulated.
“Buyers need to enter negotiations armed with extensive research and with their eyes wide open and if they are unsure, inexperienced, or lack time, get professional and independent advice to ensure they are paying the right price. “
Pressure phrases buyers need to watch out for:
“There’s a second private viewing happening tonight/tomorrow etc.”
“Think how much it would mean to your wife/husband/kids.”
“This is one of a kind/once in a generation/unique.”
“Last chance to buy and settle before Christmas” (particularly relevant now given standard 42-day settlement period).
“There’s lots of interest and the vendor is thinking about moving the auction forward so best to put in your best offer prior.”
“Word on the grapevine is that this area is being considered for rezoning.”
“There’s strong interest in this property so you better get a hurry along with your offer.”
“We’ve issued 15 contracts so we expect the price to go well above reserve.”
“The owner has already rejected $X so you need to be at $Y” – but the unsuspecting buyer doesn’t know if it is a true offer.
“The property is likely to sell over the weekend so you need to make an offer now if you want a chance to own it.”
Pressure tactics buyers need to watch out for:
Reference to new unapproved infrastructure improvements.
Dummy bidders at auction (illegal but it still happens).
Biased comparable sales list.
Embellished comparable sales.
Shopping offers around.
