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Agency Myth No.6 “We achieve the best price for your property”

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oranges and apples

This is a boast often made by many an estate agent, but can it be truly substantiated? A boast is an exaggeration, it is not necessarily untrue. However it is certainly an exaggeration and generally a stretching of the fabric of reality.

A little more humility would go a long way to improving public perception of estate agency. I do believe in most circumstances that an agents’ proud boast is given wholeheartedly believing they can achieve what they have stated.

The big problem is that the ‘boast’ cannot be substantiated in most situations, there is no system or standard measurement in place to prove that the ‘sold’ price was the best achievable. The public have an unknowing knowing, their intuition, that this boast cannot be substantiated and is an exaggeration. In the meantime their opinion of estate agents is deflated as a result.

However, it is far easier to see how the boast can be undermined by actual results. As an example, up to 30% of initial agreed sales sadly fall-through. In a large proportion of these cases the completed sale price will be different to the first agreed sale price. If the sale price is higher, the agent had disproved himself first time around by obtaining a better price at second time of asking. If the completed sale price results in a lower figure, the agent has now proved that they have settled for achieving a lower price than they ‘should’ have achieved. Which was benchmarked by the first ‘agreed sale’.

‘Best’ or ‘highest’ are subjective to timing, client motivation or circumstances, the market economy and similar properties available. Of course luck and skill of the agent in marketing and negotiation are important factors. All too often these caveats will be missing turning a well-intentioned statement into a meaningless and dangerous boast.

Often the boast may even be ‘supported’ by a spurious stat such as a percentage of achieved asking price by comparison to other competitors, but the statistic is meaningless drivel. Often comparing apples with oranges and comparing quantities of a barrel with a box! If Agent Z sells one property in a month and achieves full price, should his stat be 100% of asking price achieved, the answer is yes. However, it informs nothing about the value of what he has sold, perhaps the asking price was too low to start with? Can we compare Agent Z with Agent Y who sold 10 properties in the same month, eight at 99% of asking price and two at 95% of asking price? However, Agent Y always values properties 7% higher than Agent Z, his stat would be 98.2%. As a result he would have achieved 105% based on Agent Z’s valuation. Which, if you have not been confused confirms “There are lies, damned lies and statistics” as stated in an oft heard quote!

In my humble opinion, it may not be sexy to mention the caveats, but doing so will temper client expectations and change client perception of the estate agent from salesman to trusted advisor.

Max Fuller is Creator and Founder of the Mutual Pre-Portal Property Platform.