Agencies’ bait and switch approach grows in tempered market conditions

In an interesting twist in the current market conditions, we’re continuing to see a steady stream of properties being promoted across each area as ‘off-market’. There are varying iterations of what off-market sales mean, with some properties being exclusively available to a select group of qualified buyers, while others are merely available to select buyers a week before they go live to the broader market. Whatever the expression of the process, what we’ve seen emerge over recent months is numerous agencies providing sellers with wildly unrealistic advice, over-promising access to a pot of magical buyers and inflating expectations to an unachievable outcome.

When we break down the current market dynamics, it’s fair to say that conditions are tilted in favour of buyers. The final weekly auction clearance rate for Sydney has been parked at or below 50% for many months now. However, the number of properties actually selling under the hammer at auction is just 25%, with the remainder either selling prior, passing in or being postponed - highlighting the shallow depth of the buyer pool. These conditions provide time for buyers to consider their positions closely and crystallise their view on value, thereby keeping a cap on property valuations.

This evolving practice of agencies over-promising access to buyers who will simply walk into a property and pay some extraordinary price is simply nonsense. Moreover, it’s a sales tactic to motivate homeowners who aren’t entirely convinced about selling to all of a sudden start preparing their home, invest in an early stage of marketing and then fall into this weird space of being half on the market, which isn’t a good thing in this climate. Like any sales approach, unless you’re committed to making a move, adopting the “I’m only selling when I get the price my agent advised me” strategy is fraught with danger. It exposes your property to the wrong buyers; it can leave you lingering on the market and the feedback you will often receive is disappointing.

Once the negative feedback starts to filter in, we then see such agencies ramp up their rhetoric, claiming they have correctly ‘tested’ the market, and your ambitions are not realistic in this market. The outcome of this feedback is, of course, advice that you need to lower your price. And this isn’t just a subtle price adjustment. In examples we’re aware of, the guides are being lowered by up to $1m. It’s a classic bait and switch strategy used by agents who see trading property like they’re just trading shares – unemotional, transactional and zero client care.

It's ridiculous to assume that buyers can be fooled into paying a premium and that there’s a small pool of buyers who just stumble across a new area and are willing to pay more than any other locally educated buyer. Let’s just break that down into reality. Who wants to pay more for any product ever? Who doesn’t do some due diligence on any purchase, be it going on a holiday, buying a car, assessing school fees or even comparing food prices? Ask yourself, if you walked into a new suburb, would you buy the first house you’ve seen? It’s just farcical stuff, but from the agents who espouse such things, it’s the underlying unethical element that should be discussed, as it’s a wafer-thin sentiment that offers little substance.

As sellers, we can all dream about the ideal buyer coming to purchase our much-loved home, we can all dream that the Chinese buyer will emerge, we can all dream that despite what’s happening around the wider market, our home will be different. But dreaming is not a strategy, it’s not founded on practicality. When the market is running hot, which it certainly isn’t right now, there are far more examples of buyers making less-informed decisions. However, in this climate we’re hearing more and more stories of sellers having poor experiences, achieving outcomes far below their initial promise from the agent and being lulled into a campaign with poor price advice. It’s a reflection of the weak adaptation to rely on adjusting strategies in a changing environment, pray on vulnerability in a harder economic environment and then blame the market for their wrong advice.

At CH, we strive to provide our clients with accurate information and we take the long approach to client relationships. If a client isn’t ready to sell or simply wants a number that isn’t achievable, then this is the commentary we provide. We call it as we see it and we believe in straight talk, even if this costs us business, because we value our community and stand by our advice. So, as we edge towards the closing stages of selling for 2024, if you’re interested in real advice, well-founded information and a strategy to get you sold in a streamlined process, our experienced agents would love to speak with you today.