HOME SELLER “VERY HAPPY” TO LOSE $545,000
Article written and provided by Neil Jenman from Jenman.com.au . To see the original source of this article please click here. https://jenman.com.au/home-seller-very-happy-to-lose-545000/
by Neil Jenman
by Neil Jenman
On January 21 this year (2020), Mrs Lawson, an elderly lady sold her family home in the Sydney suburb of Peakhurst for $880,000. Her agent was a discount agent called Upside Realty.
Eighteen days later, on February 8, the buyer who bought Mrs Lawson’s home for $880,000 re-sold it – in the same condition – for $1,425,000. His agent was a traditional agent, First National Real Estate Hurstville.
Upside Realty bills itself as having agents across Australia that charge “no commission”. On their web site, they say: “We get you a great price, give fabulous service and charge a low fixed fee regardless of selling price.
So, of course, they do charge commission. They just call it a ‘fee’. The fee is the same regardless of the price of your home.
Mrs Lawson reportedly paid Upside Realty $8,900 to sell her home for $880,000. A typical agent would have charged as much as $22,000. Therefore, as Upside Realty likes to boast, Mrs Lawson “saved” about $13,000 in commission. On its website Upside Realty has a calculator which shows potential sellers how much they “save” with Upside.
In Mrs Lawson’s case, however, there was a major downside with Upside: Her home was short-sold by $545,000. There is no calculator on the Upside Realty website showing how much homes may be short-sold due to the lack of negotiation skill by Upside Realty sales agents.
When the amount by which her home was short-sold ($545,000) is added to the fee she paid ($8,900), the true cost for Mrs Lawson to sell her home with Upside Realty was $553,800.
But, as the agent repeatedly said, “She was very happy.”
Well, of course she was happy. Like thousands of sellers, she did not realise her home could have sold for more. Nor, apparently, did Upside Realty.
In a conversation with Jim Grigoriou, author of a soon-to-be-published book called ‘The Real Estate Short Sell’, the agent said “The buyer found out it was a potential development site. We did not know that.”
But, again, the agent repeated that the owner was “very happy.”
The danger for sellers with using a discount agent is that agents who accept a low fee may sell homes for low prices. There is a saying in the real estate world, “If they can’t negotiate a good fee for themselves, how are they going to negotiate a good price for their sellers.”
According to its website, the managing director of Upside Realty is Adam Rigby described as a “serial entrepreneur”. Under his photograph it says: “We get you a great price, give fabulous service and charge a fair fee. It’s the way real estate should be.”
Mr Rigby has given many interviews to the media saying that Upside Realty’s salespeople get the “highest price” for sellers.
But despite several attempts to reach Adam Rigby over the past week by both email and phone, there has been no reply.
When selling your home, Upside Realty suggest that “the best way to get to know our agents is to read their reviews on Rate My Agent”.
What most sellers do not realise is that Rate My Agent is paid by agents. From 750,000 reviews on Rate My Agent, try finding one bad review. Or, try leaving a bad review.
According to Roy Morgan, the independent (not paid by agents) respected research company, around 92 per cent of consumers do not trust real estate agents. But, according to Rate My Agent, three-quarters of a million consumers love real estate agents.
As Jim Grigoriou writes in his new book, “Rate My Agent make the auction clearance rates look honest.”
For sure, there may be many cases where Upside Realty save sellers a lot of money. For sure, they may often do the same as the traditional agents and charge less.
But the true test of the worth of any company is what happens when something goes wrong. In this case, a trusting elderly lady seems to have short-sold her home by more than half a million dollars.
How can this happen?
Mr Rigby, are you there?
Until such time as the managing director of Upside Realty addresses this issue, perhaps all sellers need to proceed with great caution when choosing this “no commission” agency.
As Mrs Lawson is soon to discover, her “no commission” deal was very expensive.