One real estate trend that appears to have taken hold of late is the use of online sales portals. A system for managing offers, ‘transparency’ is the oft-touted benefit of the various platforms, however it’s worth asking whether there is a mutual benefit here for both buyer and seller or do buyers benefit more from this ‘new system’ than sellers?
Beware lazy agents
When leaving the sale of a home to an online sales portal, real estate agents are leaving it to the online system to manage offers. We believe that sellers should consider whether they want to engage an agent that relies on technology to manage and negotiate offers, instead of having the fundamental skill required to negotiate a satisfactory outcome with buyers. Afterall, isn’t this ultimately what agents are being paid a selling fee for?
People don’t often realise that these portals in fact empower buyers by taking control from the seller or agent and this often has a direct effect on the sales price. The result is often a devaluation of the very property that you are trying to get your best price for.
Vendors would be wise to select an agent that has the skills to negotiate and that isn’t too lazy, or busy, to manage the process of offers personally – afterall, this is what we are paid to do. Using an agent that uses a portal isn’t great value when you consider the considerable fee paid by a vendor to sell a house.
The danger of removing the FOMO factor
Online sales portals allow buyers to see if there are other offers and they will even rank the strength of an offer without revealing specific dollar values. Removing the ‘fear of missing out’ factor can have a direct impact on the sales price achieved.
A case study
We have had direct feedback from someone recently, that bought their new home from an agent that used an online sales portal.
After putting in an offer through a sales portal (and putting their best foot forward on the agent’s instruction), the couple missed out on the property. Not to be dissuaded, they found a second house that the same agent was selling but, this time, they didn’t put their best offer forward in the first instance – instead, they monitored the system right up the close-off of offers. They gamed the system by increasing their offer by small increments and, at the last minute, put in a bid that got them over the line. Crucially, they think they underpaid for the home by a significant amount.