So what’s the feedback?
Have you like me, been on the receiving end of a telephone call from an agent in the days following an open home?
Too often in my experience I find I’m asked to provide what the agent describes as ‘feedback’. This is often couched in terms of "it would be very helpful for the vendor to get some feedback as to your thoughts on the selling price".
If at the time of these calls I feel confident, I have occasionally used a drop-dead response which was shared with me some months ago - give it a try sometime! “what value is my indication of selling price, surely the vendor trusts that with your skills and experience you will already have provided a guidance of the selling price – do they really want to know that you have got it wrong?”
Whilst somewhat flippant in its tone, there is a serious side to this interchange between agent and prospective buyer. In my judgment feedback is valuable, but only in a subjective sense. It should be of great value for an agent to hear that I judged that the property was ‘bigger / smaller’ than I thought. That it was in a ‘great / dreadful’ location,. That the condition and presentation ‘met / did not meet’ expectation. These and many other similar pieces of feedback would to my mind be valuable pointers for the agent to be able to make suggestions as to other properties that might be of appeal, as well as providing vendor feedback as to how people felt about their property.
Why then is there this fixation with agents with trying to get an assessment of the likely selling price from prospective buyers? If, as is the case with most property for sale these days being marketed without a price, does the agent genuinely want you to take a stab in the dark as to a selling price? If the agent has assessed the property at say $590,000 and I say to the agent that I think it is likely to sell for $500,000 at one extreme or $750,000 at the other extreme – the question is, what exactly is the agent going to do with this information?
I don’t think they are going to go back to the vendor and say “we had a response from someone at the open home who thinks it will sell for $750,000” nor for the price point of $500,000. After all, the vendor has judged that the agent they appointed to sell their house has the requisite skills to be able to judge the current market price for their property.
Let's remember that under the Real Estate Agents Authority code of conduct an agent when taking on a listings agreement with a seller must provide a written Comparative Market Assessment (CMA) for the property. This is detailed in the NZ Residential Property Agents Agreements Guide (download copy).
This assessment must use available statistics and market knowledge to come up with a price at which the property should sell in today’s market. This CMA is not a contractual guarantee. Clearly factors outside the control of the agent, may result in the property selling at a level above or below the CMA. Although one would hope that the variance would be small – say within 5 to 10%.
I have expressed frustration in the past in regard to the lack of pricing in the advertising of property for sale in NZ, especially the case in Auckland. Every property being marketed by an agent in NZ has a CMA assessment. It is not a registered valuation, but with the skills and requisite data available to all agents it should be the case that a CMA and a registered valuation are pretty close. Given that, and given the fact that valuations are often undertaken by buyers for finance reasons there almost seems a logic in making the CMA a price indicator for property being marketed.
Before I get a thousand emails from agents telling me that it is wrong to provide a price indication to buyer, let's be clear here – I am talking of a ‘price indication’, not a ‘retail price’. I am sure it is clear and well understood that a price indication on a property is just that - an indication. The vendor can decide to accept any offer they choose at any price they choose and having a price advertised on a property does not mean that the property can be bought at that price regardless. If there is competitive demand for a property then it could well sell for more than the indicative price if the competing buyers judge that to them, the property represents added value beyond the indicative price. Equally should the obverse occur in such as a situation where there is less demand and thereby the property sells below indicative price.
I feel this whole opacity in regard to price indications of property and the desire for feedback does nothing for the industry’s credibility for openness and transparency. I believe it is something that needs more discussion.