A former real estate professional has lifted the lid on the underhanded strategies employed to extract maximum financial gain from prospective home purchasers. Dion Marsden, who currently operates Marsden Buyers Agents in Melbourne, outlined several critical errors that purchasers frequently commit, thereby enabling estate agents to exploit their lack of market savvy.
Critical Negotiation Errors Exposed
Mr Marsden emphasized that the primary blunder involves buyers neglecting to solicit a counteroffer before increasing their initial bid. He provided a hypothetical scenario where a buyer might offer $700,000 for a property, only for the owner, who is seeking $750,000, to respond by demanding a higher sum.
'So many times the buyer would come back and say okay, $720,000, $730,000, without getting a counteroffer,' Mr Marsden explained to Daily Mail. 'Why would you not ask for a counteroffer? You've just given me $20,000 or $30,000 from your first offer for no gain. Your first offer was a waste of time.'
Inadequate Questioning and Information Gaps
He further noted that numerous buyers 'don't ask basic questions', resulting in insufficient data upon which to base their purchasing decisions. 'They guess and that’s when people get themselves into sticky situations,' Mr Marsden cautioned, highlighting how this lack of inquiry leaves individuals vulnerable during price negotiations.
The Fluid Nature of Reserve Prices
The second significant point raised was that purchasers often fail to comprehend that a reserve price is not a fixed figure. Agents typically establish the reserve shortly before an auction commences, and it can be altered dynamically.
'Let's say the reserve is $1.1million and it passes in $20,000 short. There is nothing stopping a real estate agent from upping the reserve price,' Mr Marsden detailed. 'They can just quickly amend the reserve price and go back out and tell the buyer the reserve is $1.15million and was a little bit higher than expected.'
He stressed that buyers are usually unaware of such adjustments, leading them to negotiate under false pretenses and potentially overpay. 'No it wasn't, you just changed it. The buyer doesn't know that, then they start negotiating and could have bought it for less. It happens. You've got to be a savvy buyer or you'll be taken advantage of and pay way more than you need to.'
Settlement Details and Buyer Motivation
Mr Marsden advised potential buyers to always inquire about settlement specifics, as agents can deduce a purchaser's desperation from this information. 'If you get into any conversations about settlement and you tell them your settlement, then they most probably know you're desperate to buy,' he warned, indicating how such disclosures can weaken one's bargaining position.
Misleading Exclusive Negotiation Rights
Another deceptive practice involves leading buyers to believe they possess exclusive negotiating privileges if a property is passed in at auction. 'What does that mean? It's used as an incentive for buyers to put their hand up and bid,' Mr Marsden remarked.
He clarified that these exclusive rights terminate immediately upon rejection of the reserve price. 'Do you know that if a property is passed in to you, your exclusive right ends the moment you say no to the reserve price. And no-one is going to say yes to the reserve price, that's the worst advice you could ever give.'
Sharing Insights to Empower Buyers
Frustrated by witnessing numerous agents taking advantage of purchasers, Mr Marsden now disseminates his expertise on TikTok. ‘There’s a lot of naive buyers who aren’t good negotiators,’ he observed. ‘I hear so many stories of buyers telling me they bought a property for a great price then you hear the negotiations, and I think they were taken for a ride.’
His mission is to educate the public, ensuring they approach property transactions with greater awareness and negotiation skills to avoid financial exploitation.
