How to protect yourself from “Conditioning”
Definition of “Conditioning”
-a systematic process employed by real estate agents of communicating bad or negative news to the vendors to drive their price expectations down after they have received the listing.
Irrespective of whether it is shortly after you have signed a listing agreement, or your property has remained unsold for a lengthy period of time, you are always susceptible to being conditioned. Protecting yourself from being conditioned should start before you employ an agent. If you are mid campaign and your agent begins to condition you, it can be hard to extricate yourself from that agent, particularly if you have signed a lengthy agreement.
Conditioning is most easily identified in circumstances where the agent bombards you with negative news about your home, usually disguised as buyer feedback. You know you are being conditioned when the agent offers few solutions other than to ‘drop the price’.
To protect yourself from being conditioned by the agent, adopt the following strategies before you sign an agreement:
Only sign a short agency agreement – One of the most powerful elements agents adopt to set up the conditioning of ‘overpriced vendors,’ is trapping them into signing a lengthy listing agreement. If your motivation to sell is high and the listing agreement is long, the agent has all but secured a sale. If the agent has overpriced the home, they will spend the next couple of months whittling the owner’s price expectations down by giving them negative feedback about the property.
By only signing an agency agreement with a short ‘exclusivity period’, you can deliver the ultimate response to an agent who begins to condition you – you can fire them.
Ask for a list of both positive and negative features on your home -A hallmark of conditioning is when an agent praises the property in pursuit of the listing and then highlights every known/possible ‘negative’ once it’s on the market.
The agent will act as though the negative feedback from buyers is a complete shock to them too.
Prior to listing with any agent, ask for a list of the positive and negative features of your home, in writing. Then the agent cannot use any negatives listed against your property later as seemingly new information, to get you to lower the price they originally gave you. Ask the agent, ‘How do you propose to overcome those negatives during the sale?’ It may be prudent to shortlist agents with the best responses to this question.
Select your agent based on strategy not price – If your property is priced correctly, the agent won’t have to condition you – they will be too busy negotiating with buyers. The reason agents have ‘overpriced vendors’ is because they ‘overpriced the listing’ to begin with.
Unfortunately, many home sellers select their agent based on the selling price they quote. The big problem here is that it won’t be the agent who buys your property. Select the agent with the best-selling strategy as opposed to the highest selling price quote.
Many people become angry when they learn that conditioning is a low rank premeditated sales tactic. The key to success is to insure yourself against conditioning before you employ an agent, rather than being left surprised and despondent after giving them the listing.
By Peter O’Malley, author of Inside Real Estate
