‘Magical word’: Sydney real estate agent claims every agent is using this sales tactic

‘Magical word’: Sydney real estate agent claims every agent is using this sales tactic

Sydney real estate agent Amir Jahan has revealed the trick he always tells potential buyers to drive up property prices, claiming all agents do it.

Mr Jahan, 27, is the director of A-Class Estate Agents in Parramatta. He candidly told news.com.au that “every agent has an imaginary buyer” they refer to when trying to sell a property. “Whenever there’s a serious buyer, and they make a serious offer, then we say, ‘You need to hurry up because I’m talking to another buyer, and you’re going to miss out,’” he explained.

“It is a magical phrase and it does work.”

Mr Jahan said he always mentions the threat of another buyer whenever he gets into the negotiation stages with anyone.

“It is a magical phrase – ‘other buyer’ – it only appears when people start asking serious questions. It is like a code,” he said.

According to the Australian Consumer Commission, real estate agents “should be honest in their dealings” and never mislead consumers.

The 27-year-old agent said it is simply a highly effective sales tactic. He also claimed to be “100 per cent positive” that every agent uses it, but most won’t admit to it.

“I had a property six months ago, there wasn’t even a single buyer, then a serious buyer came in and said, ‘I’d like to put in an offer’ and two hours later I called him and said, ‘I have another serious buyer,’” he revealed. Mr Jahan said once you feed a potential buyer the line, they’ll always ask, “how much are they offering?” He’ll usually say he can’t disclose and instead asks the original buyer to counter this imaginary offer. If they agree, they’re actually just bidding against themselves.

“When we know the buyer is serious and likes it, we then use the magic words of ‘the other buyer’ and we increase the price for the vendor,” he said. “From there, it is just about negotiation; sometimes it increases by $50,000. The most I ever got was $70,000, but a lot of buyers will pay more than what they were expecting.”

The agent explained that it’s simply a commonly used sales tactic, and he is sure every industry has its own version of it.

For instance, car salesmen probably have a line they roll out to close deals, and he doesn’t see it as any different from that approach.

“We are just trying to increase the sale price for the vendor,” he argued.

Mr Jahan said if an agent claims they don’t use the tactic, in his opinion that simply means they’re “not a good agent” because they’re not prepared to play the game. “You can’t sell a property if you don’t use that sentence. If you’re an agent and you don’t use it, you’re not a good agent,” he said. Mr Jahan often only uses the sales tactic to get buyers to pay the reserve the vendor is after, and everyone usually walks away happy enough.

“As an agent, it is my job just to be honest and help both parties, the seller and the buyer; the reality is I’m getting paid from the owner and not the buyer,” he said. “If you’re getting paid by someone, you work for them. I’m not saying we’ve got to rip off the buyers, but at the end of the day, I’m getting paid from the vendor.  “My job is to try and achieve the price for them.”

Sydney buyer’s agent Sam Green, who is the director of Advantage Buyers Agent, told news.com.au that agents inventing imaginary buyers is “certainly” something that happens.

“They certainly do it to other buyers, but less likely, to do it to me, but I have no doubt that does happen,” he said.

Mr Green said agents don’t always want to disclose other offers, even if they’re genuine, because they don’t want to enter into a game where people are offering an extra $1,000 here or an extra $1,000 there.

The buyer’s agent said the trick to buying real estate is to focus less on what other people are willing to pay and instead decide what you want to spend. “You’ve got to work out what you’re willing to pay and you should know the market,” he advised.

Mr Green said if you’re ignorant of market value, that is when buyers can end up in a mess. He claimed he recently saw a property go for $1 million more than it was worth because an agent found an eager and cashed-up downsizer who didn’t bother to do enough research.

In his experience, the other reason people end up over-paying is less because they’ve fallen victim to sales tactics and more because buying property is gruelling. Mr Green called the experience “buyer fatigue” and said that after people miss out on a few properties, they become more likely to “pay too much for something because they’re over it” and can’t be bothered.

Mary Madigan, news.com.au