21 Jul Love Price – Peter Hutton
You will have heard agents talk about getting a premium price for a property – it is language they use to secure a listing. In today’s show we talk to Peter Hutton, Brisbane real estate agent and the author of the book, “The Best Price For Your Home is the Love Price.”
Kevin: I want to chat about a book that I’ve been thumbing through for the last couple of weeks. It’s called “The Best Price For Your Home is the Love Price.” It’s written by a Brisbane real estate agent, Peter Hutton, who joins me.
Peter: Good day, Kevin.
Kevin: Good to be talking to you again, mate. A great read. As I said, I’ve been looking through the book for the last couple of weeks. It’s a book that you’ve written as an agent, I guess, with some inside knowledge but from your experience about where agents and sellers can go wrong. You call it getting the love price. What do you mean by the love price?
Peter: I thought long and hard over the years why some buyers pay more than other buyers. My realization – quite a few years ago, and it really helped my clients – was that similar properties often don’t sell for a similar price. When I realized that, Kevin, I went looking for why that is, and what it is is it’s emotion.
The love price is about love, actually, and when a buyer falls in love with a property, they often put their budget aside, they put their rationale thinking aside. That emotion drives them to acquire that property.
Kevin: Great agents, Peter, can actually tap into that emotion, though, can’t they? It’s not just the property and the buyer; the agent plays a pretty important part in that.
Peter: A very important part, actually. Just putting a sold sticker up on a sign doesn’t represent, in my mind, and in my experience, success in terms of getting the very highest price for a homeowner. The agent has a big part to play in that, and moving a buyer up that what I call that process of emotional momentum, building that momentum so that they make a buying decision, and pushing forward in that negotiation process for every last cent.
I guess there will be a few buyers listening today, Kevin, who may not like to hear this, but that’s the truth. Our job is to look after the seller. We’re employed by them, we’re there to protect their interests. Really, we have to get the last cent for that property.
Kevin: I think that’s one of the reasons why buyer’s agents are becoming more accepted around Australia is that the skill of the agent in working for the seller is now getting much better all the time, and I think that buyers are looking to counter that in some ways. That’s where buyer’s agents are coming in, Peter.
Peter: Yes, I think so. Similar representations. Look, I’ll say this. I saw an old buyer who bought a property from me years ago – and I talk about this in the book – and it was advertised by another agency – long story short – for offers over $1 million. The sale was concluded at $1.425 million, and during that whole process, I had to hold the hand of my buyer and allow that emotion to drive them forward.
A few years forward in time, I ran into that buyer in Cole Shopping Center in Mercer Village, and he was delighted to see me. He paid top dollar for that property, but you see, what he got was it’s a home for his family and they love it. Yes, he paid more than the other buyers might have paid, but he’s been in that property, now, for over five years and absolutely adores it. Their life is there. It’s worth every cent. What price do you put on happiness?
Kevin: Peter, just moving away from buyers for a moment and getting back to sellers, there are two key things, in my opinion, the seller needs to do apart from making sure that their property is presented in the best light, of course, and that is choosing the best method of sale and, of course, the best agent. Are they both as important as each other, or do you think there’s one more important than the other?
Peter: It’s a really good question. I actually think they’re both very important, but here’s the problem, Kevin. Most people think two-dimensionally about the method, for instance, and what I mean by that is they think in terms of auctions versus private treaty, to give you an example, and that’s a very two-dimensional way of looking at method. Method is a lot more than that.
Selling real estate is dynamic, and there are a lot of influences on price. You have to actually marry up the right method with the owner that matches them. You have to look at the property, you have to look at the market that property is in, the market at the time, the competition that’s out there from other properties that are on sale. You have to look at supply and demand issues and all of those things.
Method is critical, and obviously, best agent is critical. I think the biggest problem with choosing an agent is it’s the default setting of most consumers, not just in real estate, but in consumers of all products and services. Our default setting is we tend to look towards the familiar brands out there and because they’re familiar, they have the most “for sale” signs up, they must be the best. Now, that’s actually, again, a very two-dimensional way of looking at what is the best agent.
The question is, how do you define the best agent? What vendors need to understand is how to actually define an agent.
Kevin: Yes, we might get to that in a moment because I want to refer a little bit later in our conversation to that survey that was released by CoreLogic during the week that I think gives us a great insight as to how to choose that agent.
A very interesting point you make, though, Peter, and that is the brand – which is why a lot of agents are attracted to a big brand – will actually get you inside the door, but it’s actually the skill of the agent in locking that listing up once they’re inside the door.
The brand will only get them in there; the skill of the agent then has to come into play to actually secure the listing.
Peter: Look, absolutely. There are a lot of big, successful brands out there, and they do get their foot into more doors. Because of that, they’ve got more salespeople per office, generally, the big brands, and then owners are, I guess, more open to their point of view because they’re the biggest so they must be the best.
What I say to sellers is you have to be a lot more discerning. If you really want to get the love price and get that really top price, firstly, you need to understand how that price is going to be created, the agent needs to be able to explain that to me methodically, really explain it deeply, and then, also, the agent needs to be able to demonstrate that they have the prowess to do it.
Kevin: We’ll take a quick break, now, and when we come back, I’ll continue my talk with Peter Hutton, and we’ll talk about his pitch to buyers. This is Real Estate Talk.