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Terry Ryder: Real Estate without Agents

Discussion in 'Investing Book Reviews' started by Jacque, 29th Jan, 2006.

  1. Jacque

    Jacque Team InvestEd

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    Book Review

    Terry Ryder is a former newspaper editor (Real Estate section of the Qld Courier Mail) and property correspondent (The Australian Financial Review) turned freelance writer and author. He has written specialized articles on property for several Australian newspapers and magazines, including Australian Property Investor. Ryder also runs his own research and publicity consultancy business for developer and agency clients, and prides himself on his devotion to warning consumers about what he refers to as “the perils of the real estate industry”

    What’s it about?

    Real Estate Without Agents is Ryder’s fourth book on the subject of real estate. The blurb on the back cover claims that the book “exposes one of the biggest secrets in real estate- how to buy and sell without agents”.

    The book begins with a foreword by fellow consumer advocate, Neil Jenman, who claims that this “simple but brilliant book” will “annoy (make that terrify) most agents”. The reason being that home sellers will reject the traditional method of selling only through agents and go it alone instead, creating a new real estate boom of private sellers and buyers.

    The book is divided into three parts and my review of key content will cover each of these in more detail. There is also an Introduction on how to use the book and Ryder provides easy to follow flowcharts for specific “Game Plans” on buying and selling real estate. The Game Plans are simple certainly, but provide an effective overview for those readers who don’t know where to begin when the time comes to selling (what is typically) their largest asset.

    Key Content

    Part One: Why not to use an agent

    This section sets out Ryder’s recommended reasons for not employing agents for the selling process. He launches a scathing attack on past criminal and fraudulent behaviour in the industry and is not afraid to name names and quote damning statistics. The book is peppered with references to events and first hand interviews, which only serve to support Ryder’s low opinion of the majority of Australia’s and New Zealand’s real estate agents. He refers to the “Six billion dollar industry that no one really needs”, follows up his arguments with depressing rip-off stories and scams, “insider trading” examples and poor complaint handling anecdotes. He outlines what he believes to be the risks in hiring agents, details the possible financial savings to be made by not using them, and reminds the readers continually of the ease with which property can be privately sold.

    According to Ryder:
    • Auctions should be banned
    • The Open House system presents the most risk with the least chance of success for selling one’s home
    • Agent ineptitude is all too common
    • Dishonesty and an addiction to the “drug commission” currently drives many agents in Australia and New Zealand
    Though the large majority of stories serve to relate poor and mediocre agent behaviour, Ryder does give credit to a few lucky real estate agents, who impressed him with their efficiency and customer service.

    Part Two: How to sell your property privately

    The most substantial section of the book, in terms of content, this part details the selling process step-by-“Ryder style”-step. A set of Twelve Steps is produced, from how to set a realistic price and develop a marketing plan, through to locating buyers and effectively negotiating.

    Ryder provides several examples of successful private sales, where sellers have achieved prices above agent predictions. He stresses the benefits of using an independent valuer, paying close attention to home presentation, and setting out an effective marketing strategy to capture the widest circle of buyers. Again, supporting his beliefs with positive case studies, Ryder manages to make the selling process sound easily attainable for most readers who are considering selling a property.

    Agent advertising practices are in for a particular beating, as Ryder exposes advertising kickback stories and shameless self promotion examples in vendor paid ads. He cites examples of unnecessary vendor bills being rung up by apathetic agents, who bump up the advertising costs in the small print of listing agreements, with little care for the consumer and how much they stand to lose financially.

    Ryder advocates the following for a successful sale:
    • Using your personal network extensively
    • Understanding and following the basic rules of negotiation
    • Avoiding common mistakes such as; overpricing, selling first before buying elsewhere, not being readily accessible to potential buyers, playing silly “games” that may backfire and not emphasizing the home’s strongest points
    Though not a fan of services that assist private sellers, Ryder does acknowledge their existence and gives a decent plug to those whom he obviously has had a positive experience with, in both Australia and New Zealand.

    Part Three: How to buy a property privately

    Ryder speaks from personal experience when he believes that dealing with private sellers involves more directness, honesty and better information. Of his four private purchases, all his dealings were positive and saved him valuable time. His main points for purchasing privately include his beliefs that:
    • Private sellers have more room to negotiate
    • The impact of commissions means that both buyers and sellers can save
    • The argument that real estate institutes use for employing a selling agent, for reasons of “consumer protection”, is actually a fallacy
    • Agents’ advice to buyers is clouded by a clear conflict of interest
    • There are enough costs associated with buying and selling real estate already without the addition of selling agents fees and excessive marketing costs
    This section goes on to suggest effective methods for canvassing private sellers, including the possibility of employing a buyers’ agent for those purchasers who lack time or inclination to conduct the search themselves.

    The book concludes with a useful glossary of common real estate abbreviations and terms, alongside an impressive 30 page reference guide.

    Recommendation

    Ryder is clearly no fan of real estate agents, and makes it crystal clear in this book. Though his examples obviously paint the picture of a highly troubled and unethical industry, I felt he was especially harsh with some of his generalisations about agents, leading readers to conclude that only the odd agent is indeed hard-working and genuinely doing their best.

    Despite this, however, the book is highly readable, as Ryder possesses an easy penmanship when it comes to writing. The case studies throughout maintain reader interest, and the ideas for private selling, in particular, are quite thorough and worthwhile.

    If you’ve never considered privately selling, I believe this book may just set off a burning desire to do so, especially if you’re a DIY type of investor.

    My rating: 8 out of 10
     
    Last edited by a moderator: 12th Jan, 2007