How to Navigate Real Estate Agents When Buying a Property
Updated: Sep 29
Real estate agents work for the vendor, not the buyer, and understanding how they operate can make a real difference at the negotiating table when buying a property. From price tags and underquoting to firm offers and private inspections, here's what's really going on behind the scenes, and how to navigate real estate agents when buying a property.
Why would an agent leave a price tag off the listing?
In Queensland, legislation doesn't require a price tag if a property is going to auction. In Victoria, listings will often just say "contact agent."
Understanding what's typical for the area you're buying in matters here, because property isn't always a science. Agents represent the vendor and are trying to secure the best possible price, so leaving the price off can work in the vendor's favour, since the value becomes whatever a buyer is willing to offer rather than being anchored to a number.
Without a price guide, buyers have to make the extra effort to contact the agent directly, which can put off less serious buyers or bargain hunters. This can actually work in your favour if you're a genuine buyer, since it reduces competition from people who aren't willing to do the legwork.
With a private treaty, you'd usually expect some indication of the vendor's expectations. Auctions are a different game altogether, particularly in Melbourne, where the process can feel like a magician's trick, your attention is diverted while the real work happens elsewhere.
Not having a price on the listing forces buyers to do their own research and look at comparable sales, rather than relying on a third party who's incentivised to get you to pay as much as possible.
What is the psychology behind underquoting auctions?
The saying goes: quote it low and watch it go, quote it high and watch it die.
If a property is overquoted because a vendor has conservative expectations, buyers will assume it will sell at or above that figure, particularly in Melbourne. Setting an accurate expectation can actually cost you buyers, because they'll assume the property behaves like everything else on the market.
In Victoria, an auction quote must be backed by three comparable sales in a Statement of Information. If those comparables aren't genuinely comparable, agents can effectively get away with underquoting. A low quote range draws in a bigger crowd, and when buyers see strong competition, they're more likely to stretch their offer.
South Australia has taken steps to curb underquoting: if a property is quoted at $500,000, the reserve can't be set more than 10% above that figure. This gives buyers more certainty, at least $550,000, the property must sell, even though the exact reserve is often only set on the day.
Want to go deeper on this topic? Listen to Episode 335: Underquoting Exposed - How to Protect Yourself in a Market of Misleading Prices, where we unpack exactly how underquoting works and what you can do to protect yourself when buying a property.
Why do some agents talk in riddles when asked about a price tag?
Agents are paid by the vendor and have a fiduciary obligation to work in the vendor's interest. Telling a buyer the lowest acceptable price would be a disservice to the vendor, the equivalent of an agent asking a buyer's agent how high their client could go.
An agent might be friendly and helpful because they genuinely want to help you buy the property, but they won't show their cards, since the vendor is paying them to secure the best possible outcome. Negotiation is a craft, and part of that craft is building a reputation: a strong sale price makes other vendors take notice and consider using that agent themselves.
Why is it naïve to assume an agent will negotiate exclusively with you when buying a property?
A negotiation moves fastest and produces the best result for the vendor when multiple buyers are involved, so agents are motivated to bring as many buyers into the process as possible. That's simply them doing their job well.
Why do agents take a firm offer and ‘shop it around’ to other interested buyers?
A firm offer typically means a signed contract with consideration attached, whether that's a cheque or an EFT transfer. Once an agent has that offer in hand, they'll often reach out to other interested parties to see if anyone wants to compete.
You can try to limit this by putting a time limit on your offer, though be careful not to burn the offer in the process. This might look like a text warning that the property will be sold by a certain time, an invitation to a boardroom auction, or a straightforward request to beat an existing offer.
Whether other buyers are told the price depends on the sale type: at auction, yes; in a private sale, not necessarily. It's worth asking direct questions: is there real competition, how quickly does this need to wrap up, and do other buyers have the same conditions as you? The best approach is simply to ask good questions.
How the timeframe gets set varies. Some agents follow a standard 24-hour process. If you can meet the vendor's asking price, you might ask to close within three hours, though not every agent will agree to this. It can also help to mention that you have another property in mind if this one falls through.
If an agent tells you not to worry about a formal offer and says they'll "take it verbally," it may mean they already have a signed offer from someone else and are simply gauging your interest as a backup. When an agent is juggling multiple potential buyers, they may ask for a verbal offer or one via text simply to move quickly toward a signed contract with the highest bidder.
Why register for an auction but not make a bid?
Some people register just to observe, or intend to bid but lose their nerve, or didn't do enough research to feel confident about the property's value.
If you're the highest bidder when a property is passed in, you get first right to negotiate with the vendor, and can typically make that offer subject to finance.
In fast paced markets like Melbourne and Sydney, competition is intense and negotiations move quickly.
Why do property buyers sometimes miss out when a property sells prior to auction?
Occasionally this comes down to an agent not doing their job well, though this is rare.
More often, it's because the buyer wasn't clear enough with the agent about their interest. Don't downplay your interest: leave your contact details and explicitly ask to be kept informed and sent the contract. If you hold back, you risk finding out only when the "sold" sticker goes up.
It's also possible the agent didn't tell you about other opportunities that came onto the market around the same time.
Why do some properties sell quickly to someone else, even after you've told the agent you're ready to make an offer?
Sometimes an agent will prioritise a buyer who represents greater ongoing value, for example a trade-in, downsizer or upgrader, because that buyer may also become a future listing for the agent. First-time buyers can occasionally be passed over for this reason.
Being easy and pleasant to deal with matters too: getting on an agent's wrong side rarely works in your favour. Equally, an agent may be wary of buyers whose terms carry more risk, such as those with finance conditions. Some agents will even ask upfront whether you already have pre-approval with a lender in place, and prioritise buyers who can answer yes. A firm pre-approval signals you're ready to act, which makes you a more attractive and lower risk buyer in the agent's eyes.
It's often said that the agents who earn the most aren't necessarily those who get the best price for each vendor, but those who complete the most transactions, getting deals done quickly and consistently. So it pays to present as a reliable, low risk buyer who's easy to work with.
Extending the negotiation or offer acceptance period
Since the agent works for the vendor, an extension usually signals that other potential buyers are being brought into the process. It's not something buyers tend to love, but creating competition to maximise price is part of the agent's job.
Vendors will often try to limit conditions and reduce competition among buyers. If an agent is concerned there's only one genuine buyer, they're more likely to simply proceed with the deal.
There's no legal obligation for an agent to stick to a stated timeframe, the only requirement is that all written offers be passed on to the vendor. Because of this, it's worth being upfront with the agent: ask about their process, whether your offer is being treated as final, and when you can expect to hear back.
Sometimes agents play these situations to their advantage, and it's worth simply noting the experience for future reference. Understanding what you're able to move on, even a small increase, can help. If asked for your best and final offer, put it forward, but don't be surprised if you're asked to go higher again, this happens in the majority of cases.
Why won't some agents offer private inspections?
This could come down to genuine personal circumstances for the vendor, such as a young child or an unwell family member. It could also simply be that the agent is busy, or reluctant to arrange something outside the standard process.
If an agent believes your budget doesn't match the property, or doubts you're a serious buyer, they may be less inclined to accommodate a private inspection. When a property is attracting strong interest, agents will often simply direct everyone to the scheduled open.
Tenanted properties add another layer of complexity, as tenants are entitled to reasonable notice, generally a minimum of seven days, before an inspection can take place.
Why don't some agents call back?
In a fast moving market, properties can sell within days rather than weeks, and agents are often dealing with a high volume of enquiries. Providing consistently excellent service isn't easy, and turnover in the industry is high. Still, timely follow up is one of the fundamentals, and the agents who do it consistently tend to be the ones who succeed.
Why do some agents insist on a signed contract and deposit?
Many buyers assume a verbal offer is sufficient, but practices vary between agencies. Some will accept an email, while others require a signed contract along with a deposit, which can understandably make buyers nervous.
Deposit funds sit in a trust account that agents cannot touch, though it's reasonable to ask for a receipt. If you've submitted a signed offer, the agent is legally required to present it to the vendor.
Some agents and vendors have been burned in the past by buyers who make an offer and then disappear, which is why they may be cautious about accepting anything that isn't in writing.
Why aren't sold prices always disclosed online?
This means the data available to buyers isn't always as reliable as it could be, though there's no legal requirement for agents to disclose this information. Sometimes vendors and buyers simply prefer that friends and family not know the final sale price.
An agent might also be reluctant to share a price that reflects poorly on their negotiation, whether it came in lower than expected or, alternatively, well above what was originally quoted.
For medium to high density apartment buildings, a single low sale can set a precedent for the entire block, and since one agent may manage the majority of listings in that building, they're often hesitant to publicise prices.
It's also worth remembering that headline prices can be misleading: a fully furnished property, a cashback incentive, or a rental guarantee can all affect the real value of a sale, and only someone with access to the contract would know the full picture. Some buyers end up paying more than they realise as a result.
Agents overquoting rental potential for a property
This is particularly common with verbal estimates. It's always worth getting a second, independent opinion from a local property manager, since a relatively small proportion of agent estimates prove accurate.
Agents can have a vested interest in overstating likely rental returns, since a higher projected yield helps generate more interest and competition for the property.
The Property Trio's Gold Nuggets
Peter Koulizos – The Property Professor’s Golden nugget: An offer isn't really an offer unless it's in writing, so check with your consumer group to understand the rules that apply to prospective purchasers. It's also worth thinking about real estate agents in two categories: those you like buying from, and those you'd choose to sell through, since the qualities that make an agent good for one aren't always the same as what makes them good for the other.
Cate Bakos – The Property Buyer’s Golden nugget: Before you put pen to paper to make an offer, find out how the agent will field offers and how the vendor will make a decision, you need this information before you show all your cards. To have a productive price conversation with the agent, do your homework first: reverse engineer your search and pick out a couple of recently sold properties in your price point that you liked. Ask the agent how this property stacks up against those, whether they see it as comparable, superior or inferior. Their answer will give you a good read on what both the agent and the vendor are thinking.
Listen to the Property Trio Podcast
Need a hand?
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