Decoding real estate selling agents tactics

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Buyer's agent and co-founder

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Are you tired of feeling left behind in the competitive Perth real estate market? You’re not alone. With housing prices soaring and inventory low, understanding the tactics real estate agents use has never been more crucial.

In fact, recent news reports have highlighted agents getting into trouble for underquoting, a tactic that can leave buyers frustrated and out of pocket. This comprehensive guide offers practical steps to help you master the art of decoding real estate selling agent tactics and achieve your home-buying goals with confidence.

Whether you’re a first-time buyer or a seasoned investor, this step-by-step tutorial will walk you through the common strategies agents use and equip you with the knowledge to make informed decisions in your property journey.

The Perth real estate market has been particularly challenging in recent years, with properties often selling for $50,000 to $150,000 above the advertised price. This discrepancy between listed and sale prices has left many buyers feeling confused and discouraged. However, by understanding the tactics behind these pricing strategies, you can navigate the market more effectively and potentially save yourself thousands of dollars in the process.

Moreover, as the market continues to evolve, so do the strategies employed by real estate selling agents. From end-date sales to express auctions, the techniques used to create urgency and drive up prices are becoming increasingly sophisticated. But don’t worry, with the right knowledge and approach, you can level the playing field and make confident, informed decisions about your property purchases.

Preparation and Planning

Before diving into the property market, it’s essential to arm yourself with knowledge. Understanding real estate agent tactics is your first line of defense against overpaying or missing out on your dream home. Proper preparation will not only save you time and stress but potentially thousands of dollars.

Think of this preparation phase as building your armour for the real estate battlefield. Each piece of information you gather, each trend you analyse, and each strategy you understand adds another layer of protection against potential pitfalls. By investing time in this crucial stage, you’re setting yourself up for success in the long run.

Materials Needed

Access to real estate websites (e.g., realestate.com.au)
Notebook or digital device for taking notes
Calculator for quick price comparisons
List of properties you’re interested in
Contact information for a trusted buyer’s agent (recommended)
Recent sales data for your target suburbs
Property market reports for Perth and specific areas of interest
Access to property valuation tools or services

Having these resources at your fingertips will enable you to quickly assess properties, compare prices, and make informed decisions on the spot. Remember, in a fast-moving market, being prepared can make the difference between securing your dream home and missing out.

Preparation Checklist

Research current market trends in your desired area
Familiarise yourself with common real estate terms and jargon
Set a realistic budget, including buffer for potential bidding wars
Understand different sale methods (e.g., end date sale, express sale)
Prepare a list of questions to ask agents at open homes
Create a spreadsheet to track properties you’ve viewed and their details
Set up alerts on real estate websites for new listings in your target areas
Attend several open homes to get a feel for the market and agent tactics
Consider getting pre-approval for your home loan to strengthen your position
Research the reputation of real estate agencies operating in your target areas

By thoroughly completing this checklist, you’ll be well-equipped to face the challenges of the Perth real estate market. Remember, knowledge is power, and in this case, it’s also your best defense against overpaying for a property.

Steps to Decoding Real Estate Selling Agent Tactics

Real estate selling agents employ various strategies to maximise the sale price for their clients (property sellers). By understanding these tactics, you can understand the buying process more effectively. Here’s a breakdown of common tactics and how to decode them:

It’s important to remember that while these tactics may seem manipulative, agents are legally obligated to act in the best interest of their sellers. Your job as a buyer is not to outsmart the selling agent, but to equip yourself with the knowledge to make informed decisions. By understanding these strategies, you can engage in the process more confidently and effectively.

Recognise Underquoting

Understand how agents may list properties below market value to attract more buyers.

Identify listings with phrases like “Offers over $X” or price ranges
Research recent sales in the area to gauge realistic prices
Be prepared for properties to sell significantly above the listed price
Remember: In Perth, properties often sell $50,000 to $150,000 above the advertised price

Underquoting is a tactic that has gained significant attention in recent years. In essence, it involves advertising a property at a price lower than what the seller is actually willing to accept. This practice is designed to attract more potential buyers, create a sense of competition, and ultimately drive up the final sale price.

For example, a property that the seller expects to sell for around $600,000 might be advertised with “Offers over $500,000”. This lower price point attracts buyers who might not otherwise consider the property, potentially leading to a higher number of offers and a final sale price that exceeds the seller’s expectations.

To combat this tactic, it’s crucial to do your own research. Look at recent sales of similar properties in the area, consider factors like location, size, and condition, and try to establish a realistic price range for the property you’re interested in. This will help you avoid getting caught up in the excitement of a seemingly good deal, only to be disappointed when the price soars beyond your budget.

If a deal seems too good to be true, it probably is. Always assume the actual selling price will be higher than advertised.

End Date Sales

Understand how end date sales create urgency and potentially drive up prices.

Recognize that end date sales are designed to create competition
Don’t be swayed by the number of people at an open home
Prepare your best offer based on your research, not emotion
Consider seeking off-market opportunities to avoid bidding wars

End date sales, also known as “offers by” or “best and final” sales, are becoming increasingly common in the Perth market. This method involves setting a specific date by which all offers must be submitted. The aim is to create a sense of urgency and competition among buyers, potentially driving up the final sale price.

During an end date sale, you might notice increased activity at open homes as the deadline approaches. It’s important not to let this influence your decision-making process. Remember, not everyone attending an open home is a serious buyer, and some may be there simply out of curiosity or to gauge the market.

When participating in an end date sale, it’s crucial to stick to your budget and the value you’ve determined for the property based on your research. Don’t be tempted to offer more than you’re comfortable with just because you’re aware of other interested parties. Sometimes, walking away from a property that’s garnering too much attention can be the wisest decision.

Ask the agent about the number of genuine offers received, not just expressions of interest. This can give you a more accurate picture of the actual competition for the property.

Decode Selling Agent Communication

Learn to read between the lines of agent speak.

Understand that agents are legally obligated to act in the seller’s best interest
Be skeptical of vague phrases like “lots of interest” or “won’t last long”
Ask for specific, verifiable information about offers and property history
Remember: It’s okay to doubt and question the information provided

Real estate agents are skilled communicators, and understanding their language is key to decoding their tactics. Often, the information they provide is carefully worded to create a sense of urgency or competition, while remaining technically truthful.

For instance, when an agent says there’s “lots of interest” in a property, this could mean anything from several serious buyers to a high number of inquiries, many of which may not translate into actual offers. Similarly, “won’t last long” is a phrase designed to create urgency, but it doesn’t necessarily reflect the actual market demand for the property.

When communicating with agents, always ask for specific, verifiable information. Instead of accepting vague statements, ask questions like:

“How many written offers have you received?”
“What was the feedback from other buyers about the property’s price?”
“Can you tell me about any building or pest issues that have been identified?”

Remember, while selling agents cannot lie or mislead you, they are not obligated to volunteer information that might negatively impact the sale. It’s up to you to ask the right questions and seek the information you need to make an informed decision.

Build relationships with multiple agents to cross-reference information and get a more accurate picture of the market. This can help you spot inconsistencies and get a better understanding of true market conditions.

Handle Private Inspections

Learn how to secure and make the most of private inspections.

Understand that agents prefer open homes to create competition
Network and build relationships to gain access to private inspections
Use private inspections to thoroughly examine the property without pressure
Prepare a list of specific questions to ask during the private inspection

Private inspections can be a valuable tool in your home-buying journey, offering you the opportunity to view a property without the pressure and competition of an open home. However, securing a private inspection can sometimes be challenging, as agents often prefer open homes to create a sense of competition among buyers.

Building relationships with local agents can increase your chances of securing a private inspection. By being well-prepared, asking informed questions, and following up after inspections, you can demonstrate that you’re a serious buyer. Over time, agents may be more willing to accommodate your requests for private viewings.

When you do secure a private inspection, make the most of it. Without the distraction of other buyers, you can take your time to thoroughly examine the property. Look for signs of potential issues, such as water damage, cracks in walls, or signs of pest infestation. Test all fixtures and fittings, and don’t be afraid to look in cupboards, under sinks, and in other areas you might feel uncomfortable exploring during an open home.

During the inspection, ask the agent detailed questions about the property’s history, any renovations or repairs that have been done, and the seller’s motivations. While the agent may not be able to disclose all information, their responses (or lack thereof) can provide valuable insights.

If you can’t secure a private inspection, arrive early or stay late at open homes for a less crowded viewing experience. This can give you extra time to inspect the property more thoroughly.

Common Issues and Solutions

Issue: Feeling pressured to make an offer on the spot. Solution: Always take time to think. Inform the agent you need to consult with your financial advisor or family before making a decision. It’s common for agents to create a sense of urgency, especially in a competitive market. They might suggest that other buyers are ready to make an offer, or that the seller is considering another proposal. While this may sometimes be true, it’s essential not to let this pressure rush you into a decision you’re not comfortable with. Remember, buying a property is a significant financial and personal decision. It’s perfectly reasonable to take the time you need to consider all aspects of the purchase. If an agent is pushing you to decide immediately, politely but firmly state that you need time to think it over. A reputable agent will understand and respect your need for consideration.
Issue: Difficulty getting straight answers from agents. Solution: Ask direct, specific questions and request written responses where possible. If an agent is evasive, consider it a red flag. Agents are skilled at providing information in a way that best serves their clients – the sellers. This can sometimes result in vague or indirect answers to your questions. To combat this, prepare a list of specific, direct questions before each interaction with an agent. For example, instead of asking “Has there been much interest in the property?”, ask “How many written offers have you received?” or “How many second inspections have there been?”. These specific questions are harder to answer vaguely. If an agent consistently provides evasive answers, or if their responses seem to contradict information you’ve received elsewhere, consider this a warning sign. It might indicate that there are issues with the property they’re trying to downplay, or that the level of interest isn’t as high as they’re suggesting.
Issue: Constantly being outbid on properties. Solution: Reassess your budget and target slightly lower-priced properties. Consider looking in neighboring suburbs or engaging a buyer’s agent. In a competitive market like Perth, it’s not uncommon to face multiple instances of being outbid. If this is happening consistently, it may be time to reassess your strategy. First, review your budget. Are you targeting properties at the very top of your price range? If so, you may have little room to compete when a bidding war starts. Consider looking at properties listed 10-15% below your maximum budget to give yourself some flexibility. Next, expand your search area. Sometimes, neighboring suburbs can offer similar properties at more competitive prices. Research upcoming areas that might be on the cusp of growth but haven’t yet seen prices skyrocket. Finally, consider engaging a buyer’s agent. While this involves an additional cost, a good buyer’s agent can provide access to off-market properties, offer valuable market insights, and negotiate on your behalf. Their expertise can often save you money in the long run, especially in a challenging market.

A good buyer’s agent will have extensive market knowledge, strong relationships with local selling agents, and skilled negotiation tactics. They can often help you secure properties at better prices and with better terms than you might achieve on your own. However, it’s important to weigh the cost of a buyer’s agent against the potential benefits. In some cases, particularly for experienced buyers in less competitive markets, the cost might outweigh the benefits. Always do your due diligence when selecting a buyer’s agent, checking their credentials, track record, and client testimonials.

Conclusion

Decoding real estate agent tactics is an essential skill in today’s competitive property market. By recognising underquoting, end-date sales, decoding agent communication, and leveraging private inspections, you’ll be better equipped to make informed decisions and secure your ideal property at a fair price.

Throughout this guide, we’ve explored various strategies employed by real estate agents in the Perth market. We’ve learned how to identify underquoting by comparing listed prices with recent sales data, and how to navigate end date sales without succumbing to artificial pressure. We’ve also discussed the importance of decoding agent communication, asking specific questions, and seeking verifiable information.

Moreover, we’ve highlighted the value of private inspections and how to secure them, giving you the opportunity to thoroughly examine properties without the distractions of open homes. By employing these strategies and maintaining a level head, you can navigate the complex world of real estate with confidence and clarity.

Remember, while agents use these tactics to achieve the best outcomes for their sellers, understanding them doesn’t mean you’re working against the agent. Rather, this knowledge allows you to engage in the process more effectively, making decisions based on facts rather than emotions or pressure.

Next Steps

Now that you understand these tactics, consider deepening your knowledge by:

Attending multiple open homes to practice your new skills
Networking with local real estate professionals
Staying updated on market trends and property news
Considering whether a buyer’s agent might be beneficial for your situation
Creating a detailed plan for your property search, including your must-haves, nice-to-haves, and deal-breakers
Reviewing and refining your budget based on your new understanding of the market

As you put these skills into practice, you’ll likely find that your confidence grows and your ability to spot good deals improves. Don’t be discouraged if it takes some time to feel fully comfortable – like any skill, decoding real estate agent tactics takes practice.

Get in touch with our team

Ready to put your new knowledge into action? We’d love to hear about your experiences. Have you encountered any of these tactics in your property search? How did you handle them?

If you’re feeling overwhelmed by the Perth real estate market or want personalised advice on navigating these tactics, don’t hesitate to reach out to our team of Perth local buyers agents at You&Me Personalised Property Services.

Remember, knowledge is power in real estate. Stay informed, stay prepared, and until next time, happy investing!

FAQs

How do I know if an agent is underquoting?

Compare the listed price with recent sales of similar properties in the area. If there’s a significant discrepancy, it may be underquoted. Underquoting can be difficult to prove definitively, but there are signs to watch for. Start by researching recent sales of similar properties in the same area. Look for properties with comparable features such as the number of bedrooms, land size, and overall condition. If you notice that the listed price is significantly lower (say, more than 10-15%) than what similar properties have recently sold for, this could be a sign of underquoting. Keep in mind that market conditions can change rapidly, so focus on the most recent sales data available. Another red flag is if the property sells for significantly more than the quoted range. While it’s normal for properties to sell above the quoted price in a competitive market, a sale price that’s 20% or more above the upper end of the quoted range could indicate underquoting.

Should I trust the price guide provided by the agent?

Use it as a starting point, but always conduct your own research and be prepared for the price to be higher. Price guides can be useful tools, but they should never be taken as the final word on a property’s value. Agents may provide conservative estimates to attract more potential buyers, or they might not have fully accounted for recent market shifts. To get a more accurate picture, combine the agent’s price guide with your own research. Look at recent sales in the area, consider any unique features of the property, and factor in current market trends. It’s often wise to assume that the final sale price could be 10-15% higher than the top end of the quoted range, especially in a competitive market. Remember, price guides are just that – guides. They’re not guarantees or fixed prices. Always be prepared for the possibility that the property might sell for more than the guided price, and set your budget accordingly.

Is it worth engaging a buyer’s agent?

For many buyers, especially in competitive markets, a buyer’s agent can provide valuable insights, access to off-market properties, and skilled negotiation. The decision to engage a buyer’s agent depends on various factors, including your own experience in the property market, the amount of time you can dedicate to your property search, and the competitiveness of the market you’re buying in. Buyer’s agents can be particularly valuable in the following situations:

- You’re an out-of-town buyer unfamiliar with the local market
- You have limited time to dedicate to property searching and inspections
- You’re consistently missing out on properties or feeling overwhelmed by the process
- You’re looking to invest and want expert advice on growth areas
- You want access to off-market properties not available to the general public

Video Transcript

See transcript

G'day everyone, it's Heath and Simon from You&Me Personalised Property Services. Beautiful springtime. I can smell the pollen in the air, the birds chirping, and welcome to Perth.
Today we wanted to talk about decoding agents' tactics. What we mean by that is when you go to a home open, there's an end date sale. The listed price is from $499,000 or $599,000 (I don't think there are any houses selling for $499,000 at the moment in Perth). What does that actually mean? And how do we get around that barrier? So I'll hand it over to Simon to talk about the difference between end date sale, contact agent, and express sale. What does it all mean? And what are your thoughts on it?
Simon: Well, I think first and foremost, it's split up into a couple of different ways because you're decoding agent tactics. Now, if you're a local here in Western Australia, you'll be more familiar with the way agents put properties up for market. But if you're interstate, it's almost like you're trying to buy real estate in a different country, because the way properties are marketed and sold here is totally different.
Let's address the Perth local aspect first when decoding the agent tactics. The biggest tactic right now, which you probably would have seen on the news 2 or 3 weeks ago, is agents starting to get in trouble for, I guess, under-quoting. By that, it means they believe the property is probably worth $600,000, but they're putting it in as offers over $500,000. What they're doing is obviously bringing in a lot more buyers into the market by putting it in as offers over $500,000. Now, the reality is that 80 to 90% of those buyers coming to that open home can't afford the actual $600,000.
But the 10% that can afford the real market value are then put off because they're seeing 30 other people and they think, "Oh my God, there are so many other people here." So something that should be selling at market value around $600,000 ends up going for $650,000. In some cases, it's even selling for more than $150,000 over the advertised price.
Heath: Absolutely. I actually spoke to a client literally today. His name was Shaun. He said, "Oh, you know, what happens if I have $500,000?" I said, "Mate, the reality is, if you're seeing on realestate.com.au from $499,000, you're not buying that at $500,000." I spoke about Mandurah actually as a region. I said properties are selling at $575,000 or $580,000. And he goes, "Oh wow. More than $50,000 over." I said, "Mate, I've seen $150,000 over." So, what it does do is get agents in trouble, but what they're there for is to act in the seller's best interest.
Simon: But the crazy thing is, because the market's moved so hard, even if an agent was to sit down - for instance, someone reports that the agent's going to sit down and say, "Well, look, the market is growing 20%. The market is continuing to grow, the rents are continuing to grow. I don't know what someone is prepared to pay for a property." So if you look at the listing form, they're probably listing at around $500,000. But what they're doing in the homes is having the conversation with the homeowners. "Hey, look, I actually believe this thing's going to go for around $600,000, but I want it listed at $500,000 so we can advertise offers over $500,000. It keeps us out of trouble if anyone comes back. And it's going to give you the best chance at getting the best price."
So when we come back to decoding agent tactics, it's very simple. Agent tactics are to get as many people into the property in the quickest possible time. That's why very few agents are allowing people to do private inspections now. They want 80 people coming to that open home so that they can just play on the fear of missing out.
Heath: Okay, so based on that, how do you get a private inspection?
Simon: Yeah, when it's networking. It's relationships. Now we all know that I've been in real estate since the early 1800s. Heath, you've been in it for quite some time, too. We have the largest local network in Perth, and we've got one of the largest local networks across the country, but specifically here in Perth. And we come across so many more opportunities than what is just on the open market. And then the other thing is, we can decode all the crap, so we can go to an open home that is flooded by 80 people and just know where the value sits.
So one of the things that we do, I guess, that I pride ourselves on that we do really well is just being direct with the client, telling them exactly where we see value, drawing a line in the sand and understanding that look, no good is going to come from a property if you are buying a property and there are 30 offers out. You know you're going to get yourself into trouble and you're going to pay more than you have to.
When you're getting an off-market opportunity, you're not in that position. And the question I always get is, why do you get off-market opportunities? 28 years in real estate for myself, 17 years in real estate for Heath, not just local network in Perth. It's all to do with conditions. You can come across people that are in a bad health state, elderly people that don't want fuss. We had someone that didn't like germs, you know, so there are all sorts of tenanted properties. Tenants don't have to keep, I'm not saying they do or don't, but they don't have to keep your property in showroom condition to sell your property. Tenants don't like strangers coming through their home.
So this can be difficult with open homes. There are all sorts of things that come into it. But if you are only looking at open market opportunities and you're trying to invest in Perth, you have to decode all the agent tactics. And those tactics are to make you pay the absolute premium, to fill you full of fear that if you're not coming up to your very top price, you're going to miss out on the property.
And then that puts people in two positions. It's like, do I trust the agent? Do I doubt the agent? The simple answer to that is no, you don't trust the agent. And yes, you do doubt the agent because they are there to represent the seller. And that's exactly why you need to have a buyer's agent represent you. If you think about it logically, there is nothing in this world where we're talking about spending half a million, $1 million, $3 million, $10 million where you seek representation from the other party.
Yeah, you get your own representation. And now more than ever, getting a buyer's agent here in Perth is the most important thing. But then having said that, buyer's agent is now the flavor of the month. So you've got all these people just jumping into buyer's agents, I've seen footy stars and all that, they've never even done real estate. It's an ex-lawyer. It's an accountant. They have no idea. I've seen people in the game for literally a year and they're trying to give advice on $1 million property. I'm like, "What are you doing thinking? They've got no idea." But then again, because it's relatively new, if you're the buyer, you're inexperienced too, so you don't know where to turn.
So look, if you want people that give you representation that live in a black and white world, aren't here to tell you what you want to hear, tell you what you need to hear and have the experience and most importantly, the results. Reach out to us. Decoding agent tactics is one of the things we go through, but reach out to us and look through all the other stuff that we address when we take on clients.
And always guys. Until next time, happy investing!

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Simon Deering

About the author

Buyer's Agent, Co-Founder at You&Me Personalised Property Services

Helping property buyers get into Perth and Brisbane property faster and for less.

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Decoding real estate selling agents tactics