In my experience real estate agents typically fall into one of two categories – “deal doers” and “process people”.

The first, and most common, are the deal doers. These are agents who jump to action when they have a buyer on the hook. They won’t let a deal pass them buy. They are opportunistic and often charismatic. They thrive on a sale and know that the only way they get paid is to sell, sell, sell, and they never lose sight of this.

These agents are able to understand their vendor’s motivation and are able to find out their bottom line. They are very focused on managing their vendors price expectations (otherwise known as conditioning) so that they can get a deal together in a timely fashion once they have identified a buyer.

The more skilled agents in this category will be very charming and persuasive and you will want to buy from them, even if the property they are handling isn’t ideally suited to your needs.

The less skilled “deal doer” agents will resort to playing games and being a bit liberal with the truth. So you are unlikely to trust these guys as much and will probably not want to buy from them unless they happen to be selling a property that really suits you.

Regardless of their skill level, a quick sale is a good sale in their eyes. So negotiate hard and decisively, preferably with a signed contract and a walk-away price.

The second group of real estate agent are process oriented and much less focused on getting a deal across the line, often lacking the necessary negotiation skills and nearly always inadequate when it comes to reading people and their buying signals. Often inexperienced (although some dinosaur agents can be like this too), they will be lead by their owners, who generally don’t know how to negotiate either. They couldn’t manage their way out of a wet paper bag so the chances of them having their vendor’s price expectations under control are close to nil. Not only that, but quite often they haven’t even worked out that without covering this crucial base they are less likely to get a sale. And they don’t have the skills to close the gap between a buyer at a low price and a vendor at a high one. Quite often we come across these agents presiding over an overpriced property, where they don’t even realize the price is too high and they have a level of arrogance about buyers who they seem to perceive are simply being cheap.

Typically these people follow a very rigid step by step process and aren’t able to roll with the punches. They don’t think on their feet and won’t know how to handle a curve ball. C follows B follows A and don’t get the order wrong! So now is not the time to get creative with your offer and try to negotiate on things like inclusions, settlement periods and lease-back arrangements. Whatever you do, don’t confuse these poor souls!

Generally those who are the worst negotiators will give you the least information. They don’t know how to use information to get an outcome. So buyers get frustrated with them and sometimes even give up in disgust. Or they dig their heels in and nobody gets anywhere.

These are the sorts of agents you have to give a low offer to as they won’t know how to present a decent offer to their vendor. By starting off at a figure less than you are prepared to go to you will be conditioning the vendor (because we know the agent hasn’t been) and allowing our friend to look like he is negotiating. So when you finally get to the point of submitting your final offer, the vendor is better prepared to recognize it for what it is and hopefully accept it.

You might get the feeling that I don’t like dealing with these “box ticker” agents. And you would be right. But we always keep our eye on the prize and act accordingly in our negotiations.

The Inner West of Sydney is a very auction oriented area and there are certain rules of the game that you need to bear in mind in such markets.

Firstly, you need to be aware of how a quoted price or price range comes about. Basically it is the lowest price that the agent thinks he or she can get away with quoting. And what they can get away with depends on a number of factors, not the least being their legal obligations and requirements imposed by the Office of Fair Trading.

Now before an agent lists a property, they usually conduct an appraisal and pitch their proposal against other selling agents. There is often a temptation to put a high estimated sales price if they think that will increase their chances of winning the listing. Many otherwise level headed property owners can get blinded by a little price flattery. So in order to make these estimates more realistic, the agents are required to provide evidence of how they have arrived at their suggested sale price. What usually happens is that they end up providing a range. What they really believe is at the lower end and what they think the vendor wants is at the upper end. This is the range that is written on the agency agreement and they are not allowed to quote a lesser figure.

However, the vendor probably won’t sell at the lower end of that range without some heavy persuasion and they would need to be convinced that nobody would be prepared to pay any more. Thus begins the conditioning process, whereby the agent seeks to close the gap between what they think the property is worth and what the vendor wants for it.

Now sometimes the vendor is right and buyers are prepared to pay more than the agent thinks. During an auction campaign it is not uncommon to receive pre-auction offers, as David and Marie decided to do. In most auction campaigns there is not much point putting in an offer under the quoted price, so you would expect a serious attempt to buy prior to auction would take the form of a greater figure. Every time the vendor rejects an offer, the agent is required to increase their quoting. And if there is only one buyer at that higher level, that can really sabotage their campaign.

At the moment it is widely believed to be a buyers market throughout the country. In Sydney it is no different, though in the Inner West we constantly see that good property still attracts good interest from buyers. However the quoted price range is an essential component required to generate competition. If the agent is allowed to continue quoting a low starting price, they improve their chances of being able to build substantial interest and have a competitive auction. However, if they are forced to increase their quoting, their job is made all the more difficult.

The fact is that buyers are cautious at the moment and reluctant to compete if they think somebody else is already prepared to pay top dollar or if the vendor has unrealistic price expectations. And we have been at many auctions recently where there has been good interest in a property yet high vendor expectations have ended up causing a sluggish auction.

The bottom line here is to be be aware of the quoted price and what impact that can have on the ultimate sale price. A low price guide can build substantial competition, while a more realistic one can limit competition. So don’t assume all agents are low-balling, there are some good buying opportunities with reasonably quoted properties. But if the home you have fallen in love with is being quoted low, try making an offer that will force the agent to increase the quoting. You may surprise yourself and end up buying it prior to auction!