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Bryce Holdaway Blog post by Bryce Holdaway

Is the Real Estate Agent a Friend or Foe?

I’m often amused by the antagonistic approach that some buyers adopt when dealing with a real estate agent in the midst of a negotiation.  Sure, the agent is employed by the seller to get them the best price and terms and draw as much money as they possibly can from the buyer but equally, they’re a crucial cog in the chain for you getting the property that you want – particularly when there is competition to secure it!

Take a recent client experience I had where I was looking for a property to buy as a principal place of residence.  It was a fantastic 2 bedroom apartment in a boutique block of 5 art deco apartments.  It was just a 10 minute walk from the beach, a huge park only a street away, north facing orientation and near original condition so plenty of upside for the client to add their own touch to it.  It also had the added bonus that it stacked up very well as an investment property.  This property was in demand and the agent was happy to take it to auction.

In my dealings with the agent, I’d gathered all the information regarding the marketing campaign, requested a copy of the contract to have viewed by the solicitor, all strata reports were ordered and I advised the agent to keep me posted on any movements prior to auction as we still had some due diligence to do on the property before the auction. I received a call from the agent 2 days later (which was less than a week away from the auction) to say that he had received an offer that was ‘acceptable to the vendor’ to sell prior to auction and was calling for “best and final” offers by 5pm that day from all interested parties.  We were prepared, we knew what the property’s value was and we put our best offer in by the deadline… and waited for the outcome.

Typically, a call for highest and best offer is a “one shot” attempt to secure the property.  Most agents won’t enter into a “Dutch” auction at this point rather simply ringing the successful buyer to say they’ve ‘got it’ and advising the others that they missed out – no second chances.

However – and here’s my point – I received a call from the agent to say that the other offer he had received was greater than ours but the other buyer was playing games, had become more difficult to deal with and was trying to flex his muscles in an attempt to outmanoeuvre the agent.  To give it a further context, I was negotiating on the phone, from a distance and the other buyer was in the agent’s office effectively providing a “bird in the hand” to the agent – very hard for them to ignore.   Long story short, I was given another opportunity to make a subsequent offer (very rare), which we happily accepted and after some tense moments we ultimately bought the property for my client who was not only delighted but absolutely relieved that she didn’t miss out!  The other buyer walked away bemused at the one that got away?

So, why were we able to snatch victory from the jaws of defeat?

Quite simply – I treated the agent relationship as a crucial part of our negotiating strategy.  I still acted in the best interests of my client but not at the agent’s expense!  Part of the negotiating here was not just about price and terms but also to outmanoeuvre the other buyer to actually get the property!  Think about it from the agents’ perspective – they need to know the buyers motivation and be confident that they are dealing with a legitimate buyer who is likely to complete the sale.  The agent takes a huge risk taking the property off the market so close to an auction so when they frame their pre-offer chat with the owner, they need to have absolute confidence in the buyer’s intentions and ability to have the sale go through.  The other buyer provided doubt in the agents mind at the 11th hour and we provided that certainty… all because we placed crucial value on the role the agents take in a negotiation.

Sadly, I often find that some of the worst examples of this antagonistic behaviour occurs from within my own industry – the buyer’s agent themselves.

In an attempt to “showcase” their skills and expertise and justify their fee, they will intentionally cause disruption and look to flex their ego which immediately puts the agent offside.  In some cases, you will deal with an agent who is difficult and unco-operative themselves and in these cases you will need to adjust your strategy accordingly to suit. I’m all for showcasing negotiation skills and looking for a superior outcome for a client (after all that’s why our service exists) but I also think the best way to achieve this is to look for a win-win outcome as opposed to win-lose leaving a bad taste in the agents mouth.

As far as I’m concerned, the strength of the agent relationship is a huge asset to me and not only did this deal have a positive outcome for my client but any future deals I do with this agent will benefit too!

So think about this the next time you are negotiating for a property… professional property buyers see the real estate agent as a friend not a foe – shouldn’t you too?

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