When it comes down to trust, real estate agents rank about as highly as used car salespeople.
There has always been a degree of negative perceptions towards real estate agents, with some buyers still unable to let go of their suspicions of their agents’ underlying motivations.
These perceptions stem partly from a belief that real estate agents don’t act in the best interests of the buyer or the seller — agents are typically remunerated on commissions received from the sale of properties and not the eventual price achieved, so it’s typical to believe that an agent’s desire to achieve an impressive turnover volume will negate any efforts to maximise price.
And while it is a must for buyers to always be honest and direct towards real estate agents, there are times when it might be best to be tight-lipped about certain things to avoid losing on the negotiation table.
Quite simply, a real estate agent is selling the property, but at the same time, they're also gathering intel to pass on to their vendor client.
And that information, especially when the property is being sold by auction, is golden and should be kept mostly to yourself.
That said, it's a fine line between wearing a poker face and showing the necessary enthusiasm when investing in property.
Here are four things you should never discuss freely with a selling agent:
1. Budget
Smart investors have a strict budget – and they stick to it. Now that number should only be known to them and their property team.
One person that shouldn't be aware of your exact budget is the sales agent.
Let’s be clear: agents are on a mission to find out as much useful information about potential buyers as possible and that includes their budgets.
In other words, a real estate agent wants to know your budget so they can use that during negotiations.
Let's say you have $800,000 to spend and you're looking at a property that's priced with a seven in front of it.
What should be flashing through your mind is this: If the agent knows you have more money to spend, they will attempt to extract it from you at the final sales price.
The secret is to give a more general answer to the budget question such as: "I'm looking for properties around this price."
2. Timing
Just like timing is crucial in jokes, so it is in real estate transactions — the selling agent will try to elicit this information from you.
Likewise, it's wise for you or your buyers' agent to get an understanding of the timing requirements of the seller. That's because the vendor might need a quick sale or is after a long settlement, which you can use in negotiations.
In the same vein, an agent will attempt to find out whether you need to find a property quickly, perhaps because you’ve already sold your own, and may use this information to speed up proceedings. It's always better to take your time and consider the pros and cons, rather than make a hasty decision to solve a short-term problem.
3. Price feedback
Most investment-grade properties are either listed with a price range or no price at all.
This is because the properties that are most in-demand will attract the highest prices — and sometimes that price is hard to predict beforehand.
The market will always dictate property price and it's usually emotion that drives prices up – this is why you should never suggest price specifics with an agent because your numbers might be much higher than the vendor was actually prepared to accept.
Instead, because you would have done your research, you could discuss comparable sales with the agent so they know that you know what you're talking about.
4. Non-interest
Sure, buying property is about matching a property with a new owner but that doesn't mean it's like dating.
Telling the agent you're not interested or giving them the silent treatment won't do you any favours.
Here's why: the agent is working for the vendor but to do a good job they have to find a suitable buyer, which involves communicating with interested parties.
This is not to advocate playing hardball when investing — the main point is that you have to give a little to possibly receive a lot. And that means communicating with the agent during early negotiations so they know that you're interested.
That way, if there is a multiple offer situation, you'll have your hat in – and not out – of the ring.
The lesson from all of this is that successful property investment shouldn't be like a game of high-stakes poker.
While you don't want to be the buyer who loudly protests your love for a property or tries to outsmart your competition by pointing out its various faults, you have to be in the game to win it.
And that means being professional in your dealings with the agent while keeping your aces close to your chest.
Related articles:
7 tell-tale signs you’re dealing with a bad real estate agent
Seeing through real estate agents' tricks of the trade
Collections: Real Estate Agents
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