How much should you tell the agent?

There is a fine line between telling a selling agent too much information and providing enough information to optimise your property search success. So, how much is too much? And how do buyers often get it wrong?

So many buyers are guarded with agents, and this is understandable when we hear some of the painful stories that some have encountered. But most selling agents enjoy their buyer interactions, and this includes aiding buyers to purchase a property that is well-matched to their needs.

Buyers should always remember that the vendor pays the agent, not the buyer.

The agent’s fiduciary duty is to their vendor. But that doesn’t mean they can’t be helpful when they have the right information to offer their buyer assistance. As professional buyers, we often share important buyer information with the agents we like to work with. We know how much information is helpful, and we can be discerning with the information we should protect.

What sort of information is helpful?

The immediate thought may be that of maximum budget, but in fact this can often create issues or confusion. Most buyers do have a budget threshold, but typically their search criteria is based on attributes and/or location. Providing the basic criteria and the non-negotiables to a selling agent, along with a couple of past sales that are representative of the ideal property is a clear guide. This not only lets the agent know what features are important, but it also illustrates that the buyer is realistic and has done their homework.

Off-market properties can be great, however many can be poor quality assets with unrealistic vendors. A targeted off-market opportunity may be a property that an agent has specifically sourced for a buyer based on their criteria description. Two common sources include buyers who they are in dialogue with who are keen to sell in order to purchase, or a willing landlord on their agency rent roll.

It’s the non-targeted off-markets that are being pedalled to all and sundry that are often poor quality stock.

Pre-market opportunities are exciting too; if an agent has a forthcoming campaign that hasn’t hit the internet yet, they may be prepared to whiz a suitable buyer though, pending the vendor’s circumstances.

Sometimes when I’m asked what a client budget is, I may answer with, “it’s flexible for the right property”. Other times, it may be helpful to explain which properties we’ve missed out on due to tough competition.

Pending the campaign type, it’s important to know when to talk and when to stay quiet. A public auction budget reveal is very different to a ‘best and highest’ email and disclosed offers aren’t always treated in confidence.

This leads to an important scenario that many buyers are often faced with, (and some create the scenario for themselves, sometimes unbeknown). When to make a pre-auction offer, and when not to is a critical decision, and one that should only be made following a thorough conversation with the selling agent. Firstly, establishing if the property can legally be sold prior to auction is an important step. In the case of mortgagee sales, court orders and some other legal reasons, some properties must sell publicly on auction day. Secondly, establishing if the vendor’s preference is for an auction is essential. Some vendors have clear reasons for preferring an auction, particularly in relation to estate sales. Siblings who are selling a late parent’s home will often want to avoid being the decision-maker, and many prefer the market to decide on auction day.

If neither of these above constraints apply, the agent-buyer conversation then becomes important. Mutual trust is required and buyers should be aware that they are essentially asking an agent to stop the auction campaign. The agent will be feeling very protective of their vendor, and when facing a pre-auction offer scenario, the agent will require confidence that;

• the buyer’s potential offer is at the appraised level,
• the buyer is committed to the sale and won’t cool off or have a change of heart during the documentation phase, and importantly;
• the other interested parties will be given ample time to formulate an offer should they wish to contest the offer.

So often, buyers misunderstand this final point. Applying tough time limits, or getting angry with the agent for taking their offer and then going out to other parties are just some of the mistakes buyers make.

When stopping an auction, a buyer should anticipate that no agent will burn other buyers and just sell the property exclusively to them.

Conversing with the agent about the way that they’ll deal with any possible competition is critical and this should be done before making any offers. From boardroom auctions to phone calls throughout the night, these are just some of the ways that agents sell a property pre-auction. Best and highest, last right of refusal and closed tender bids are tougher to navigate and should be approached with care.

If a buyer hasn’t established which method above is being applied, they haven’t asked enough questions.