For years, an agent could open the doors, run an auction campaign and, with enough interested buyers in the room, allow competition to take care of a considerable part of the negotiation.
It is a very different proposition when there are only one or two serious buyers.
For Belle Academy Manager, Trainer and Coach Scott Dolce, who has spent the past 20 years working in real estate, that shift is exposing a simple truth: the fundamentals of selling never disappeared, but some agents have not needed to rely on them as heavily in recent years.
“The fundamentals don’t change in real estate. You still have to talk to people. You still have to bring a deal together,”
Scott says.
“In a good market, buyers are negotiating with each other because it’s plentiful. In the current market, you are often doing deals with just one or two buyers.”
That puts skills that may have been less tested during stronger conditions – prospecting, buyer work, vendor communication and one-on-one negotiation – firmly back at the centre of the transaction.
“I think that a good market means that agents don’t have to essentially flex their negotiation skills as much because the competition between buyers does the work for them.
“You don’t have that luxury in a down market. You need to be the one that is pulling the deal together.”
Scott prefers to describe the distinction as a more buoyant versus less buoyant market, but the practical difference for agents is the same: when buyers are not competing heavily against each other, the agent has to become more strategic about bringing the two sides together.
Know more about the buyer than your own listing
One of the biggest changes is the depth of buyer work required.
It is no longer enough to know that somebody inspected, requested a contract or indicated they might bid. Agents need to understand what else that buyer is considering, what they have already missed, where they see value and what might ultimately prompt them to act.
“Buyers that are out there, they’re not just looking at your properties. They’re looking at everyone’s properties,” Scott says.
“Whereas now we need to understand the competitor’s property down the road. You may not have had the opportunity to go in there, but your buyer has.”
That means asking more questions. What else have they inspected? What did they think it was worth? Have they made an offer elsewhere? Have they been an underbidder? Do they need to sell before they can buy? Is their finance ready?
Those answers can tell an agent far more than an expression of interest in a single listing.
Scott describes buyers as moving through a life cycle, often beginning with optimism that softer conditions will deliver a bargain.
“They go through a few of those bargain hunting. They go, ‘Well, that strategy is not working,’ and then they move up to something that I call fair market value, where they’ve missed out on a few of the properties that they’ve tried to lowball, end up going for more, and they go, ‘Well, I wish I actually offered more’.”
After missing properties at that level, Scott says some progress to what he calls a “premium buyer” – someone whose experience in the market has changed what they are prepared to do when the next suitable property comes along.
“You can’t have a premium buyer who comes into the marketplace and says, ‘Yep, I’m just going to pay whatever it takes,’ because I’ve never had a buyer put up their hand and say to me, ‘Scott, I want to pay the absolute maximum’.”
For agents, there is an important lesson in that progression: don’t automatically write off the buyer whose first offer is unrealistic.
Understanding what they have missed, where they stopped bidding and what they have learnt from previous negotiations can provide valuable insight into where that buyer may go next.
“It’s managing that relationship and managing expectations as well.”
Communication is part of the negotiation
If there is one skill Scott believes agents should sharpen, it is communication.
“The amount that you’re communicating, I think, is probably the cornerstone of what it is,” he says.
During more buoyant conditions, agents could lean more heavily on the campaign itself, particularly an auction deadline and competition between buyers, to demonstrate the market to a vendor.
With fewer buyers, vendors need a clearer picture of what is happening throughout the campaign.
That means calling after an open home, keeping them across buyer feedback and explaining what is happening in the broader market as it relates to their property.
“We live in a society now where instant gratification for information happens, and we as agents need to be part of that instant gratification for information,” he says.
“So as soon as an open home finishes, you’re on the phone to them.”
Importantly, Scott believes agents should communicate even when there is little to report.
“If there’s nothing to say, there’s no news, then communicate that to people as well, both buyers and sellers, because I’ve never had a client, buyer or seller, in my time say, ‘Scott, you’re over-communicating with me. Stop it.'”
The alternative – leaving a vendor to fill an information vacuum with broader market headlines – can make an already apprehensive seller more uncertain.
Scott’s approach is to keep bringing the conversation back to what is actually happening within that particular campaign.
Stop negotiating on price alone
A less buoyant market also means agents may need to look beyond the headline number to find the point at which a transaction works for both parties. Scott says price is only one lever.
“You’ve got deposit, the amount of deposit that’s there. You’ve got a settlement date and perhaps an extended settlement might work more for a buyer who’s having to sell their property at the same time, conditions of the actual contract itself, inclusions versus exclusions on the contract, and basically the exchange date as well.”
That changes the conversation from simply trying to push one side higher or lower on price to understanding what each party actually needs from the transaction.
A buyer may need more time to sell. A vendor may place greater value on particular terms.
Deposit, settlement, inclusions, exchange timing and contract conditions can all form part of the negotiation.
“In a less buoyant market, you’ve got different levers to pull. It’s not just about price,” he says.
“If the price isn’t there, is it about negotiating the length of settlement or inclusions or what have you?”
For agents, the practical takeaway is to establish those priorities before the negotiation reaches a stalemate; knowing where each party has flexibility gives an agent more options when price alone will not close the gap.
Urgency has to be genuine
With fewer competing buyers, agents may also need to work harder to create urgency, but Scott draws a clear distinction between legitimate urgency and manufacturing pressure that does not exist.
“You certainly don’t want to put undue pressure on anyone. Buying a house is a big decision – or buying a property, not just a house, but buying property in general is a big decision – and selling a property is a big decision as well.”
Instead, he says the starting point is understanding the buyer’s position.
Do they have finance? Have they missed out previously? Are they looking at other properties? Have they offered elsewhere? Do they need to sell before buying?
That information allows an agent to identify genuine reasons for a buyer to make a decision rather than inventing competition.
Scott repeatedly comes back to one word: transparency.
“If you are transparent with both parties and both parties know what’s at stake, and you’re not trying to create a false scenario, then people are more likely to buy into the negotiation.”
That transparency has to run both ways. If another offer is being considered, Scott’s approach is to give the buyer the opportunity to decide whether they want to remain in the negotiation rather than making that decision on their behalf because their initial offer was too low.
“Do you want to be part of this negotiation, knowing that you’re going to have to pay more? Or are you happy to let that go?
“Letting them make the decision rather than the agent making the decision for them.”
The same principle applies to the vendor.
An offer does not automatically mean a property has to be sold. The vendor still has the choice to accept what the market is offering or, if their circumstances allow it, hold the property.
That is where Scott believes the quality of the agent’s advice becomes particularly important.
“Agents need to be giving real advice if they genuinely think it’s right for the vendor to be accepting an offer or it’s right for them not to accept it,” he says.
“And that’s where good agents are separated in the current market.”
What agents can do now
For all the discussion about changing conditions, Scott’s prescription is remarkably straightforward.
- Get closer to serious buyers.
- Know what they are inspecting elsewhere and what they have already missed.
- Qualify their ability and readiness to purchase.
- Speak to vendors quickly and frequently.
- Look beyond price when a negotiation stalls.
- Give buyers the opportunity to make their own decisions rather than assuming their first offer represents their final position.
- Be transparent with both sides about what is actually happening.
None of it requires agents to reinvent the way they sell real estate. In fact, Scott argues the opposite.
“Agents don’t need to overcomplicate what they are doing,” he says.
“We get back to basics of speaking to potential vendors, speaking to vendors and speaking to buyers, and being open and honest and transparent around your dealings because that will stand you in good stead in the market as an agent in general.”
And while transactions may require more work to bring together, Scott is equally clear that a less buoyant market should not be confused with a market in which people have stopped transacting.
“It’s not dire out there. It’s just the market’s come off since the February peak.”
People still need to buy and sell, and transactions still need to come together, but the difference is that when buyers stop doing quite so much of the negotiating for you, the agent’s skill becomes much easier to see.