At a time that many are predicting real estate agents could be replaced by technology or a DIY outfit, it’s worth assessing the true value that a real estate agent brings to the table. Some may be tempted to ask if they bring any value at all. And that’s a good question to ask!


Most people who have bought or sold real estate realise the right agent is an asset and the wrong agent can be a liability.


Putting a value on estate agents is best broken down into segments:



Given the high stakes involved in real estate transactions, it’s frightening how easily someone can become a real estate agent. In Victoria, a rookie salesperson can go from absolutely no experience to selling real estate after completing just a 5-day course. An agent with a track record, good or bad, can be assessed and valued accordingly.



Many home sellers consciously or unconsciously value an agent more if/when they quote a higher expected selling price for the subject property. Given the agent is negotiating on the owner’s behalf, and not buying the property from the owner, a high quoting agent is not really a valuable commodity.


In order to build true credibility and value into a high quoting agent, we recommend negotiating the terms of their employment.


If the agent agrees to forfeit or reduce their commission if your property sells below their ‘quote price,’ this becomes a very valuable and quantifiable guarantee.


Conversely, you can also reward the agent more for a higher price if you wish.


This is not as silly as it sounds. Many sellers are aggrieved that the last $10,000, $50,000 or even $100,000 means a lot more to them than the agent. If the agent is on a flat commission rate of 2.5%, that equates to $250 for the agent and $9,750 to the sellers on every $10,000. You can easily see why the agent is keen to get the property sold and ‘move on’ under a flat commission arrangement.


Transaction/clearance rate

In searching for new business, most agents’ marketing messages consist of themes such as ‘we sold it’ and ‘we have a 100% clearance rate.’ Whilst there is a value transaction from a seller’s perspective, it should not be defined as the primary value offering.


High clearance rates benefit agents and high prices benefit sellers. Most agents get paid on the sale more so than on attainting the best possible result. A fair incentive-based fee arrangement will ensure your agent is focused on a sale at the best possible price, not just a sale.


After listing/sale service

There isn’t anything so persistent and keen as a salesperson in pursuit of the listing. But what happens once you list? Too many people are unaware of exactly ‘what happens after we list?’ Those that have poor experiences with agents often highlight a lack of feedback as a source of frustration.


Prior to employing an agent, get a written outline of the feedback process once you are on the market.


This may seem draconian. Once you have signed with the agent, it becomes much more difficult trying to build value into their service.


Risk of campaign

Vendor Paid Advertising (VPA) is the trap that most people don’t see coming. They naively think they have signed up to an ‘aggressive marketing campaign.’ They work out too late the agent has benefitted from the campaign through brand exposure at the owner’s expense.


Furthermore, if the offers come in below expectations, the owners have to wave goodbye to the VPA they ‘invested’ in or sell for less than originally desired. Whichever way they turn, it’s a lose/lose.


Before signing with an agent, ask yourself, ‘what is your risk and what is the agent’s risk?’



When you hire an agent, you are employing them to negotiate on your behalf. They are negotiating on your behalf with your money. Your home is not a generic commodity.


It is a unique offering that has a different value to different buyers at different times. To assess the agent’s ability to negotiate with your money, see how they negotiate with their own.


Ask them to reduce their commission and see how they handle themselves.


The wheels might just come off the whiz bang agent you were about to hire!


Fiduciary duty

An agent has a duty to act in the legal best interests of their clients, usually the seller. Buyer’s agents make up a fraction of the agent marketing, but they are growing in popularity.


Even though agents have a duty to act in the seller’s best interests, this does not means they should use unfair tactics on buyers. If they do so, they will probably have credibility issues in the marketplace.


The best agents for sellers are those that have the credibility for being straight and fair with buyers in the marketplace. Telling a buyer they can buy a property for $900,000 when the seller’s reserve is $1 million will usually backfire to everyone’s detriment.



Respecting the agent is more important than liking them as your new best friend. You are not employing a friend, you are employing a professional to negotiate on your behalf.


The best negotiators have a personable and assertive manner. They can disagree with you, without being offensive. A big grin and a ‘whatever it takes’ desire usually signals a desperate salesperson.


The best agents are listeners, not talkers.


Big talks miss small clues that can bring a negotiation together in the seller’s favour.


It’s you’re trying to navigate the real estate world, make sure you read 13 Things Your Agent Won’t Tell You.