Key takeaways
Most real estate agents are professional and operate in a heavily regulated industry. Deliberately misleading buyers can have serious legal and reputational consequences.
Some agents use psychological tactics to create urgency and competition. Claims about other buyers, offers and deadlines can pressure purchasers into acting quickly.
Knowledge is a buyer’s best defence. Understand local market values, recent comparable sales and the property’s true worth before negotiating.
Never rely solely on verbal promises. Conditions and special requests should be included in the contract and reviewed by a solicitor or conveyancer.
Agents ultimately work for the seller. Their reputation depends on achieving strong results, while maintaining integrity with buyers who may become tomorrow’s vendors
Are real estate agents honest, or do they just bend the truth enough to get the deal done without getting sued?
It's a question worth asking, because agents have had a bruised reputation for decades.
In my years working alongside many different agents, I've seen the good, the bad and the occasional ugly.
But let's start with this... Most agents aren't the money-hungry vultures the media sometimes likes to paint them as.
And I'm not knocking the media here, they're just chasing a story that gets people talking.
In reality, the vast majority of agents are ordinary people doing a demanding job in a brutally competitive industry, trying to be the best version of themselves they can be.
It's usually the odd rogue agent who gets caught out by the the media or Fair Trading, because the paper trail eventually catches up with everyone.
I'll admit most agents don't walk in with a university degree, and plenty haven't had an easy run to get where they are. They've failed at other things along the way, but what they do understand is real estate and people.
Some of the best agents in the business were never the star students at school, they just found the one arena where they could shine.
It is a heavily regulated industry
Most agents I've dealt with are simply trying to do their job properly without ending up on the wrong side of the law.
And these days, thanks to the actions of a rogue minority, the whole industry is heavily regulated, and agents can be audited at any time without warning.
On top of that, the rise of "no win no fee" lawyers has made most agents genuinely nervous about saying or doing the wrong thing by anyone.
Under the law, real estate agents hold a position of "high degree of trust."
Now that's a little ironic, given they've consistently ranked among the least trusted professions in the country.
Roy Morgan's long-running Image of Professions survey has had agents sitting near the bottom of the ladder for decades, usually only ahead of car salespeople and advertising executives when it comes to perceived honesty.
It's exactly because of that high degree of trust expected of a Real Estate Agent, that when an agent does commit an offence, the courts tend to judge it more harshly than they would judge an ordinary person. It's treated as a breach of trust, not just a mistake.
The truth about real estate agents lying
When agents go through their training, they're told in no uncertain terms about the long list of laws they can be penalised under, and there are a lot of them.
So if an agent deliberately or recklessly lies for financial gain, they're playing a dangerous game with the regulators, and it's a game the regulators usually win eventually.
Most agents, in my experience, genuinely want to do the best job they can for buyers, sellers, landlords and tenants alike.
Are agents allowed to lie about having multiple offers?
This is one of the most common worries I hear from buyers, and I understand why. It leads to plenty of heated conversations at the kitchen table about whether to make a higher offer for that dream property.
I do know of agents who, when desperate to move a property, will claim there are other offers on the table when there aren't.
The smarter operators avoid outright lies and instead say something like "we have multiple interested buyers," which sits on the right side of the law even if it's designed to create pressure.
Agents are bound by a strict code of ethics, and Fair Trading takes breaches of that code seriously.
8 tricks real estate agents play
As a buyer's agent, I’ve dealt with my fair share of real estate agents, and I've found most of them follow a very professional code of conduct, however, a handful adopt certain tactics and turns of phrase designed to push a wavering buyer over the line, and I've heard pretty much every version of it by now.
In a rising market especially, FOMO takes hold of a lot of buyers. They start to feel the market is running away from them, which makes them far more susceptible to a persuasive selling agent.
In today's flatter property markets, estate agents need to use different tactics to encourage buyers to make an offer.
So here are eight little "white lies" agents sometimes tell, and what's really going on behind them.
1. We have another interested party
Essentially they’re implying another buyer is waiting to pounce if you take too long to make your move, thereby playing on your fear of ‘losing out’ to ‘the competition’.
This creates a sense of urgency and can be a very effective psychological play in tipping a hesitant purchaser across the line.
While you shouldn’t necessarily dismiss the possibility that someone else is nipping at your heels, never feel pressured into a purchase because you might not be the victor in what’s possibly a fictitious battle.
A good way to test the claim is to ask whether a signed contract has actually been presented to the vendor.
And remember, in real estate there's always another deal somewhere down the track, so don't be afraid to walk away from this one.
2. We’ve had an offer of…
This works much the same way, nudging a reluctant buyer toward making a real offer of their own. Ask whether that other offer came with a signed contract of sale.
If the answer is no, then you're competing with a verbal proposal at best, or nothing at all at worst. Don't let that back you into a corner.
3. We haven’t had as much interest as anticipated
Agents who love a good auction are particularly fond of this one.
They'll often set a guide price that's well below what the property is actually likely to fetch, then reinforce it with talk of sluggish interest, giving you false hope of picking up a bargain on the day.
Before you spend money on pest and building inspections chasing that bargain, do some homework on the local market. Ask what reserve the vendor is likely to set, and while you probably won't get a straight answer, you can measure the response against recent comparable sales.
- Also read:How much do buyer’s agents charge in Australia
- Also read:What laws do real estate agents have to abide by?
- Also read:The offer and acceptance process when buying a property
- Also read:Caveats: The hidden red flags smart property investors never ignore
- Also read:What property sellers have to disclose
You could even ask what price was quoted on the original listing authority. Knowing your local market cold is the best way to tell the difference between a genuine soft market and a clever ploy to drum up competition on auction day.
Worth noting too that underquoting is now specifically regulated in several states, including Victoria and New South Wales, so agents who deliberately quote well under a realistic price range are taking on real legal risk, not just a reputational one.
And shortly, properties going for auction in Victoria will be required to disclose the seller's reserve a week before the auction.
4. The vendor wants contracts signed up tonight
Really? If a vendor genuinely had more than one keen buyer, most would be happy to let the competition play out rather than rush things.
So when an agent starts applying hard deadlines like this, there's a decent chance they've got somewhere else to be, or the vendor never set that deadline at all.
If you need more time for due diligence or inspections, put your offer in writing with a clear conditional clause attached.
5. The vendor hasn’t really given us a good indication of their expectations yet
Any real estate agent worth the commission they’re paid knows what their client wants, whether they’ve stated it outright on a sales authority form, or in subtle undertones during a casual conversation.
If you're being stonewalled here, try a different angle and ask what kind of limit you should set for yourself on auction day given the level of interest shown. That usually forces some kind of useful figure out of them rather than a polite dodge.
6. We’re happy to present any offers prior to auction day
This can tell you a lot about the vendor's circumstances, including whether they have a specific deadline to sell.
Agents will often use pre-auction offers to test buyer appetite and help the vendor set a realistic reserve.
Some agents will use this against emotional buyers. If you put in a generous offer early, that number can end up shaping a higher reserve, and you may find yourself competing to meet the very figure you set.
7. You don’t need a solicitor to look over the contract
Err, no! How does a real estate agent know whether the vendor’s statement (in Victoria) is accurate, for a start?
‘Buyer beware’ definitely applies to the significant financial commitment you make when purchasing a property investment.
It’s essential that you have any contract ok’d by your solicitor or conveyancer before it becomes unconditional and you’re locked in.
8. We don't need to include that as a special clause, the vendors will be fine with it
It's tempting to trust a verbal assurance, but there are no guarantees without a signed, agreed and executed contract.
Note: Remember, ‘He told me so!” is not a legitimate legal argument.
Anything you want honoured needs to be written into the contract, not left to a handshake.
How to call their bluff about another offer
The best protection against an agent stretching the truth is preparation.
Get a solid handle on the local market and recent comparable sales before you start negotiating, and if you're unsure, a buyer's agent can help translate "agent speak" for you.
It might cost a little more upfront, but it can save you far more down the track.
Some buyers try the tactic of holding firm, showing no interest, refusing to raise their offer and waiting to see what the agent does next.
Sometimes that counteroffer never comes, and it turns out there really was another buyer. That's often how people get gazumped, and it usually comes down to a lack of negotiation skill rather than a dishonest agent.
Some people console themselves by saying there are other properties out there. That's true, but it might take another six months to find one you love as much.
A simple way to cut through this during negotiation is to ask directly, "Are you sure there are multiple offers on this property, because it's illegal for you to lie to me about that?"
It gives the agent a graceful way to correct themselves if they've overstated things, and it's also a good test of how they handle pressure. If they hold their ground, at least you know where you stand. I've used this line myself, confirmed there genuinely were multiple offers, and it helped me secure the property against higher bids.
Negotiating with the seller directly good or bad?
Some buyers, frustrated by a multiple-offer situation, go and door-knock the vendor directly hoping for a straight answer.
In my experience, this usually creates more stress and ill will for everyone involved, not less.
Think about what you could be walking into. The seller might be annoyed you went around the agent, or insulted that your offer was too low for a home they love.
If it's a couple going through a divorce, you might end up talking to the one who doesn't want to sell at all, and that can get emotional fast. Or you and the vendor simply don't click on a personal level, and that alone can sour a deal that otherwise made sense.
Remember, there's usually a reason the vendor hired an agent in the first place. Most people don't want to negotiate directly, or they'd be selling the property themselves.
What drives real estate agents, to sell properties for more?
Agents don't gain much financially by squeezing a slightly higher offer out of you.
If an agent talks you up by $2,000 on an $800,000 property, they might only pick up somewhere in the order of $100 extra in commission, depending on their fee structure and split with the agency. Once the office takes its cut, there's not a lot left over.
So what actually motivates an agent to chase the best possible price for their vendor?
It comes down to reputation. Real estate is still a very old-school, relationship-driven industry, and word of mouth carries enormous weight. I can't count how many people have chosen to sell with a particular agency purely because friends or family told them that agency consistently gets strong prices in their area.
Agents also owe a fiduciary duty to act in the best interests of the seller, and there's no getting around that.
But smart agents also know today's buyer is tomorrow's seller. Burn a buyer with a lie now, and there's a good chance that person won't come back to sell with you in a few years' time.
There's genuine satisfaction for a good agent in getting a call from a past buyer or seller once the dust has settled, hearing that the whole experience made their life a little easier.
Plenty of agents do well financially, but the ones who get into the industry purely chasing money rarely stick around for long.
