Buying the Listing: Why Agents Quote High and What You Can Do About It

Why it works on you

Two things make this effective, and neither is about being naive.

The first is anchoring. Northcraft and Neale published a study in 1987 (Organizational Behavior and Human Decision Processes) that found both professional real estate agents and amateurs anchored to a stated listing price, even when told to ignore it. The higher the stated price, the higher their valuation. Once an agent tells you $1.4M, your brain treats that as the starting point. Every reduction from there feels like a loss, even when the correct market price was always $1.15M.

The second is the endowment effect. You've spent years in this house. Every renovation dollar, every weekend of maintenance, every birthday party in the backyard has been mentally capitalised into what the property is "worth." The agent who tells you the highest number isn't deceiving a sceptic. They're confirming what your own brain already believes.

This combination is why buying the listing works on smart people. It's designed to.

Why the commission model makes this inevitable

Traditional agents in Perth earn around 2.5% of whatever price they achieve. Follow that incentive for thirty seconds.

Quoting high costs the agent nothing. It wins the listing. Once you've signed an exclusive agreement, the agent has a locked-in seller and a guaranteed commission on whatever the property sells for. Quoting $1.4M and closing at $1.15M still earns a fee. The inflation isn't incidental to the commission model. It's a predictable output of it.

This isn't a moral argument. Most agents aren't bad people. They're operating inside a system where guessing high is rewarded and quoting honestly risks losing the listing. The incentive shapes the behaviour, not the character.

What "conditioning the vendor" looks like

Once you've signed, the appraisal has done its job. Now the agent needs to bring your expectations back to reality. This usually follows a pattern:

1. 1.Weeks 1–2:Home opens are scheduled. Buyer activity looks normal. No offers come in, or they come in well below the quoted price. The agent says "the market is still warming up."
2. 2.Weeks 3–4:The agent suggests a price reduction. They frame it as "the market is telling us something" or "buyer feedback is consistent." The reduction is usually 5–10%.
3. 3.Weeks 5–8:A second reduction is suggested. By now the listing has been on market long enough that buyers assume something is wrong with the property, not the price. The agent uses that stigma as leverage: "we need to meet the market."
4. 4.Weeks 8+: The property sells at or near the price a more honest appraisal would have started at. The seller has lost weeks of market exposure and the advantage of a fresh listing.

If you recognise this pattern mid-sale, you're probably already locked in. The time to protect yourself is before you sign.

What it can cost you

Buying the listing doesn't always cost thousands. Sometimes the market moves fast enough that the property sells anyway, just later than it should have. But when it does cause harm, the damage compounds.

Buyer attention is highest in the first 21 to 30 days of a listing. An overpriced listing misses that window. Buyers who looked at $1.2M in week one have bought elsewhere by week four. They don't come back when the price drops. By 60 days on market, buyer stigma sets in. Buyers assume something is wrong with the property, not the price.

The regulatory gap

Some states take this seriously. WA does not.

A search of REIWA's public disciplinary register doesn't surface a named WA case for a deliberately inflated appraisal. Perth sellers are largely operating without regulatory protection on this.

What to do about it

Six things you can do before signing with anyone.

1. 1

   Get appraisals from two or three different agents

   Not one. Two or three, from different agencies. If one agent quotes $1.3M and the other two quote $1.05–$1.1M, that spread tells you something. The outlier isn't necessarily wrong, but you should ask them to explain the gap with specific comparable sales.

2. 2

   Ask for three comparable sales

   Within 1km, same house type, similar land size. Ask whether they sold above, at, or below their listed price. In Perth's current market, nearly everything sells at or above. If the agent's comps all sold below, the data is stale or cherry-picked.

3. 3

   Check the comps yourself

   REIWA's sold search (reiwa.com.au/sold/) shows both the sold price and the original listed price. You can verify everything the agent tells you in ten minutes.

4. 4

   Get a formal valuation from a licensed valuer

   A registered land valuer (licensed under WA's Land Valuers Licensing Act 1978) charges $300 to $600, flat fee, regardless of the result. They have no incentive to win your listing. Their fee is the same whether your home is worth $900K or $1.4M. Formal valuations almost always come in lower than agent appraisals. That doesn't mean the valuer is wrong. It means the valuer is conservative by design, and the gap between the two numbers tells you how much optimism is baked into the agent's figure.

5. 5

   Ignore portal price estimates

   realestate.com.au and Domain both show automated price estimates when you search your address. These are generated by algorithms using comparable sales data. They're not appraisals. They're not valuations. They don't account for your renovations, your view, your layout, or your neighbour's extension. Treat them as a rough orientation, not a basis for pricing decisions.

6. 6

   Understand the difference

   Not all price opinions are equal. Here's what each one is, who provides it, and whether they have a reason to tell you what you want to hear:

   Type	Cost	Provider	Vested interest?
   Portal estimate	Free	realestate.com.au, Domain (automated)	None, but algorithm-only
   REIWA price estimate (AVM)	Free	reiwa.com.au (Cotality model)	None, but statistically blunt
   Agent market appraisal	Free	Selling agent	Yes (commission-based)
   Licensed property valuation	$300–$600	Registered land valuer	None (flat fee)

   A free appraisal from an agent is free because they're betting they'll earn it back in commission. That doesn't make it wrong. It means you should verify it.

The system is the problem

Buying the listing isn't an aberration. It's a rational response to a fee model that rewards winning listings over honest pricing. The incentive to guess high is built into the commission structure. Most agents aren't bad people. They're operating inside a system with a design flaw.

Perth sellers can protect themselves by getting multiple appraisals, verifying the comps, and understanding that a free appraisal is not independent advice. A fixed fee removes the incentive to inflate. When an agent earns the same regardless of what your property sells for, there's no reason to quote high and walk you down later.