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Why Your Agent Should Provide You With a Minimum Price Guarantee

When you list your home for sale, you deserve honesty, confidence, and accountability — not empty promises. A Minimum Price Guarantee is one of the most powerful tools a seller can ask for. It ensures your agent is truly committed to delivering the result they claim they can achieve.

What Is a Minimum Price Guarantee?

A Minimum Price Guarantee is a written commitment that says:
“If we don’t achieve the agreed minimum sale price, our fee or commission will not apply.”
This guarantee is included in the agency agreement or as a formal written addendum before the campaign begins.

Why You Should Require It

  1. It Prevents Overquoting
    Some agents overinflate the expected sale price just to win your listing — then shift expectations later.
    A price guarantee forces them to be honest upfront, not just tell you what you want to hear.
  2. It Holds the Agent Accountable
    If an agent truly believes in the price they’ve recommended, they should be willing to stand behind it.
    No result, no fee — simple as that.
  3. It Aligns Your Interests
    You want the best possible price. The agent should want the same.
    A Minimum Price Guarantee creates a shared goal: they only get paid when you’re happy with the outcome.
  4. It Reduces Pressure to Undersell
    Without a guarantee, some agents may push you to accept a low offer just to close the deal.
    With a guarantee, they have every reason to hold out for the right buyer — not the first buyer.
  5. It Brings Confidence and Clarity
    This is about more than price — it’s about trust.
    A guaranteed minimum gives you peace of mind that your agent is committed, not just hopeful.

Documented From Day One

The guarantee is:

  • Written into the agency agreement, or
  • Attached as a formal commitment before any marketing begins.

This ensures the agent can’t shift their story once the campaign is underway.

Final Thought

If your agent won’t offer a Minimum Price Guarantee, ask:

“Do they really believe in the price they’ve quoted — or are they just trying to win my listing?”

A great agent backs their advice with action.
A Minimum Price Guarantee is how they prove it.

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Why Undertaking a Pre-Inspection Building, Pest and Compliance Report Before Going to Market Is So Important

Formal Disclosure Reports (Required by ACT Law)

To legally advertise a residential property for sale in the ACT, the following reports are mandatory and must be included in the Contract for Sale:

  •  Building Inspection Report
  • Pest Inspection Report
  • Compliance Report
  • Energy Efficiency Rating (EER) Report

Typical total cost: $1,600–$1,800

Under the Civil Law (Sale of Residential Property) Act 2003 (ACT), the buyer is required to reimburse the seller at settlement for:

  • Building Inspection Report
  • Pest Inspection Report
    (Total reimbursement: approx. $950–$1,100 including GST)
The following costs are not reimbursed:
  • Energy Efficiency Rating (EER)
  • Compliance Report
  • Government file fees
  • Any fast-track, travel, or additional charges

It’s the Law in the ACT

You cannot legally advertise a residential property in the ACT without these reports being:

  • Fully prepared
  • Bundled into the Contract for Sale
  • Made available to buyers before any marketing begins

Legal Basis

Civil Law (Sale of Residential Property) Act 2003 (ACT):
  • Section 9 – Seller must prepare required documents
  • Section 10 – Lists what’s required
  • Section 11 – Contract must include all required documents
Failure to comply can delay or invalidate your sale.

Why You Should Conduct an Informal Inspection First

Before ordering your formal reports, we strongly recommend completing a pre-inspection report — an informal review of the property to identify and resolve issues early.
Once a formal report is completed, any changes or repairs made afterward must be officially documented, which can cause:
  • Extra costs
  • Delays
  • Buyer concern or confusion over inconsistencies
A pre-inspection report allows sellers to:
  • Fix minor maintenance issues (e.g. leaks, cracked tiles, rusted gutters)
  • Resolve or investigate unapproved structures (e.g. sheds, pergolas, decks)
  • Ensure rooms are correctly classified (e.g. legal bedrooms)
  • Confirm approvals and documentation are complete and compliant
These are inputs you can fully control. Fixing them early avoids renegotiation, speeds up exchange, and builds buyer confidence.

What If You Identify a Problem?

If your informal inspection uncovers unapproved structures or incorrect room classifications, you have two clear options:
  1. Seek retrospective approval via a Certificate of Occupancy
  2. Include a special condition in the contract to:
    • Fix the issue before settlement, or
    • Disclose it and sell as-is with buyer acknowledgment
This proactive approach protects your sale and keeps you in control.

Our Pre-Sale Strategy: Eliminate Problems Before They Cost You Buyers

We’ve developed a proven strategy to eliminate 95% of the issues that typically derail or delay property sales:

  • We fast-track Certificates of Occupancy for unapproved structures
  • We engage trusted trades to complete minor compliance and maintenance work
This gives our sellers a major advantage:
  • Fewer buyer objections and contract conditions
  • Faster exchange with fewer delays
  • Higher sale prices with reduced risk of renegotiation
  • More registered bidders and stronger auction competition
We don’t wait for problems — we fix them before the campaign begins.
That’s how we protect your price, your timeline, and your peace of mind.

Optional: Pre-Inspection Report (Highly Recommended)

While not required by law, a pre-inspection report is one of the smartest investments a seller can make before ordering formal disclosure reports.
Typical cost: ~$750 (paid by the seller)
Includes:
  • Informal building and pest check
  • Review of structure approvals
  • Bedroom classification checks
  • Repair and compliance recommendations
This cost is not reimbursed by the buyer, but it helps prevent delays, surprises, and renegotiations — making it well worth the investment.
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Why Most Agents Underquote – And What Sellers Need to Know

Underquoting is when an agent tells buyers a property is worth less than what the seller expects — and often less than what the agent actually believes it will sell for. It’s widespread in auction campaigns and often explained as a way to “generate competition” or “let the market decide.” But the reality is more strategic — and more self-serving.

1. The Primary Reason: To Condition the Seller Using Buyer Activity

Underquoting isn’t always about finding the highest bidder —
It’s about using buyers to educate or condition the seller.
Here’s how it plays out:

  • The agent quotes low to attract more buyer interest.
  • Come auction day, 4 or 5 bidders register — all below the seller’s expectation.
  • The agent turns to the seller and says:
    “We had competition. We had interest. But the market isn’t at $1.2M — you should seriously consider this $1.05M.”

The presence of buyers — who were never likely to pay full value — is used to justify a lower result and protect the agent’s position.

  • It’s not a selling strategy — it’s a conditioning tactic.

2. Because Everyone Else Is Doing It — A Race to the Bottom

This is the most commonly accepted excuse, and it’s more legitimate than many realise:
“If I don’t underquote, I won’t get any bidders — and that’s more embarrassing than quoting low.”
  • Agents believe most buyers mentally factor in a 10%+ price buffer.
  • Competing agents are underquoting, and buyers compare homes based on advertised ranges — not what they’ll actually sell for.
  • The fear is: if they quote honestly, no one will show up and the campaign will fall flat.
So agents underquote just to stay in the game — not because it’s right, but because they’re afraid not to.

3. Because It’s Easy — And It Usually Works

Underquoting has become the default setting for many sales teams.
As the old-school line goes:
“Pitch it low and watch it grow.”
This strategy is often pushed by unimaginative sales managers and agents who want to avoid accountability.
  • It creates instant inspection volume
  • It builds momentum leading into auction
  • It inflates the perception of demand
  • It lets the agent say: “We had a great campaign” even if the price falls short
It’s not about delivering excellence — it’s about playing it safe.
And most importantly:
It works — just often not for you, the seller.
It works for the agent because it gives them:
  • A crowd at auction
  • Data to justify a lower sale price
  • A chance to shift blame from their overpromise to “market reality”
In many cases, the agent isn’t trying to maximise your price —
they’re trying to manage the campaign with the least resistance.

Bonus Insight: Want to Know If Your Agent Is Underquoting? Test Them.

Agents often avoid publishing a price guide in the ad —
– claiming it’s either to “let the market decide”
– or to “cast a broader net of buyer price ranges.”
But here’s the real reason:
– They know that if they publicly advertised the price they told you — or what’s written in the agency agreement — it would kill buyer interest and kill the auction.
So instead, they keep the listing vague.
But the moment a buyer enquires, they quietly offer a lower price guide to get them emotionally hooked.

The Simple Test

Want to know what your agent is really telling buyers?
Get a trusted friend or colleague (someone the agent doesn’t know) to call and ask:
  • “What’s the price guide?”
  • “Roughly what do you think it’s worth?”
Then compare that answer to:
  • What the agent told you in your listing appointment
  • What’s written in your agency agreement

What You’ll Likely Hear

“Buyer feedback has been around $950,000 to $1 million…”
Even though you were told $1.2 million was realistic.
That number wasn’t chosen to reflect value — it was chosen to:
  • Generate interest
  • Inflate enquiry
  • Create the illusion of momentum

What Happens Next?

  • The agent builds a list of “interested buyers” —
    most of whom were never prepared to pay your price.
  • On auction day, the agent turns to you and says:
    “We had strong interest — but the market isn’t at your number.”
This isn’t a transparent pricing strategy.
It’s a conditioning script — designed to manage both buyer and seller
without committing to either.
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Why Flat Fee Agents Cost You Money

Whether it’s a flat 1.5% or a flat $15,000 fee — if that’s how you’re choosing your agent, chances are you’ve already out-negotiated your negotiator — the person meant to represent you throughout the sale.

The Real Cost of a Flat Fee Agent

If your agent is getting a flat fee — say, $15,000 to sell a $1,000,000 property — what’s their incentive to push harder?
Whether your home sells for $950,000 or $1,020,000, they get the same fee.
There’s no motivation to extract every last dollar from buyers. No reason to drive more interest. No urgency to negotiate fiercely on your behalf.

3 Reasons Flat Fee Agents Could Be a Very Expensive Mistake

1. No Performance Incentive

If your agent is getting a flat 1.5% or $15,000 regardless of the result, they have no financial motivation to chase stronger buyers or negotiate harder. Once they believe your property will sell, the easiest offer becomes the one they push — even if it’s not the best one.
– Real example: A buyer is willing to pay $50,000 more but wants a 90-day settlement. The extra fee to the agent? Just $750. For you, it’s $50,000. For them, it’s not worth the extra effort.

2. Minimal Effort Once “Good Enough” Is Reached

We’ve seen flat fee agents quietly avoid or ignore buyers who require more work — longer settlements, finance clauses, or clarification on approvals. Why? Because there’s no upside for them to chase multiple buyers or manage complexity once they’ve secured a basic level of interest they believe you’ll accept.
Let’s assume your agent believes you’ll be happy with $1,000,000 — and they have two buyers hovering at that level. This is common with high-volume agents. They’ll “park” those buyers, confident they can lock in a sale whenever they need to.
– They stop pushing. They stop negotiating. And they stop seeking better buyers — because there’s nothing in it for them. You think you’ve saved on commission — but you’ve actually lost the buyer willing to pay more. That’s not saving — that’s underselling.

3. Speed Becomes the Agent’s Priority

With no link between your sale price and their income, flat fee agents are rewarded for speed, not strategy. Their business model is built on fast turnover — not careful negotiation.
– The quicker they close your deal, the sooner they move on to the next listing. That’s great for them — but could cost you tens of thousands.

If They Can’t Negotiate Their Own Fee — They Can’t Negotiate Your Sale

Before you appoint an agent, ask them one simple question:
“Do you work on a flat fee model?”
If the answer is yes, and they accept it without resistance or explanation, that’s a red flag.
Because here’s the truth:
If your agent can’t even negotiate their own fee — how will they ever negotiate the highest possible price for your property?
Flat fee agents who fold on their own value will do the same when negotiating with buyers. They avoid tension, prefer convenience over conflict, and settle early — often leaving tens of thousands on the table.
Let’s be blunt: this is someone you’re trusting to negotiate one of the biggest financial transactions of your life. If they’ve already shown they can be talked down, what do you think will happen when a buyer pushes?
– A strong agent defends their value. They’re confident, firm, and prepared to explain their worth — because they plan to do the same for your property.
If they can’t hold their ground when it’s their own money, they won’t hold the line when it’s yours.

A Better Way: Incentives That Align With What Matters

Instead of a flat fee, smart sellers structure their agreement around performance — where the agent’s reward is linked to delivering on what actually matters:

1. Price

The agent should be motivated to get you the highest possible sale price.

2. Speed (Time)

If timing matters — e.g. selling before a deadline or lining up settlement — the agent should prioritise that too.

3. Minimum Fuss

Sometimes it’s not just about price — it’s about peace of mind. A good agent should manage the process with minimal disruption to your life.
– The best outcome comes from a structure where your goals — not theirs — drive the strategy.

Our Recommendation: A High–Low Fee Structure Chosen by You

We advocate for a high–low performance-based fee, where you choose the final commission based on the result delivered.
Example:
  • Low Fee: 1.5%
  • High Fee: 3%
You select the fee at the end of the campaign — based on how well your agent delivered on your goals.
This keeps your agent fully invested through to the finish line. It encourages them to chase every dollar, manage complex buyers, and reduce campaign friction — not just get a quick sale.
– If you feel your agent has done everything to maximise the outcome — in terms of price, timing, and ease — then rewarding them is fair. If they haven’t, you have control.
This model creates true alignment of economic interests — and alignment is where exceptional results are achieved.
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The Hidden Cost of Underquoting: A Real Auction Scenario

Auction day should be the moment everything comes together — strong bidding, serious buyers, and a confident result. But when underquoting becomes the core strategy, the result is often very different

The Setup: Silent Guide, Loud Assumption

The campaign launches without a formal public guide.

But when buyers make enquiries — as they always do — the agent consistently says:

“We’re guiding around $900,000.”

This becomes the psychological anchor.

Buyers adjust.
Some stretch.
Others secure finance based on that figure.

Auction Day Arrives

There are 5 registered bidders.
Bidding starts strong.
The energy is real.

Then —
The top bid lands at $950,000… and stalls.

The other four bidders drop out.
They’ve hit their limits — shaped by the guide they were given.

The Moment It Falls Apart

The agent walks over to the top bidder:
“The reserve is $1,050,000.”
The buyer is stunned:
“This is above what you pitched. No one else is bidding — this is the market.”
Momentum disappears. So does trust.

The Power Has Shifted

The buyer now holds all the leverage.
The seller is backed into a corner:
Reduce the reserve or risk a pass-in.

The agent has lost credibility with both sides.

Underquoting may have created early interest —
But it has undermined confidence at the moment it matters most.

The Seller Relents

Backed into a corner by:
  • A stalled auction
  • A guide–reserve mismatch
  • Weeks of emotional and financial investment

…and under pressure from the agent, the seller drops their price to $1,000,000.

Not because it’s a win —
But because they feel worn down and just want it over.

Sensing opportunity, the buyer moves $20,000 to $970,000 — and with no other active competition, the seller has no real choice.

The property is sold for $970,000 — not because it was the best offer, but because the process left the seller with no better alternative.

The Real Cost of Underquoting

This isn’t strategy.
It’s damage control.

A campaign built on lowball pricing:

  • ✅ Attracts attention
  • ❌ Undermines trust
  • ❌ Weakens true competition
  • ❌ Leaves the seller exposed at the critical moment

How to Prevent This Happening

It’s our strong contention that it’s better to have one or two bidders at your level than five bidders well below it.
The most effective auction campaigns:
  • Set clear and honest expectations from day one
  • Align the public guide with the seller’s reserve
  • Focus on attracting the right buyers — not just more buyers
  • Build trust and momentum that carries through to auction day

The goal isn’t just interest — it’s alignment.
Because on auction day, it’s not the number of bidders that matters — it’s how close they are to your price.

That’s why a published reserve or an at-level price guide should be considered from the outset — or at the very least, by week two of the campaign.

This should be supported by flexible settlement terms, tailored special conditions, and buyer-friendly deposit arrangements — all designed to reduce friction and make the deal as attractive as possible to qualified buyers.

And above all — have someone skilled in the art of negotiation, whose strategy isn’t just to overprice to win the listing and then underquote to attract buyers.

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