Episode 111 | Conditioning vs Feedback: What Every Seller Needs to Know

In Episode 111, Peter O’Malley and Ciaran O’Brien unpack one of the most important issues sellers face during a sales campaign: the difference between genuine buyer feedback and agent conditioning. They explore how some agents win listings with overblown price expectations, then try to walk vendors back through negative commentary, and how sellers can spot the difference. It is a practical conversation about pricing, trust, market shifts, and the questions every vendor should ask before signing with an agent.

As always if there is a specific topic you would like for us to cover, please reach out and let us know!    

Transcript

SPEAKER_03 0:09

Welcome to the current mummer in some podcast, brought to you by Hummers Pumblers Real Estate. Each of us numbered reaching up with real estate author and industry leader, Peter O'Malley, to discuss the current property market conditions. And providing some money to assist you on your property journey.

SPEAKER_00 0:32

Hello everyone, and welcome to another edition of Current Market Insights. I'm your host, Kieran O'Brien, and with me is Mr. Peter O'Malley. Peter. Kieran, great to see you. Great to see you, buddy. I want to talk today about something that's really important in property, particularly on the sales side. I really want to talk to our listeners and get your experience around the big difference between conditioning and feedback. And I think it's an important distinction. It's one that every seller will experience throughout a campaign. If the agent's doing their job properly, they will experience one or the other. One of them we like, one we don't like. So what I thought we might do today is go through the topic of what is conditioning versus feedback. And if we can, let's start off by just explaining to our listeners what we mean when we talk about conditioning.

What Conditioning Looks Like

SPEAKER_01 1:18

Thanks, Kieran. Juicy subject, this one. Conditioning in real estate is when a real estate agent will praise a property, say whatever it takes to win uh favor with the prospective vendor, get the listing signed up. Um the praise is generally uh over the top, more so than the market reality, leaving the real estate agent with a new listing on the books, but overpriced at that with vendors who have got above market expectations because they've gone overboard. So what conditioning in real estate is is um bombarding the vendor of the day with negative feedback, which can take all sorts of uh shapes and sizes, if you like, and permutations, um, but bombarding the vendor with negative feedback as a means of driving their price back down to market reality. So things like uh the bedrooms are too small, it's dark, the living room's small, um, they don't like the main road, it needs a new kitchen, um, whatever information the real estate agent can use in the uh you know, under the guise of buyer feedback to say your house is not worth what you want it to be worth, and these are this is the reasons the buyers are telling me why.

Tell-Tale Signs You’re Being Played

SPEAKER_00 2:39

So you mentioned there that conditioning is negative feedback, and the comparison obviously we're making here is that conditioning and feedback are different things. Now, if you are a seller and you have an agent who is talking to you about the campaign, about buyer feedback, how can you distinguish what is conditioning versus what is just feedback? You know, because it's it's reasonable for a buyer to come through and say, Yeah, look, we like it, but the bedrooms are too small. How do we how would a seller know that their agent is being legitimate and that's the feedback versus uh an agent who is saying, hey, all the feedback or this feedback is that the bedrooms are too small with the intention of actually you know rediverting or manipulating the campaign?

SPEAKER_01 3:22

Well, look, conditioning is overwhelmingly negative.

SPEAKER_00 3:28

Right.

SPEAKER_01 3:29

So the real estate agent has the vendor signed up to a 90 or 120-day agreement, and the vendor doesn't have anywhere to go. They've invested eight to twelve thousand dollars on advertising, six to eight thousand dollars on styling, possibly, maybe move their tenant out if they're a landlord selling off um the investment property. Now they're strapped into a 90,000, 120-day campaign with a real estate agent who's gone from being the most optimistic individual in the world to the most pessimistic real estate agent in the world. Um, so there's some telltale signs there that you've been played, essentially. Um when the conditioning um the reasons for the conditioning are known issues, you should balk at them. The bedrooms are too small, the roads are busy, it needs a new kitchen, it needs a new bathroom. It really is a realtor's job to identify the pros and cons of any property prior to going to the market, but to suggest that um the market will see through these negatives being extremely optimistic about the price the agent believes they can achieve, and then circling back post-employment and saying, you know what, all of these reasons that existed before you signed up with me are now reasons as to why the buyers don't want to pay the price, that's a classic case of conditioning. The vendor has been usually profoundly misled into signing up with that real estate agent.

SPEAKER_00 4:56

So you your experience would be that typically, and I you know, I reflect on my own experience too. Uh, vendors will say, hey, you know, we we recognize the windows aren't double glazed and the road noises a bit much, or there's not a lot of light in the back two rooms, you know, we know that you want us how how should we campaign the property to deal with these things? Uh and so your experience would be that an agent who's looking to condition will say, No, no, no, look, of course, don't worry about those. Don't worry about the windows, don't worry about the noise, don't worry about the light. Uh, they're not issues at all. And then coming back in a week or two and saying, you know what? Everyone says the back room's too dark and the front room's too noisy because you don't have double glazing, yeah. Right.

“At This Price” And Market Reality

Lowball Offers As A Tactic

SPEAKER_01 5:33

And they may have been discussed prior to listing, or they may not have been. But a real estate agent that is zeroing in is unduly negative, excessively negative, um, in their feedback. It's kind of like uh I got I was brilliant on the weekend, Kieran. I got 15 prospective parties through your home, and the feedback is this, and it's a big long list of negatives. Yeah, and it's leaving the vendor like, well, did they is there anything they liked about the home? And the real estate agent leaves the vendor feeling as though like I've had 15 of the marketplaces best buyers through my home, and they all hated it. Yeah, now there's no doubt, there's no doubt, and this is uh uh a subtlety here is that the higher a price uh is for a property above the market price, the more negative comments you'll get. And the lower the price is relative to um a market price, the more positive the comments will be. And what you need to add as a um a vendor um after those uh uh comments is at this price. So when someone says, look, it's a nice home, but the road's too busy, you've got to think at this price if you're asking for a high price. If you're underquoting, and um let's face it, vendors knowingly let their real estate agent underquote the price of their home. I know something in Bell Main East where the owners wanted 3.8 to 4 million and it had an auction guide of 3.2 on it. Yeah, wow, and it sold for 3.7 something. So in that instance, the vendor knowingly underquoted. So when people are saying we love the park, we love the view, we love this, we love that, um, they're saying at this price, because at this price of 3.2, we're getting more property than we ever imagined we could get at 3.2 million. Uh, another um another conditioning tactic is for the real estate agent to give the vendor a low offer pre-auction. So the vendor might be looking for somewhere between a million and fifty and one one, um, and the real estate agent hits them with an offer of 975 in writing.

SPEAKER_02 7:40

Yeah.

SPEAKER_01 7:41

Now, um, the real estate agent hasn't said to a buyer that'll buy it, but they've said, hey, why don't you commit that offer to writing and I'll see what the vendor says? And that's a way of um having the vendor say, Well, geez, maybe a million and fifty to one one is a bit high in this market, maybe we should be reducing our expectations. Yeah. So the vendor, the the real estate agent's getting to auction day with a vendor that's been softened up.

When Conditioning Starts And Why

SPEAKER_00 8:06

Yeah, and in that second example, I mean, if you're in Western Sydney, Quakers Hill, perhaps, uh, they the agent might give you that writing, that offer in writing, and then uh, you know, put the whole team on it to get the sale done for you over the weekend. Uh, indeed, another uh another topic entirely. Just quickly, I um I wonder then if if you're a seller and you feel like you are well, you're going to this campaign. I mean, if an agent is thinking of conditioning you, how quickly into a campaign do you think the agent is likely to start using these tactics? Because, you know, are they coming into the campaign knowing that actually they've they've sold, they've bought the campaign, uh, as we've talked about before, and they just start it from day one, you know, and immediately the first open, they're coming in with this feedback to start the process. Or is it something that evolves typically in a campaign where they might start out just optimistically hoping it, you know, they jag a sale and then begin the systematic approach of chipping away at the vendor until they get it closed?

Market Shifts Vs Agent Spin

SPEAKER_01 9:03

Uh look, sometimes when an agent goes high on price to win a listing, they're consciously doing that. Sometimes they're honestly high, um, or they've overlooked a true negative as to why it's not going to achieve the lost lofty heights um that they want it to. Now, sometimes the market conditions change, and instead of saying, look, when I appraised your property in good faith, um, there wasn't a war in Iran. Yeah. Um, the market was uh um looking at interest rate cuts when we first started talking about selling this property. The market's now been delivered a rate hike with more coming. Um so this the situation's changed. But instead of having that full and frank conversation with the vendor, there's many real estate agents in the industry that are trained to just start conditioning their client.

SPEAKER_00 9:57

Yeah. So it's it's interesting though, because you mentioned that the the at this price point, which which is true, right? That's any, you know, lots of people overlook a boundary issue if it's a million dollars below what they expect it's worth, right? Uh but that highlights the case that there could be, if there is a market shift for significant and legitimate reasons, the at this price conversation comes back into play. That you know, the driveway being shared with someone wasn't an issue when the market was more stable. But now that we have all these other confounding factors, people are saying, well, at this price, so you know I'm not that happy there. And it's not true conditioning in that sense, right?

Today’s Listings Trump Old Sales

Adjust Early, Adjust Least

SPEAKER_01 10:36

It's at this price relative to the other listings that I'm seeing in the market. Yeah. So what we get as real estate agents, Kieran, all the time, is vendors waving a sale in our face, saying, Look what this property sold for two months ago. Yeah, my house is better than that, so I should get a better price. And I always say to vendors in those situations is a buyer will rarely look at recent sales and and be exclusively governed by a sale two months ago. They're more interested in what does my budget buy me in the market today? Yeah, so they're they're more interested in what's this property worth compared to other available listings at the market rather than a historic sale. So as a vendor, you need to be correctly positioned price-wise and presentation-wise against the homes that you're competing against. And we could be coming into market conditions where instead of buyers competing for homes, it's vendors competing for buyers. Yeah. And you need accurate pricing relative to the market of the day, the right presentation and the right real estate agent handling the transaction for you. And if your real estate agent does have to come back and not condition you, but give you market feedback because the conditions are are changing and changing against you as a vendor, the only thing worse than knowing that is not knowing.

SPEAKER_02 11:56

Yeah.

SPEAKER_01 11:56

Because let me tell you one thing about falling markets, if that's what starts happening at some stage this year due to the broader issues that are occurring, interest rates, global conflicts, etc. Those that adjust to the market conditions first adjust the least.

The Pub Test For Vendor Decisions

SPEAKER_00 12:11

Yeah. I guess the the only question I have for you then, because this is it's a complex topic and there is a lot around what you know what constitutes feedback versus conditioning. What is a vendor, what can a vendor do? Are there any questions they can ask? So let's say you come back to me with some feedback about something. Is there a way that a vendor who is in tune and and comfortable with their property can legitimately challenge feedback and determine whether or not they're being played? Yeah, or whether they are uh, you know, actual concerns that they could rectify.

SPEAKER_01 12:42

Well, we've discussed it before. The you know, the I think the the ATO test with expenses um is does it pass the pub test? Yeah, yeah. Well, you know, does what your real estate agent saying pass the pub test? So um uh we've we've got a a client at the moment, and we had all of the discussions about coming to market in late 2025, um, but we're always coming to market in early 2026. And um the vendor pulled the agency agreement out on me the other day and said, Well, this is what you said, and I had to say, I said, Come on, let's be fair to income here. I don't deny what I I don't back away from what I said, and she nodded, good, and when I said it. Yeah, and when I said what I said, we were in a rate cutting cycle because you've got to remember this whole we went from right more rate cuts to rate hikes in in two data sets in uh early November or late October last year. Um, I said so that story's changed rapidly, um, combined with the fact that we're now in a global conflict with oil going up, inflation accelerating again, and the and and and the whole table's being reset. So um, yes, I said what I said when I when I did in October, but we're in March, and we've got to play the market in March. We can't be looking back and saying, well, that's what you said back then, because it won't do you any good now.

SPEAKER_02 14:08

Yeah.

SPEAKER_01 14:08

And and it was at that point that what I was saying passed the pub test.

SPEAKER_02 14:13

Yeah.

SPEAKER_01 14:13

It's like this guy's not trying to condition me, he can only play with the conditions of the day.

SPEAKER_02 14:18

Yeah.

Choose Your Agent Before The Price

SPEAKER_01 14:18

And we don't know from this recording here and now what the conditions of the day are going forward for the vendors that are listening, Kieran. But what we can do is outline scenarios where does it pass the pub test? Is it market feedback or is it conditioning?

SPEAKER_00 14:35

Yeah, and I think it's reasonable for vendors to ask themselves the same questions. You know, sit back during the campaign and say, you know, it's worth a debrief in the middle and actually say, what are we up against here? You know, what let's let's try and objectively look through the property and say, what would I be worried about if I even reflect back when they bought it? What are the things that they may have paused or balked at at the time that they overlooked at the price at the time and see if there is anything they they could do differently or may have done differently. Uh, but I think ultimately, you know, we talk about this often. It comes back to when the campaign, before it even launches, before you sign that agency agreement, it comes back to having, you know, done your own research and getting a good sense of what the market is at the time you're looking to go and selecting your agent based on the right principles, morals, premise, you know, uh activity, statement, you know, whatever they're saying at the time, does it before you sign that agreement, does what they're saying pass the pub test.

SPEAKER_01 15:31

Vendors or prospective vendors who are interviewing real estate agents, Kieran, would make better agent selection decisions if they chose their real estate agent before they even got to the the point about price.

SPEAKER_02 15:48

Yeah. Yeah.

SPEAKER_01 15:49

Of course. They would make such better decisions. But the proposal or the presentation, whatever it is, whatever process they go through to select an agent, it is always colored based on what the agent's price is.

SPEAKER_02 16:02

Yeah.

SPEAKER_01 16:02

And it can wash you downstream very quickly without you knowing. And it's when you get on the market that reality comes dawning down on you.

Ask Tough Questions Before You Sign

SPEAKER_00 16:11

Do you think it would be reasonable as a prospective vendor? Final, final question for you, to ask an agent in an interview process, however they conduct that. I want you to give me a list of all the things that are going to make this challenging to sell.

SPEAKER_01 16:24

I think it's a terrific question. And you should you should treat the selection of a real estate agent like a job interview. Yeah. Um, this nonsense about asking for proposals. If you choose a real estate agent from a sales proposal, you're choosing the best graphic designer. 100%.

SPEAKER_00 16:39

And let's be fair, in this in this modern era, I would wager almost every agency that does that is pumping out AI manufactured like they're not they're not spending their time on these proposals. The system is punching it out for them.

SPEAKER_01 16:51

So what what you're touching on here, and we say this, is that you should always ask the real estate agent the tough questions before you sign. Can't ask them after. When do most vendors start asking real estate agents the tough questions after they've signed, in which case it's often too late.

Final Takeaways And Sign-Off

SPEAKER_00 17:06

Well, they're they're asking when the campaign's not going well. Yeah. Look, really great uh discussion, Peter. I think it's an important topic, and it does, you know, it does highlight the importance of treating it like a job interview. You know, you are hiring someone to sell your most likely or most valuable asset, which you can only sell once, and you're asking them to do the best job possible. Uh, I I'm with you. I cannot understand why people do that in such a nonchalant fashion and then you know haphazardly try and navigate through the campaign later on.

SPEAKER_01 17:34

They do it on feeling, they do it on emotion, they do it on gut feel, and then when the mechanics of the mechan the campaign are underway and they start seeing the fault lines in all of that, they start asking too you know the hard questions, but it's too late.

SPEAKER_00 17:49

It is too late. It's certainly not too late for our listeners out there who haven't signed an agreement yet and are out there looking for an agent. Uh, as we say, take your time, pick the right person. As always, Peter, really great chat today. I thank you for coming in. Thanks, Kieran, all the best. All the best to you, and thanks to everyone for listening to Current Market Insights. We look forward to speaking with you next time.

SPEAKER_03 18:08

Thanks for joining us on the Current Market Insights Pop Commus. Brought to you by Hummer's Pummetless Real Estate. The Popcom Musk providing real estate insights you won't find anywhere else.