The Science of Getting More for Your Home: What Research Reveals About Agent-Buyer Relationships and Sale Prices

Why the conversation your agent has with a buyer after the open home is worth more than everything you spent on styling, photography, and marketing combined

In 2008, economists Steven Levitt and Chad Syverson published a paper that should have changed the way every Australian sells their home. It didn't — because the finding was uncomfortable, and the industry had no interest in broadcasting it.

They analysed 98,000 home sales in suburban Chicago. Within that dataset were approximately 3,300 homes owned by real estate agents themselves. The question was simple: when agents sell their own homes, do they get a better price than when they sell yours?

The answer was yes. Agent-owned homes sold for 3.7% more and stayed on the market 9.5 days longer than comparable homes sold on behalf of clients.¹ In more complex, heterogeneous neighbourhoods — where property knowledge is harder to acquire — the premium climbed to 4.3%.¹

On a $1.2 million Gold Coast property, 3.7% is $44,400.

The agents weren't doing anything illegal. They were simply deploying their full skill set when the financial benefit accrued to them personally — and not quite deploying it when the financial benefit was someone else's. The study didn't prove agents were corrupt. It proved they were human.

What Those 9.5 Extra Days Actually Represent

The 9.5-day difference is as important as the price differential. When agents sold their own homes, they waited longer. They ran more open homes. They kept the campaign alive when a commission agent — representing someone else's property — might have said: "Look, we have an offer, I think we should take it."

Levitt and Syverson ran the maths on why this happens. On a $300,000 home, a 1% increase in sale price earns the agent approximately $167 more in commission. Getting that extra $3,000 for the seller requires significant additional work. The agent who is representing you has a financial incentive — very small — to hold out for a better offer. The agent who owns the home captures the full $3,000.¹

This is not an argument that your agent is deliberately working against you. It is a structural observation about where incentives point. Most agents are ethical. But the structure of how agents are paid means that patience, persistence, and deep buyer relationship management are more likely to appear when the agent's own equity is on the line.

The research question that follows is obvious: is the skill real, and if so, can it be deployed for sellers rather than for agents?

The answer to the first question is definitively yes. The answer to the second depends on who you hire.

The Conflict of Interest Has Not Dissolved

It is worth noting what has changed — and what hasn't — following the landmark NAR settlement that took effect in the United States in August 2024.

The settlement was widely expected to disrupt how buyers' agents are compensated, and the Australian market has watched closely for signals about where commission structures might head. The early evidence is instructive.

A Federal Reserve Board of Governors paper published in May 2025 — "Commissions and Omissions: Trends in Real Estate Broker Compensation" — studied buy-side compensation trends across the US market. The finding was direct: buy-side commission rates have fallen modestly, from roughly 3% in the 1990s to around 2.7% in the 2020s, but those declines are not related to buyer agreement requirements.² The researchers concluded that rising home prices and technology improvements were more likely explanatory factors — and that when controlling for home prices, the downward trend in commission rates largely disappears.²

The structural conflict identified by Levitt and Syverson remains intact. A separate Richmond Fed analysis published in March 2024 found that the standard buyer-agent compensation structure may lead to elevated home prices, overused agent services, and prolonged home searches — and estimated that shifting to a cost-based commission system could increase consumer welfare by $38.52 billion a year.³

The same asymmetric information problem that Levitt and Syverson documented in Chicago in 2008 is operating today in every suburb on the southern Gold Coast.

The Spread Between Agents Is Enormous

A 2024 study published in Real Estate Economics confirmed that local market knowledge — specifically, how close an agent operates to their own transaction median — is the strongest predictor of sale price outcomes among all measurable agent characteristics.⁴ Licence duration barely matters (0.2% effect). Transaction volume matters modestly. But an agent who knows their micro-market intimately — who knows which buyers are in play, what they've already bid on, and what they're willing to stretch to — produces prices approximately 1.2% higher than an agent parachuted in from outside their territory.⁴

The reason is not mystical. It is informational. The micro-market specialist knows the buyers before the listing even launches.

Mat Steinwede, who built his career to become the #1 agent in the McGrath national network from the comparatively modest market of Terrigal on the NSW Central Coast, describes his method plainly: before a property hits the portals, his team has already called every motivated buyer in their database. By the time the first public open home runs, the serious buyers are already competing. His team tracks finance status, preferred settlement dates, and past offer positions for every buyer they have ever worked with. John McGrath — who has observed thousands of agents across his career — has described Steinwede as "amongst the best negotiators I've ever come across."

The competitive advantage is not charm. It is intelligence management.

The $82,500 Offer That Beat Six Higher Bids

In July 2025, researchers Alice Lee from Cornell University and Daniel Ames from Columbia Business School published a study that is the most direct empirical support for the agent-buyer relationship thesis yet found in the literature.

They studied what happens when sellers are emotionally attached to a property — a family home, an inherited asset, somewhere the memories live. In a controlled experiment with 311 participants, they presented sellers with seven competing offers on a family cottage listed at $90,000.

One of those offers was framed as a "caretaker" offer — the buyer communicated their emotional connection to the property, their intention to preserve it, their desire to become the people who would care for it next. The caretaker's financial offer was $82,500 — the lowest of the seven bids.

Sellers with high emotional attachment were 50% more likely to open the caretaker message. They were more than twice as likely to open it first — ahead of higher offers.

This is not a soft finding. It is a direct measure of how buyer framing influences which offers get serious consideration. The caretaker buyer — with $7,500 less money on the table than the list price — was able to displace six higher bids from the seller's attention simply by communicating the right story.

A skilled agent understands this dynamic and operates on both sides of it simultaneously.

When representing a seller, they help their client stay focused on financial terms and resist the pull of buyer emotional framing. When they encounter an emotionally unattached seller — someone selling a rental property, a deceased estate agent selling for beneficiaries, an investor liquidating — they know the framing game is off the table and pure price dominates.

When they encounter an emotionally attached seller, they know that managing competing offers requires more than reading out the numbers. The offer dynamics need to be managed carefully so the seller doesn't inadvertently choose a $50,000 cheaper outcome because the buyer wrote a nice letter.

Most agents do neither. They take the highest offer and present it. That is the "order taker" in the industry shorthand — the agent who relays bids without mastering the buyer dynamics that produced them.

The Negotiation Science Your Agent May Not Know

The evidence base on agent-buyer relationships doesn't live only in real estate economics journals. Some of the most useful research comes from psychology and negotiation science.

Rapport is economic leverage, not pleasantry.

In a study by Janice Nadler of Northwestern University, law students negotiated a commercial transaction by email. One group had a brief prior phone conversation — small talk, not related to the deal. The other group went straight to negotiation. The group who engaged in small talk first were more than four times as likely to reach agreement. In the no-small-talk group, nine of fourteen impasses arose in situations where both parties would have been economically better off accepting the deal.

The conversation before the price discussion changes the price discussion. An agent who builds genuine rapport with a buyer — who knows their name, their story, what has driven their search — is creating an environment where deals happen and where the emotional resistance to paying a higher price is lower.

Perspective-taking produces better outcomes for both parties.

Research by Adam Galinsky and colleagues at Columbia Business School — published in Psychological Science — studied what happens when negotiators actively consider what the other party needs, rather than simply focusing on their own position. The finding was clear: negotiators who practised perspective-taking achieved more joint gain and, crucially, more individual gain for themselves.

There is an important nuance. Empathy — simply feeling for the other party — produced the opposite effect. Empathetic negotiators made excessive concessions. Perspective-takers created more value and captured more of it.

The distinction maps directly to what a skilled agent does with a buyer relationship. The goal is not to like the buyer or feel sorry for them. The goal is to understand, with precision, what they need — their timeline, their financial ceiling, their emotional motivations — and use that understanding to create a better outcome for the seller. That is perspective-taking, not empathy.

Questions are the mechanism.

Neil Rackham spent twelve years studying sales performance across 35,000 sales calls in twenty countries. His finding, which became the foundation of SPIN Selling, was that in large, high-value sales the behaviour pattern of successful salespeople was dramatically different from unsuccessful ones. The successful salespeople asked more questions. They asked specifically about the consequences of the buyer's problem. They led buyers to articulate their own needs explicitly. In successful calls, the buyer did most of the talking.

In real estate terms: the agent who asks "what brought you back for a second look?" and listens carefully is gathering information worth thousands of dollars. The agent who says "great property, isn't it?" has sold nothing and learned nothing.

The Australian Picture

There is no peer-reviewed Australian study specifically measuring agent negotiation skill and sale price premium — a notable absence that the global research does not share. The data infrastructure exists. The transaction records are available through PEXA, CoreLogic, and the portal databases. Nobody in the Australian industry has yet published the equivalent of the Levitt & Syverson analysis for the Australian market.

That absence is not accidental. An Australian agent performance league table — ranked by list-to-sale price ratio, vendor discount, and days-on-market relative to suburb median — would be uncomfortable reading for a large portion of the industry.

What the Australian consumer data does confirm is that the problem is real and experienced at scale.

In the InfoTrack State of Real Estate Report 2024, surveying 130,000 Australians who participated in property transactions:

- 1 in 3 buyers and sellers named their real estate agent as the most challenging stakeholder in the transaction — ahead of lenders, the other party, and their own conveyancer - 17% specifically identified negotiation skills as the primary area needing improvement - 25% of respondents did not achieve their expected sale price

In the View.com.au Path to Purchase Report 2025, Australian property buyers were asked what most influenced their decision to work with a specific agent. The answer — for 69% of respondents — was the agent's personality. Not their track record. Not their data. Their personality.

"Personality" is the consumer-language translation for rapport and trust. Three in four buyers are choosing the agent they engage with based primarily on how that agent made them feel. That is a significant amount of negotiating power sitting in the relationship — power that a skilled agent converts into price outcomes, and that an order-taker leaves on the table.

What This Means in Practice

The research converges on a model with three components:

1. Information asymmetry is the primary lever. Agents who invest in buyer relationships know things that passive agents don't. They know which buyers are emotionally attached, which are time-pressured, which have failed on three prior offers. This is the raw material of negotiation. An agent who doesn't have this information is not negotiating — they are presiding over a transaction.

2. The skill to use that information is rare but real. The Real Estate Economics study documented that agents who know their micro-market intimately produce consistently better price outcomes.⁴ That skill is persistent and measurable. It is not evenly distributed and it is not random.

3. Skilled agents matter most when the market isn't doing their job for them. In the boom conditions of 2021–2022, almost every property on the Gold Coast sold quickly and at or above value. When twelve buyers are competing for every listing, agent skill is hard to measure and easy to fake. As market conditions moderate — as they have — the differential between an agent who works their buyer database and one who waits for portal enquiries becomes visible in the final price.

The question for every seller is not: "Is my agent nice?" The question is: "What does my agent know about every buyer who has walked through this property, and what are they doing with that information?"

The Questions Worth Asking Before You Sign

Before listing with any agent, the following questions will tell you whether you are engaging a skilled negotiator or an order taker:

"Tell me about the last buyer you worked hard to get to a higher number." A skilled negotiator will have a specific story. An order taker will give you a vague answer about market conditions.

"How do you qualify buyers at open homes?" Look for a specific process — names, contact details, motivation questions, timeline questions. If the answer is "we collect enquiry cards," follow up with: "and then what?"

"How do you manage a situation where you have multiple interested buyers?" The answer should involve structured communication, carefully managed offer timing, and explicit strategy around how competing interest is used. Not: "We let them make their best offer."

"What do you track about each buyer between open homes and the final offer?" If the answer is sparse, the negotiation will be too.

"What is your typical list-to-sale price ratio across your last twenty sales?" This is the single most revealing metric. An agent who consistently achieves at or above their listed price is doing something systematically different from an agent who is routinely conditioning vendors down. Ask for the specific numbers, not the narrative.

The Bottom Line

When you hire a real estate agent, you are not hiring someone to put your property on a listing portal. The portal does that. You are hiring someone to have conversations with every buyer who looks at your home — and to use what they learn in those conversations to put more money in your pocket at settlement.

The research is unambiguous: the difference between an agent who does this well and one who does not is measurable, it is persistent, and it runs to tens of thousands of dollars on a typical Gold Coast property.

The $44,400 question isn't whether your agent is experienced. It's whether they're working for you the same way they'd work for themselves.

Sources

1. Levitt, S.D. & Syverson, C. (2008) Market Distortions When Agents Are Better Informed: The Value of Information in Real Estate Transactions, Review of Economics and Statistics, MIT Press. ideas.repec.org

2. Banerjee, R. & Paciorek, A. (2025) Commissions and Omissions: Trends in Real Estate Broker Compensation, Federal Reserve Board FEDS Notes. federalreserve.gov

3. Wang, Y. & Grochulski, B. (2024) Real Estate Commissions and Home Search Efficiency, Richmond Fed Economic Brief No. 24-08. richmondfed.org

4. Fang, L. et al. (2024) The impact of real estate agents' expertise on house prices and TOM, Real Estate Economics, Wiley. onlinelibrary.wiley.com

Last reviewed: 2 March 2026 — Fields Research Desk. This article is based on peer-reviewed academic research and is updated when material new findings are published.

Disclaimer: The information in this article is for general informational purposes only and does not constitute financial, investment, or valuation advice. Fields Real Estate (Licence No. 4832971) makes no warranty as to the accuracy or currency of data published. Readers should conduct their own due diligence and seek independent professional advice before making any property or investment decision. Read our full disclaimer →