Buying or selling, you need to keep your wits about you when you get involved in a real estate transaction.
By their very nature, housing transactions involve substantial amounts of money. In fact, last year the average sale price for homes was $383,500.
It’s only natural for real estate agents to want to get the most out of the deal. Most agents go about this within the bounds of the law and ethics, but others have a host of unscrupulous real estate agent tricks up their sleeves.
Here’s what to look out for to make sure you don’t suffer for their benefit.
1. Real Estate Agent Tricks to Bully You Into Buying Fast
It’s the real estate agent’s job to create excitement around a property and they’re very good at it. Some tactics they use to make you feel pressured into making an offer quickly include:
- Showing you the house when other prospective buyers are in attendance
- Introducing “sealed bids” which means you don’t know what other buyers have offered for the property
Don’t fall for this. Let your budget guide your decisions, not your competitive streak. Overspending on your dream home is never a good idea.
There is more than one perfect match for every home buyer. Rather, take your time an buy something that’s within your budget.
2. Pushing You to the Limits
The first priority of any estate agent is selling houses, not fulfilling your hopes and dreams. Be wary of disclosing your lower price limit if you’re selling or your maximum budget if you’re buying.
Sellers should get their property valued by at least three independent appraisers before they settle on a price. An agent will always try to convince you that your house is worth less to get a quicker sale.
If you’re buying, they’ll want to get as much money as they can out of you by showing your properties at the top end of your budget, or more.
3. Making Stuff Up
When you start looking to buy or sell a house, take steps to ensure you are dealing with a reputable agent. Take time to learn more about avoiding unscrupulous real estate agents before you start your search.
These tricksters will flat out lie to get you to commit to a sale – either way. They may invent phantom offers to make you offer more for a property, or reduce your price if you’re selling. If you’re buying, this often happens after you’ve submitted an offer, forcing you to increase it to secure a house that you now have your heart set on.
As soon as you agree to this made-up offer, the phantom buyer disappears and you’re left with the consequences of your decision. Stick to your guns when it comes to how much you are willing to pay for a house or the sale price of your house.
You can always find another agent.
4. Insisting You Use Their Mortgage Brokers
You have the right to shop around for a mortgage broker that suits you. It is illegal for an agent to insist that you use the broker of their choice.
By all means, take their suggestion and get a quote from the estate agent’s mortgage advisor, then get two more from other brokers of our choice.
Some estate agent’s brokers will share a client’s financial information with the estate agent. Armed with this information, the agent can try to get as much money as possible out of the client.
5. Posting Fake Listings
This trick is way more common than you think, especially with online advertising. Some agents post highly desirable properties on the internet for the sole purpose of getting you to call them.
No sooner do you ask to see the property than it’s “recently sold” or the posting was a computer error. Meanwhile, they’ve got you on the phone and naturally have a list of other suitable — and more expensive — properties for you to view.
Don’t let curiosity get the better of you, say thank you and hang up.
This is another common tactic whereby property listings have vague details. At face value, these may seem like the deal of the century – until you find out the rest of the information.
One example is listing a property as having a sea view. In reality, you can only see a tiny portion of the ocean from one window in the house, if you use binoculars.
Of course, the agent has a host of more expensive properties to show you that live up the original description.
7. Demanding Advance Fees
This ploy is usually aimed at house sellers. The usual procedure is for the agent to receive their commission as part of the sale of your property.
However, some of them may claim thousands of dollars in advance fees before they even list your house. These are often called advertising or promotional fees.
Rather, shop around for an agent that isn’t going to make you pay them to do their job. Most estate agencies advertise your property free-of-charge as part of their service and that’s how it should be.
8. Selective Disclosure
By law, estate agents have to disclose any and all defects associated with a property. However, they can get around some aspects by pleading ignorance.
In one example, a couple bought a house only to find out later that it had been the scene of multiple murders and apparently haunted. Naturally, once they were stuck with the home, they couldn’t find anyone else to buy it.
9. False Value for Their Home
Lying about the value of your home is one of the most underhanded tricks real estate agents play.
One way that they do is, by telling you they can get an unrealistically high price for your home. Once they’ve secured your business, they’ll think of some excuse to lower the price.
On the other end of the scale, they may tell you that your house is only worth “land value.”
They do this because they already have a buyer lined up who’s prepared to pay the minimum for your property and demolish it to build something new. Naturally, the agent involved will get the listing for this new, more expensive home.
10. Double Dealings
This trick is as old as the estate agent profession itself. Estate agents act on behalf of both buyers and sellers. In this way, they can get a double commission if they pull off a deal between two of their clients.
Because of this, some agents will neglect to show you any properties that aren’t listed with them personally. Keep your options open by consulting with several agents while looking for a property.
By the same token, agents with this agenda may restrict making information about your house for sale available to other agents. There is no restriction on how many agents you can list your home with, so don’t limit yourself in this way.
Buyer and Seller Beware
The bottom line is to stay informed about the realities of the property market in your area. Not all agents are bad apples, but the best way to avoid real estate agent tricks is to know what you’re talking about in your dealings with them.
Stay up to date by checking in to our blog regularly. We’ll keep you in the know about everything property-related.
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