Whether buying a home or selling one, you need to beware of real estate agents’ tricks that may catch you out.
Homebuyers need to remember the real estate agent is working for the people selling the home. The home seller or vendor wants the highest sales price, and that’s also what the real estate wants if their fee is commission-based, i.e., a percentage of the sales price.
Homeowners selling need to know real estate agent’s sales pitch tactics to get the listing agreement. Plus, there are other tricks homeowners need to avoid. In this property talk blog post, we look at some common tricks you can avoid when dealing with unscrupulous real estate agents. We believe 99.9% of real estate agents are trustworthy; just that 0.1% tarnishes agents’ reputations generally.
1. Real Estate Agent Tricks to Bully You Into Buying Fast
It’s the real estate agent’s or the auctioneer’s job to create excitement around a property; 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. Finding your dream home may take a little longer than you expect, so prepare to take the time to get the home that meets your requirements.
Property investors have a good saying that all homebuyers should remember. There is another deal just around the corner.
2. Pushing You to the Limits
Real estate agents need to sell homes to earn an income. The more houses they sell and the higher the prices, the more income they make.
Remember this information when you’re asked about your minimum price requirement if you sell your home and the maximum budget if you’re a homebuyer.
Sellers should get their property valued by at least three independent appraisers before they settle on a sales price.
Avoid relying on real estate agent’s advice on your home is worth and what they can sell it for in the current market. If it’s a quiet sales market, an agent keen to get paid may attempt to get you to list your home for less than its market value.
Similarly, if you’re in the market to buy a property, agents may only show properties at the top of your budget or more if they know your maximum price.
3. Making Stuff Up
When you start looking to buy or sell a house, ensure you are dealing with a reputable agent. Before you search, learn more about avoiding unscrupulous real estate agents.
Either way, these tricksters will lie to get you to commit to a sale. 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 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 regarding how much you are willing to pay for a house or the sale price of your home.
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 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 brokers will share a client’s financial information with the estate agent. Armed with this information, the agent can get the client as much money as possible.
5. Posting Fake Listings
This trick is way more common than you think, especially with online advertising. Some agents post highly desirable online properties to get you to call them.
You ask to see the property no sooner than “recently sold,” or the posting was a computer error. Meanwhile, they’ve got you on the phone and have a list of other suitable and 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. You can only see a tiny portion of the ocean from one window in the house using binoculars.
Of course, the agent has many more expensive properties that live up to 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 for selling your property.
However, some may claim thousands of dollars in advance fees before listing your house. These are often called advertising or promotional fees.
Instead, 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 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 was 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 they do this is by telling you they can get an unrealistically high price for your home. Once they’ve secured your business, they’ll find an excuse to lower the cost.
On the other end of the scale, they may tell you 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. This way, they can get a double commission if they pull off a deal between two clients.
Because of this, some agents will neglect to show you any properties that aren’t listed with them. Keep your options open by consulting with several agents while looking for a property.
Agents with this plan 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 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 discussing 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.