How Realtors Cheat: Shady Real Estate Agents
92I've had many complaints from realtors about this article! They claim that all realtors are Honest Johns and have their customers' best interests at heart.
Let me make this clear: this is not an attack on the real estate industry.
There ARE plenty of good, honest real estate agents. But every industry has its share of shonky practitioners - unfortunately, that's just human nature. Take any large group of people, and you'll find a percentage who are prepared to twist the rules to their own advantage. And as we all know, the most fresh-faced, charming people can also be the most crooked, so we can't assume the nice guys are really the nice guys!
For most people, their home is the single biggest investment they'll ever make in their lives - so it's worth being aware of the tricks the unprincipled can get up to.
Why Shady Realtors Want to Sell Cheap
At the root of the problem is one huge misconception: that you and the realtor have the same goal in mind, which is to sell your property for the maximum price possible. That's simply not true. You want to sell at the highest possible price. The realtor just wants to sell.
You may be wondering, why on earth would a realtor not want the best price? After all, his commission is based on the selling price, so the higher the price, the more his commission.
The answer is simple - speed. If he holds out for the highest price the market can bear, that means more advertisements and more inspections. True, he will get less commission if the price is lower - but he will also have spent much less time, and will be able to move on to the next house much faster.
He can sell six under-priced houses in the same time it takes him to sell three full-priced houses, and the result will be more commission for him!
Of course, legally the realtor has to agree a figure with you and stick to it - he can't sell the property if you don't agree with the price. But the shady realtor has ways he can work on you, the seller, to persuade you to accept a lower price in the end.
How a Shady Realtor Reduces Your Sell Price
When the realtor comes to see your house, he points out all the good features of your property, and names an impressive price.
Once you've signed up, the agent starts showing possible buyers through your home. After every inspection, he calls to tell you how it went. To your surprise, he tells you he's disappointed to be getting negative feedback (which, strangely, he either never mentioned - or dismissed as unimportant - on his first visit!).
The first week, he may say some buyers didn't like the decor and would have to repaint the whole house. The second week, he'll mention buyers who felt the kitchen would need replacing. The third week, it might be a worn carpet or a damaged piece of guttering. Alternatively, he might claim he's getting constant comments on one single, but major flaw - such as the lack of sunlight in the living room, or the deck that needs replacing.
He may also say buyers have said what they might pay, e.g. "I'm getting some interest in the low three hundreds" means people have said they might pay $300,000 to $350,000 for the house. Whatever the range is, it's always substantially under the figure he first quoted. If you express concern, he'll say, "well, you have to bear in mind, they didn't like...."(whatever the latest flaw was).
You may have guessed by now that the buyers probably said nothing of the sort - or if they did, it was a casual comment. He's making it up to create doubt in your mind, to undermine your confidence in that impressive price he originally quoted. Week by week, he drip-feeds you negative feedback on the property, aiming to lower your expectations. Meanwhile, he's also working on the buyers...
"Hooking" the Buyer
It's illegal to quote a price the seller hasn't agreed to - but if the agent is having a private conversation with a potential buyer, and there are no witnesses, it's his word against theirs - so you can't prove anything, and will probably never know anyway.
If your property is for sale at a fixed price, during the inspections the realtor will be telling buyers you're "very negotiable" (whether you are or not). If your property is up for auction, the agent will be privately naming a price range that's well below what you're hoping to get.
I've caught more than one agent doing this, because I love viewing property - so when an acquaintance puts a house up for sale, I just have to go and look. Once it was an apartment selling for $380,000. I got talking to the agent and he told me, "If you're interested, I'm sure they'd take an offer of $340,000".
Next time I met my friend, I asked them how it was going. "Not good," she said glumly. "The agent is telling me they're only getting interest in the low $300's. He originally told us we'd easily get over $375,000, so we're really disappointed."
Of course he's only getting interest in the low $300's, if that's what he's telling buyers it's worth!
If you catch your agent out doing this, he'll tell you, "we quote a low price to hook the buyers' interest, then we can negotiate them up from there". I don't know why anyone ever believes this!
Clinching the Deal
Eventually, you will get an offer for the house - or auction day will arrive, and someone will bid.
Thanks to the agent, it's quite likely the offer or bid will be lower than you expect. When he presents it to you, you're quite likely to say so - to which the agent will reply, "oh yes, but do bear in mind that buyers have all been put off by the lack of sunlight (or whatever the problem was)". He'll tell you how you can never be sure what a property is worth upfront, but now it's been "tested in the marketplace".
This is all utter tosh. The property hasn't been "tested in the marketplace" at its true value, because the agent has been telling everyone it's worth less than it really is!
I experienced exactly these techniques when I sold my home following my divorce. Years later, I read an expose of real estate training and dirty tricks written by Neil Jenman, who has founded a group of real estate agents committed to ethical selling practices.
I've had several comments from realtors saying "I'm sorry you had a bad experience" and assuring me how wonderful most real estate agents are. So I should clarify that this article isn't based on one bad experience. Since reading Jenman's books, I've bought and sold several properties and I have come across those same techniques again and again. Luckily because of my awareness, I've been able to turn them to my advantage, especially when buying. Others are not so lucky.
I'm not denying there are good real estate agents out there. But if you embark on selling your home imagining that all agents are angels - you're an idiot!
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All text copyright Marisa Wright. Photos from Flickr.com - "Sold" sign by Aaron Webb, House Keys courtesy of MykReeve.
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Hi Marisa. I worked in real estate some years back and there certainly are agents like this. I tried not to associate with them if I could help it. Good article. Many people do not realize how subtle these tactics can be.
Good article Marisa, thank you.
It's very informative and if I'm ever in a position to purchase a home, I'll definitely remember the tactics you've shared here.
I wrote about this in my book about property. The fact is that badly trained agents will list a house at any price. A sole mandate to sell is the first prize. Then starts the war of attrition to get the price down to a manageable level.
The only way to ensure that the pricing is correct is doing a comparative market analysis.
PS I am an ex Estate Agent or Realtor. I know all the tricks that are used. My advice is sell privately its easier than you would believe
Guy
Wow! Great article and so true. Real estate can be a nasty business esp. if the agent is a predator. All they're thinking about is the money. Sad but true.
I have to take exception to your comments about real estate agents. My husband and I are full time Realtors and treat our customers/clients the way we would like to be treated. We are careful to recommend the list price, that after much research as to what the market has indicated, will be as close to the selling price as possible. We have found that people appreciate our honesty and integrity. We have a large data base and have no problem listing and selling property of all price points. Though this is our livelihood it is also our passion!
Pleased to hear it, cashgiftmom. I'm sure people do appreciate your honesty and integrity. I just wish more real estate agents would realise it's possible to be genuine and fair, and still be a success, as you obviously are.
Thank you fir the article, Marisa. It is very useful.
I wish there were more honest real estate agents, then such articles would not exist.
I am preparing for the most important acquisition in my life - a house, so I am surfing the Internet and learning all the difficulties and trick about that. Today I also found one more good article of another Aussie here:
This may be true for Australia, but it is certainly not true for the US. However, just like in all career fields, I do admit there are good and bad agents everywhere. In the US, though there are real estate auctions, the majority are sold through open market. Realtors have a code of Ethics that most do follow. The bad ones ultimately get what is coming to them, I think. It is important to ask questions of your agent, and if you have a bad feeling, find another. Also, get one through a recommendation from a friend who had a successful sale with another agent.
It is very easy to generalize and say most are crooks, but it is not true. Most agents I know are hard working and honest. They really care about their clients needs and go the extra for them.
Hi Marisa,
I'm really sorry to hear that you've had a poor experience with a real estate agent. Buying or selling a home can be an emotional time, and it's important to make sure that if you hire an agent to represent you, you should interview them and ask them some important questions first.
It's true that there are some "shady" agents out there who are only interested in their bottom line, and that is unfortunate, because it gives the rest of us a bad name.
My husband and I are both full time real estate agents in the US, and we do conform to a code of ethics as well as state and national regulations. But, aside from "conforming" to ethics and rules, we choose to be honest, forthcoming, and fair in all of our transactions because that is how we would want to be treated. Additionally, we consider ourselves consumer advocates - buying or selling a home is a big financial decision, and if a client doesn't know the process, it's our moral duty to guide them along the way. Finally, we are offering a ministry through our church to help parishioners and members of the community who may be facing hard times in this economy - for free. So, it's not always about the bottom line.
I think most agents just genuinely want to help their clients, and if you knew half of the "behind the scenes" work that went into a transaction, you'd understand that a good agent really does earn their commmission in full.
I hope you have more positive experiences in the future, and remember, not all agents are the same. Just like each dancer has their own rhythm and style...
Andrea, I know not all agents are the same, and I'm pleased to hear you approach your profession in an ethical manner. However, I do think you're being a little naive when you say people can choose an agent by simply interviewing them. Remember the best con artists in the world are incredibly charming people, that's how they get away with it! I can bet the most crooked agents are the ones who will be most convincing when they earnestly assure you of their honesty.
Thanks to your comment, I've also revised the article to point out that I'm an experienced property investor so I'm not basing this article on "one bad experience".
Marisa,
I do agree that there are some "shady" agents out there who also happen to be very good con artists. I think that's true in almost every service and/or sales industry, unfortunately. There are even con artists in industries that have nothing to do with sales, too!
I do believe one should definitely interview an agent, but I further recommend looking at an agent's track record, personal reputation, and company reputation.
In the end, if someone is still really not sure, I recommend referrals. If someone in your family or circle of friends had a positive experience with an agent, your safest bet is to work with someone they recommend.
I wish you the best of luck with all your real estate endeavors!
I am a Realtor and would have to say that there are a few that do not play by the rules. Though I would have to say the percentage is not high. At least here in the States have no idea what it is like in Australia.
To put a house on the market, higher than the market will bear is not good for the agent or the sellers. So why then would an agent do that? Many times it is the owners that think their house is worth more than market value.
Realtors that are unethical are just a few. Unfortunately a few bad apples spoil the whole bunch. With this in mind I have found agents that treat their clients unethically do not last long in the business. Word spreads fast. Andrea is right we have state and national regulations that most agents do follow or risk loosing their license.
Mkott, Australia has regulations too. Unfortunately the kind of tricks I describe above are hard to prove. It's very common for agents to use the excuse that "the buyer had an unrealistic view of the market". That doesn't excuse the agent lying to the buyer, IMO - if the agent thinks the buyer wants too much, he should say so upfront and not give the buyer false hope.
WOW! I am a bit shocked to see so many people agreeing with this overly broad generalization and stereo-typical comment. Just how many bad experiences did you have in this industry, Marisa. What type of industry survey did YOU conduct to arrive at this assumption. To discredit an entire industry due to your personal bad experience, is a bit reckless. It is a shame that consumers, that would normally be trusting, but cautious, would read your article and take it as fact.
I do not doubt that you had a bad experience and have the right to be angry and judgmental, but to make people, in this or any country believe that your bad experience is a representation of our entire industry is extremely misleading.
You are obviously not aware of our strict regulatory bodies we have governing our every move. Such as the state wide real estate commissions‘, Department Of Business and Professional Regulation, as well as the The National Association of Realtors. Chances are, if these so called "con-artists" that you have dealt with in the past, did the things you say they've done, I'm sure they have already had their licenses revoked and are no longer in the business.
I have worked in this industry over 20 years and currently own and instruct at a real estate school. I can assure you that what you described here, are not the type of agents we are bringing into our industry.
I would like to commend Connie Smith, Andrea M Martin, and others who have also expressed their feelings on this matter. Thank you.
Nick, I am amused by your response. If you read my article properly, you would see I am not angry at all. In fact,as a property investor, I've gained considerably by taking advantage of agents' sharp practices to get a good price when I'm buying.
Also if you read my article carefully, I do not say every agent is a shark. I say that there are enough sharks out there that you must be alert to the possibility that the one you engage is in that category.
I'd like to point out one funny thing here: there are quite a few comments on this page, most of the common folk is just thankful for the information, and the ones who are agents themselves have some kind of protest in their comments. It does not look like just a coincidence to me. Actually, it tells me that Marisa is telling the pure bitter truth. I want to say THANK YOU Marisa!
Marisa,
I am an American and have come to your verbal rescue(not that you need rescuing). But I think it only prudent to set the record straight. I have been in the real estate business on the title insurance side of the real estate business as well as an occasional investor for 23 years or my whole adult life. I have personally closed thousands of purchase transactions as well as examined title on upwards of 50,000 title policies. I am an expert in my field.
The negative comments from the realtors you have received are quite ridiculous and naive. There is MORE than a slight percentage of realtors in the U.S. who utilize the practices you have described in your article. The comment's from the realtors above decry regulations this and ethics that. A vast majority of realtors violate Federal U.S. law every time they get a listing by ordering title insurance. In the U.S., it is the BUYERS choice to choose the title and settlement agent for the transaction NOT the seller or the listing agent. Every time a realtor puts on the purchase agreement that the seller(what it really means is them, the listing agent) will pick the title company, they are violating federal law. Virtually no realtor in America knows or understands section 9 of the respa laws, many who do understand it, simply ignore it. And compared to a mortgage banker/broker or title agent realtors knowledge of the nitty gritty details of a purchase transaction and what it takes to make one happen is pretty close to zero. Filling out a purchase agreement, passing out oreo cookies at a home showing and driving around talking on a cell phone does not justify 5 to 7% commissions on a purchase transaction.
The long and the short of it is that realtors are becoming obsolete in the states. Folks are realizing that they can spend a few thousand dollars, or less on advertising and sell their own homes and keep that 5 to 7% commission for themselves.Or in other words, keep several extra thousand dollars of their hard earned equity for themselves.
@patriot1776, thank you so much for a great comment. I appreciate your honest assessment of the US market, coming from someone who knows!
I think we've summed up a wonderful description of any sales position, and Realtors are no different. As an agent since 1993, one of the things I can do for my clients is keep them informed as to the type of deal a particular agent in our community is most likely to bring. There are more than a few who will take advantage of a trusting client in order to make fast cash. Our motto of "a tradition of integrity and common since" keeps us in check...even when rule books fail us. The 5-7% we earn on our deals (if we are lucky enough!) keep us in the business and help off set the costs of continuing education, association and board fees, supplies and forms...quite ridiculous really! But it also covers the cost of errors and omissions insurance which is in place for the protection of us as well as our clients. Unfortunaely, my personal experience has been there are plenty of con men out there who will work behind the curtain of their realtor. And as for the proper pricing of a home...if you're going to give it away at a steal, the sharks will be waiting...and you won't need a realtor to sell! :)
Realtors have a lot of liability riding on every word they say. The reason I like a realtor is because they carry Errors and Omissions insurance. If something is screwed up they are the liable ones. It is also very important to understand Dual Agency, Buyer's agency, and Seller's Agency before signing up with an agent. Dual Agency is similar to having the same attorney representing the plaintiff and the defendant in court.
You are right. I have been a real estate agent/realtor in the US for 20+ years and there are many in the business who think nothing about hurting their clients for their own profit.
The public needs to stay on their toes and if they get a feeling something is wrong they need to react to that feeling. They also need to shop around for an agent and don't expect the government or regulatory agency to be there to protect you. You will be on your own.
But then this should be standard practice anytime someone is getting ready to spend a lot of money. There are too many people in all professions looking for a way to get a hold of your money.
One can never be too cautious.
A friend of ours left the estate agency business because he didn't like having to constantly lie to people.
My son's girlfriend has also just quit her job as an estate agents due to the highly pressurised targets. In some agents, staff are under such pressure to sell - or get fired - that they stoop to any tactics to save their own jobs.
I just finished my RE agent class and this was NEVER part of the course - Quite the contrary. This goes against everything we just learned and while there are crooks everywhere I find the info in this article grounds for the seller to take action against his agent with the RE Commission!! I indeed do not intend to conduct my business in such a manner!
There are tons of good agents out there and bad ones. The key is to find the ones that really care. Its just like any business there are honest people then there are crooks. I know in real estate investing there are bad investors every where and they just wont be in business long.
Great Hub, Marisa, I could not agree more especially given my experience. I was unable to choose this Agent, due to circumstances outside my control.
I, in fact appointed a different Agent, one I had more faith in to sell my half. The offensive Agent blocked them all the way, to the point where they could not even get into the House.
I quickly found out he had his own Agenda.
I was told by a Buyer, that was refused entry to the House, that he had been trying to work out a deal, whereby, I think he was going to try and buy the thing, on selling to a Developer.
He wasn't up to that negotiation, so just messed everything up for all Parties.
He is a marked man, now I tell everyone that is buying or selling, not to go near the Firm. I know alot of people.
Not surprising he has done many of th things that you mentioned in your Hub.
thanks for the reading.
I was amused also to read Nick's comments re this Hub.
I studied the little paper that they do to sell Property, I majored in Franchising, because I knew that I could never, ever want to be judged by a Group that really is predominantly bent, well in my Town certainly.
Realtors, no matter how hard they con themselves into trying, to believe that they are not con-artists, are basically hungry salepeople. Lets face it, they make very few Sales per Month, there may be a few exceptions, most of the Agents here are in this Group.
Also,. we have Agents in Court for Real Estate misrepresentation, this is not uncommon.
You have only got to look at these people, Hell theylook desperate.
I like Marisa, am not basing my opinions on the one Agent, although he would take a lot of beating, in the unethical stakes.
I even had one istance where I sold a Property myself, because the Agent couldn't finalise (close) the Sale.
I was thanked for my help. But he still took full commission, insisted on it in fact.
No at least 80% I believe would at some stage, resort to something dodgy.
Don't like the comments, try an honest Days work.
Because like it or not Worldwide, you are all judged pretty much the same.
Good point mandybeau1. I had my property listed and my realtor didn't believe that I found a buyer. He was going out of town and would see me on the following Tuesday. Sad for him, I wrote up the agreement myself. Gave him what I thought was his share and moved on. This was a highly ethical, top dog realtor in my community. I had a great lender, he took time from his day because he wanted the sale and helped me with the agreement. I guess if you want something done, you gotta do it yourself so why pay a % if you don't have to.
there are bad people in every profession...doctors/lawyers/teachers/the person working at the drycleaners...people do unethical things in every profession...you are targeting realtors because of one bad experience, walk a day or 2 in the shoes of a realtor and you'll see, we give away a lot of FREE advice to people and are pushed over many times that we never get paid for, it's one of the only professions that people can get you to work for and in the end, walk away and never pay them if you want...
I just experienced the same thing now i am stuck paying these dirty sharks the commision for the auction that they did. Didnt sell it at auction wasnt stupid enough for themto sell it at the under valued price. you can not Trust any of Realestate agents such as Melbourne realestate they are sharks they are located on Craigiebourne Campbellfield and Glenroy to name a few they work under the same dirty tactic. and not to mention thier realestate ethics not knowing our simple language of english, If you want my oppinion dont bother using them to sell your property they will deliberatly push you to sell at the worst price so they can make a commission. And if you dont follow thier evil demeaning tactic they push you aside and say noone has made an offer and you never hear from them again they totally ignore you not returning call when you make them. leave you feeling penniless they will burn any one just to make a quick buck so they can walk around in thier 50Cents suits.
Ethics is a system of moral principles by which human actions are judged right or wrong, good or bad. The Roman statesman, Cicero, urged business people to revise their thinking and understand that true success does not come from trickery and deception but from moral goodness, both in thought and in action. Agents must stop thinking about who is right in the battle for real estate reform and start thinking about what is right. Ethics is the right way. SO I SAY TO ALL THE OWNERS THINKING OF SELLING! DO YOURSELF A FAVOUR...I Dare you not to go with the highest priced appraisal when you interview your agents that will represent youre biggest asset sale! - i believe VENDORS create the agent!!!So...vendors - take some of the resposibility and and stop being so greedy and maybe you might have a painless and stress free seling experience! Guess what though...you can't do it...cause youre greedy and you blame the poor agent that you have created!!!
The fact is that 90% of the business is done by 10% of the agents, and those 10% are very successful consultants and marketers and have very high standards and ethics. The type of agent you are speaking about does not last long in real estate or any business. The business is changing and the average real estate agent is held more accountable than ever.
This article is 100% true, and you'd be surprised how else people get taken advantage of. If you question it, go to Barnes and Noble and skim through the real estate books that teach Realtors how to get rich quick. It's all spelled out for the Realtor with the hope that consumers don't read these books. I run a business based out of Houston that audits real estate transactions to protect people from being taken advantage of. Check us out at www.realtyguard.org.
Interesting service you have there, Nick. Thanks for dropping by.
I do agree, and I was Realtor for three years. There are some shady characters out there. Seller, and buyer beware. But that shoe fits just as well on the homeowner and buyers' feet as well. I can't tell you how many times I wasted weeks, months even with buyers and sellers.
Thanks tmbridgeland, from the horse's mouth! But I do agree, customers can be a pain too...
I've been a real estate agent since 1979, and it's safe to say I've seen my fair share of both ethical and, unfortunately, unethical real estate practices.
Similar to kjsand01 (see comment above), I work to disassociate myself from those who engage in unethical practices.
I started to take this article personally, but the reality is that there isn't a problem with Realtors specifically, there is a problem with people in general. I think most Realtors who have been in the business for a while can tell plenty of stories about dishonest and manipulative buyers and sellers. And I mean PLENTY. Every profession has it's garbage--no exceptions. The author here chose to target real estate agents, granted herself a certain amount of authority and definitely gave the impression that the practices described were the rule rather than the exception. Are there sleezy agents? Yes. Are there more sleezy people, on average, in real estate that in other professions? No. I would also note that real estate laws and practices vary from country to country, and from state to state in the U.S. (the behaviors described in the article didn't even make sense where I sell real estate).
So the author doesn't particularly care for Realtors. I know that I also have unfavorable opinions about certain professions...
SG, did you read the first paragraph? I'm not saying every estate agent is a weasel. I'm saying there are rotten apples in the barrel, and since buying a home is a big investment, it pays to know what the tricks are.
Dear Marisa:
Thank you for your article! I hope it is not of me to read your article too late.
I sold a property by an agency who sold my property after only two open days by used the same trick as in you article last year. Now I am selling another property by a "very good" agency who is doing the same as exactly what you describe in your article. So I will keep your words in my head when dealing with them.
Thank you again!
David CINI from Sydney
Seriously doubt it. First of all, half the time Its a different agent showing the home a buyers agent that works for a different company then the same listing agent selling the home. Get real k. Or right your senate for new state laws. A selling agent works off commision they want your house to sell for as much as possible. The more your home sell for the bigger their paycheck. If it is the same agent buying and selling they have to notify both parties and be a nuetral negotiator after the parties agree to it. You dont have to agree btw. So how about lets be honest with our posts. Were talking serious penalty for some thing like you mentioned and an agent in my area wouldnt be an agent long, so illegal. No Broker would Let that go on and Its their job to make sure it don't. They are just as obligated.
JM, you say, "The more your home sell for the bigger their paycheck". That's true, but the more important figure is their hourly rate: if they sell a house cheaper, but in less time, they can move on to the next deal faster. They can make more money selling a lot of houses cheap, than selling a few houses at top dollar.
You're also right, there are penalties for agents doing this kind of thing, but the trouble is it's hard to prove. So agents get away with it.
Also bear in mind differences across countries and states. Where I come from, you don't need to engage an agent if you're buying a property.
Wow.
I have spent a good 20 minutes just reading comments. Some interesting insights. Unfortunately buyers and sellers have had unfortunate dealings in the past which cannot be changed.
It is important to state that if buyers and sellers just agreed on asking prices, then agents/realtors would not have a job nor their would be no realtor industry.
For buyers and sellers, it is important for each to identify their needs and requirements so that they don't waiver from their initial goals.
I am a Buyers Agent in Brisbane Australia, as contracts and practices become heavily regulated I believe it can only enhance transactions as transparency and disclosure evolves.
I realize this post is over three years old, but as a real estate agent in the United States for almost eight years, I'd like to address some of these issues.
All of my comments below come from my real estate practice in the United States, but I think they can apply in Australia and elsewhere too.
To your first statement about pricing. It is unethical (and a violation of real estate law) for an agent to misrepresent the pricing of a property. An owner should never take a price recommendation without seeing data that supports a suggested price range. And in my personal business I take pride in providing as accurate a market analysis as possible. In fact, I have lost listings due to a Seller's decision to go with an agent who presents a better (read: higher) listing price than I could reasonably suggest. Almost invariably these homes have sold at the recommended price I had given. If I have a Seller concerned that my market analysis is flawed, I always recommend they hire an appraiser for a current appraisal (for the purpose of selling). If the appraisal comes in higher or lower, I have no issue accepting a listing at the higher (or lower) price.
I can't really comment to the idea of auctions, as they are fairly uncommon in the United States. In most cases in the United States, auctions are often seen as buying opportunities where a lower price might be realized than by purchasing on the open market. They are more popular with buyers (in my experience).
Regarding the negative feedback, in my business I tell my Seller's upfront what issues I expect buyers will have. The worn carpet, outdated kitchen, or aged roof--whatever the issue--I suggest either taking care of the issues where possible or expect the offers to reflect them. The rule-of-thumb in the U.S. is a buyer will deduct 1.5 to 2x the cost of getting the repair done. Of course, a property can be priced to reflect these shortcomings, but buyers oftentimes forget that when they're making an offer. Again, any perceived (or real) flaws such as decor, tired kitchen, worn carpet, or lack of sunlight in the living room or rotten deck would have been discussed by me with the Seller already, so any actual feedback along these lines should not be a surprise.
I can't even comment on an agent giving feedback from a buyer that doesn't exist. We do give feedback, but only based on what a buyer or buyer's agent tells us.
Regarding "hooking" the buyer. Again, I'm not sure how agency law works in Australia, but in the U.S. telling a buyer (if I'm representing the Seller's interests) that a Seller is "very negotiable" would be a violation of agency law. Unless the Seller specifically instructs me (and I'd get it in writing) to disclose such a statement, I would be violating license law by doing so. As a personal practice, if I'm asked by a Buyer if a Seller is negotiable, I reply, "I don't know if the price is negotiable. I know nothing works like a full-priced offer. Let's write up your offer and I'll present it to the Seller."
I'm not going to pretend to know what happens in Australia's real estate market. I'm also not going to say that all real estate agents in the United States operate ethically or even within real estate law; however, the majority of agents here (and I'd bet in Australia, too) truly seem to operate ethically and legally. Sometimes improper activities by an agent are a result of inadequate training and not by malicious intent. As has been stated previously, there are bad apples in every industry. Of course, I think it is a responsibility of members (and indeed a part of the National Association of Realtor's Code of Ethics) to help rid the industry of unethical members by reporting unethical activities. And it is important that Buyers and Sellers report unethical behavior. If it is never reported, it will just continue. Bad agents can and should lose their license to sell real estate in the United States and in Australia.
I've included a link to the Realtor Code of Ethics for your information: http://www.realtor.org/mempolweb.nsf/pages/code
And, because I found this whole thing so interesting here's a link to the Real Estate Institute of Australia's Trade Practices page. I'd recommend any buyer or seller in Australia check the website out, as it has some great information: http://www.reia.com.au/real-estate-australia-trade
Best wishes and have a fantastic 2012!
James E Nickerson
Associate Broker
info@jamesnickerson.com
City Connections Realty
71 West 23rd Street, Suite 1001
New York, NY 10010
Thanks for your detailed response, James. I do say, right at the start of my article, that there are plenty of reputable agents out there. The trouble is, there is an underbelly of shonky operators and even if they're a minority, you have to be alert to their tricks.
It's interesting to hear that auctions aren't much used in the US. It's the same in the UK, where they're only used to get rid of low-value or problem properties - and most people expect a bargain. Unfortunately they are very popular with agents in Australia and unfortunately, leave the seller open to being badly exploited. For instance, it may be illegal to lie about the potential value of a property - but an auctioneer can always say, "well, I thought it was worth more, but that's all the buyers were willing to pay on the day", and he's off Scot free.
I went through a phase of buying investment properties and I've frequently heard an agent say the seller is "very negotiable". I even had one tell me the seller would accept $50,000 lower than the figure quoted in the ad.
As a realtor who mainly represents buyers(good website) it amazes me how often listing agents basically will give away the store about how their people are looking for an offer and the reasons why which either short changes their client or if they're lying about it just to get an offer in it can skewer a deal.
As a former lawyer I was somewhat taken aback.
Also it's the price that sells the home. People will generally see well matched listings and get the list from the MLS which has a good search feature. You can't bamboozle someone into buying a house. Listing agent's really can't do a ton to sell a house aside from list it on the MLS and act as a go between/not say anything stupid. If you're house is over 100k you should always ask for a discount, but make sure your listing broker will still pay the full 3% to the buyers agent.
David, thanks for your comment. As you say, why would agents "give away the store" by revealing people are desperate to sell. It's such a stupid tactic, yet sellers are persuaded to put things like "must sell!" in an ad, as if that is going to help them get a good price.
What's the name of your website?
Marisa it's http://www.memphishomes.pro . It's just a standard idx site which displays real estate listings. People want to look at listings and provide their contact information.
Most of my clients build the lists I end up showing with a few suggestions from sites like mine. One things listings agents may do is take their listing off the idx system. (it's opt out).
Also it's not so the listing agent will do more deals, most don't do alot, it's so that they will do A deal. A surprising number of listings expire and then the realtor gets 0 commission.
I gave up 1% on a deal that didn't appraise along with the listing agent to make the deal work, so it's not all peaches and stuff.
Very good article, i think most of ppl experienced the same. But my story was worst than average. As my work needs me to station in few places including Hong Kong and US, I brought a house in Hong Kong through a agent called lauchlan leishman this year, he did hooking me as this article saying, and finally he disapeared from April 2012. And after, I checked his history through different ways, i found he is being sued by Hong Kong Police. This taught me a lesson, CHECK the backgroud of your agents before u do an deal, good luck all.
****The above post by WILLIAMGATE IS A FRAUDULENT POST*****
There has been a spate of recent attacks against Mr Leishman on this and a myriad of other sites designed to destroy Mr Leishmans reputation in a personal vendetta.
The story is fabricated. The person is not who he says he is.
This matter is being invetigated and the person responsible will be held accountable.
- I Hate My Agent! : The Real Estate Bloggers
- Couple sues agent over real estate deal gone bad | Southeast Texas Record
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Realtor commisions represent a large cost of a real estate transaction. Understanding what a good agent does and how to select one can save you thousands of dollars. - Jenman
Betty Jo Petty 4 years ago
good article, Marisa,
interesting subject. Betty Jo