Tricks Real Estate Agents Play
There are many tricks real estate agents play. Here are some examples: Lying, Underquoting, False Advertising, and Delay. To avoid these tactics, make sure you know exactly what you’re getting into. Beware of agents who lie to you or others. They may even delay an appointment by claiming another viewing has taken place, paperwork is taking longer, or they need to get some lunch. Be suspicious of any agents who obfuscate information to entice you to buy a property.
A common ploy that real estate agents use to sell their homes is to tell sellers that they have potential buyers. In reality, these tactics persuade sellers to hire their services. You should never hire a real estate agent solely on this basis. Once your home is listed, potential buyers will be able to see the details about it. Therefore, you must be wary of any real estate agent who claims to have buyers who are not interested in your home.
Real estate agents frequently lie about their fees. These fees are commonly referred to as commissions. However, many agents will claim that their commission is a fixed percentage when, in reality, it’s not. It is a simple ploy that is designed to fool unsuspecting buyers. However, in the case of commissions, a real estate agent can’t claim to have enough value to prove that they have earned a commission.
Underquoting is a common trick that real estate agents use to make their listings appear more expensive than they are. Agents are paid to get the most money for the vendors, and they will use any sales techniques to get that price. However, the law protects buyers, and government departments have been cracking down on this behavior. Random inspections of real estate agencies are being conducted, and the laws are getting tougher.
When real estate agents use underquoting techniques, they aim to create competition for a property. If two agents compete for the property, the agent is likely to get a higher price. Likewise, suppose a property has a reserve price. In that case, an agent can draw more people from lower-price brackets to the property. In short, underquoting increases the chances of a higher price because the agents can bring the property to the auction or a private sale and sell it for more than the listed price. In the end, the agent with the deepest pockets will win the battle of the fittest.
Underquoting does not work for both parties. It wastes money on solicitors and inspections and causes unnecessary anxiety for buyers. However, underquoting increases an agent’s database of potential clients. Consumer Affairs Victoria is policing the new rules and is considering the impact of underquoting on its membership. But, it’s best to stick with agents that have proven their worth in the real estate market.
A violation of the NAR Code of Ethics is considered false advertising by a real estate agent. Real estate advertisements must accurately describe a property’s features and price, and realtors are required to disclose the name of their brokerage in the advertising. A real estate agent may also be caught in a false advertisement if they exaggerate a property’s price, location, or other characteristics.
This type of false advertising by real estate agents can occur in several ways, including through online publicity or offline ads. While a real estate agent cannot intentionally mislead a potential client, the law defines false advertising as fabricating incorrect aspects of a property. That can include hiding specific details about the house, such as square footage, structure, and improvements. A home should also be presented realistically, with realistic features and descriptions of the amenities it offers.
False advertising by real estate agents is a severe violation of the NAR Code of Ethics. According to the NAR, “real estate advertisements must accurately reflect properties.” False advertising by real estate agents can be detrimental to the entire industry’s reputation. Exaggerated claims in advertisements can backfire, and clients may question the integrity of a salesperson. Therefore, ads that claim to be the number one agent in their area are misleading.
Even though bait-and-switch tactics are against the code of ethics in real estate, many agents do them to get a quick sale. This practice is called pocket listing. It involves agents getting a desirable property by pretending to be a seller in a hurry to sell. These properties are never listed on the MLS. The agent is in negotiations with the seller to secure exclusive representation.
The bait is usually an advertised apartment at a low price. The renter contacts the broker or landlord hoping to secure a great deal. However, when they arrive to view the apartment, the landlord or broker tells them that the listing has already been rented. In other words, they’ve “scraped” the listing information to make it appear cheaper. That is a common bait-and-switch tactic.
Bait-and-switch aims to entice a customer with a low-priced product and then upsell them to a higher-priced, similar item. Bait-and-switch is a tactic that is unethical and illegal in many jurisdictions. Those who use it should avoid it at all costs.
Getting you to commit to a sale
Real estate agents use a variety of tactics to close deals. Some are ingenious. A typical example is the “hot lead” scenario. A real estate agent gets a desirable property for a meager price, such as an old, deceased owner’s house in a desirable location. The real estate agent may then call their regular buyer clients, long-term buyers, to convince them to buy the property.
Getting you to sign a contract before you know the price
Despite being legal, real estate agents are still guilty of deception, including the common practice of collaborating to create a false bidding war. It is where realtors will contact the listing brokerage with an impending offer on your house, causing an inflated price to appear. In Ontario, however, the government aimed at this practice last year, passing a law to prevent unscrupulous agents from driving up the price of a home. The aim was to motivate the buyer to make an offer before knowing the price. Agents who engage in these practices should be given a written warning or a fine, and their license may be suspended or canceled, but this isn’t an easy feat to prove.
Another common trick used by real estate agents is to hide the price from their clients. Many agents have internal groups in which they can match buyers and sellers in off-market properties. These “pocket listings” are not open to the public and are claimed by agents who have agreements with the seller. It is essential to be aware of such practices so that you don’t fall prey to them.