Real estate agents have a reputation of being dishonest and saying anything it takes to make a sale. It is not uncommon for them to bend the truth to suit their own interests.
As a buyer, it’s important to be wary of dishonest agents who don’t have your best interests in mind. A vendor advocate can help in this situation as they are experienced professionals who are experts at buying and selling property.
They charge a fixed fee, and work in the best interests of their customer instead of working for a commission.
Regardless, you should be on the lookout for dodgy claims. Here are some of the most common lies told by real estate agents:
Top 10 Lies Told By Real Estate Agents.
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Underquoting a property
Real estate agents might list a property below the selling price in order to attract more buyers. They explain the actual price of the house by telling you ‘the market is hot’ or that ‘property prices are increasing.’
What to do about it
Don’t take an agent at their word — do your research. Use reputable and verified data sources such as RP data or APM to see how much comparable homes in the area have sold for. You can also ask other real estate agents, or employ a vendor advocate and ask their opinion of the sale. If you submit a formal offer and they respond with a counteroffer which is above the originally quoted price, you can file an official complaint with your local real estate authority.
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Over-quoting a property
An agent may tell an owner that their property is worth more than it actually is. Real estate agents work off commission so it is in their best interest to sell a house for the most amount possible. Ethical agents will set a fair price, whereas unethical ones will try and squeeze every last dollar from you by overvaluing a property.
What to do about it
If an agent cannot provide you with evidence, such as comparable homes and median house pricing, you should be sceptical. Any real estate agent worth their salt, will have done their research and will provide you with ample data. You can also ask them to guarantee a price range. If the property sells below this range, you should not have to pay a fee or any advertising costs. Asking for a guarantee will often frighten shady agents into giving you the real value of the property.
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“Commission is non-negotiable”
A real estate agent will tell you that everything in property is negotiable — except their commission of course. Their cut of the sale is just as negotiable as everything else.
What to do
Good real estate agents will set a fair price for the service they provide. If you see a rate that is particularly high, the agent is probably hoping that no one will ask any questions, and he’ll pocket a few extra thousand dollars. Remember, everything is negotiable. Even if they are not willing to budge, try asking for the advertising to be part of the fee. This is still negotiating, but it doesn’t sound like you’re just asking for a discount. Lastly, don’t be afraid to walk away. There are plenty of good real estate agents out there who charge fair prices.
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“We have other offers”
Sometimes a real estate agent will tell potential buyers that they have already had multiple offers on a property to create a sense of urgency among buyers. If you think there is competition, you’re less likely to wait and consider your options, and make a bigger offer than you originally intended. If you’re hesitating, thinking you don’t have time might push you to make an offer you’re unsure of.
What to do
It’s not uncommon for real estate agents to actually have multiple offers on a property, so it’s not always easy to see if they are being truthful. Your best course of action is to ask whether it’s worth submitting the offer you intend to, or you can even ask to see a deposit receipt. Real estate agents are not obliged to share information on other offers they have received so don’t be surprised if you get knocked back. Just be wary and don’t be pressured to pay more than you think the property is worth. There are other houses out there, and there’s no harm in waiting.
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“We have someone who wants to buy your home.”
A real estate agent might tell a homeowner that they have been approached by someone who is interested in their property. They say this to encourage people to put their house on the market, even if the home owner hasn’t considered doing so, so that they can sign them up as a customer.
What to do about it
It’s best just to disregard these statements. Most of the time, they don’t have any interest and they are just looking to generate it by listing the home on the market. If they actually had interest, they wouldn’t need to advertise the home, but they almost always do. Ask the agent for the offers they have received or when they can set up an open house. Very few people will seriously consider buying a house before looking at it first.
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“Now is a great time to buy”
Agents will say that the market is down, and that it’s the perfect time to buy property, but they don’t say this out of the goodness of their hearts — they are just trying to drum up business. Their job is to encourage people to buy, and make the most money doing so.
What to do about it
Again, don’t take their word for it. Do your research, ask for advice. Maybe it is a good time buy, but the way to find out is not from someone who will make money off you if you do buy. There are many indicators of a buyer’s market such as low interest rates, or low cost of square meterage, and they are easily accessible online. Don’t forget to ask the real estate agent tough questions such as ‘would you tell your kids to buy now?’ or ask about potential growth in the property in the next 12 months and see if they can back up their claims.
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“You’ll miss out if you don’t put an offer in now.”
This is a similar tactic to telling clients that they have multiple offers already. Real estate agents want to scare you into making hasty decisions because you’re afraid to lose a good property. The longer an agent spends with any individual client, the less time they have to find more business and make more money. It’s therefore in their best interest to move through clients quickly and encourage them to buy as soon as possible.
What to do about it
Don’t let this fear cloud your judgement. If you’re serious about the property, you can submit a written offer which is subject to certain conditions. Do your due diligence and make sure you have all the bits of information you need before making a commitment.
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Not disclosing information about a death related to the property.
Agents may choose not to mention that the property is a deceased estate. People tend to shy away from properties if they find out that someone has recently passed away there. Also, these houses are often urgent sales, and can hurt the agent’s ability to negotiate if they disclose that it needs to be sold quickly.
What to do about it
Ask. You’re within your rights to ask who the seller is and why they want to sell. If they are reluctant to answer or seem like they are leaving out details, you should be suspicious.
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“Always stage your property”
Staging involves using furniture inside the home to make a listing look more appealing. There is evidence that houses listed with furniture, increases the sale price and shortens the time the property spends on the market, but this is not always the case. Real estate agents push this strategy because they usually charge an extra fee for the service. They’ll push anything if it means they walk away with more of your money.
What to do about it
It’s not always clear whether someone is buying the property to renovate and redevelop, or to keep it as is. There are certain circumstances where staging will not affect the selling appeal on a particular property. Staging can certainly be a powerful selling tool, but if your agent pushes it on you instead of framing it as an option, he’s just trying to take your money.
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“Advertising will make or break this sale”
You can’t sell a property if no one knows it’s on the market. But this doesn’t mean more money spent on advertising equals more interest and a higher sale price. Real estate agents will often try to push large advertising budgets, in order to receive extra benefits for themselves.
What to do about it
Advertising is important so don’t be cheap, but ask for guarantees. Ask if the real estate agent will flip the bill for advertising if they sale doesn’t go through. Tell them that if the property doesn’t sell between their quoted price range, they should pay for the advertising costs. This will either force the agent to be more realistic with their quotes, or stop them from suggesting a higher advertising budget.
There are opportunities for real estate agents to sneak white lies into their conversations to win more business. Real estate is a competitive industry, and agents may think they need to bend the truth a little to get ahead.
If an agent convinces themselves of this, it is unlikely that they will be honest in the long term. Dodgy agents can receive fines and be sued for jail time, so they are usually caught and taken out of circulation.
Tips to find an agent who you can trust:
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Sound strategy
Look for agents who do things like take professional photos and advertise on their social media platforms without you having to ask. Good agents know that good photos and exposure are integral to selling a property so they will do it without making a big deal about it.
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Seek experience
Real estate agents who have seen multiple market cycles and came out the other side, are the types of agents you want to handle your business. This doesn’t mean there aren’t young agents out there who are good at their job, but generally speaking, more experience will get you better results.
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Personal investment
Certain real estate agents will have more experience in certain suburbs, or even own property there themselves. Maybe they grew up in the area or have family that live there. These sort of factors means the agent has a personal investment in that particular suburb and will appreciate its unique characteristics. They will be more likely to act in your best interest and get you the best deal. They will also have a more intimate knowledge of the area which could lead to better insights on its value and potential for growth.
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General customer service
How long did it take the real estate agent to fit you in to their schedule? If it takes them more than about a week or so, they are either unorganised or not interested in your business. Either way, not a good sign. They should treat you like a human being, not just another pay check. Are they patient and answer all your questions? Being busy is no excuse for poor customer service, so often someone who neglects this side of their business will not be on top of other parts of it.
So there you have it! There are crooks out there, like in every industry, but there are also many great real estate agents that will provide you with excellent service and get you the best result. If you’re still unsure about the process of selling a house, why not chat to a vendor advocate who will answer all the questions you have and guide you throughout the whole process.
