Shop talk among real estate agents often includes tales about sketchy agents trying to slip curve balls by their clients or other agents. Yes, it’s hard to believe, but the real estate business has some unscrupulous characters.
Fortunately, some checks and balances help minimize dubious activity, but it will continue as long as the world keeps spinning. It’s important to note that many shady tactics may be unethical but they’re not illegal, which also helps them persist.
Since about 86% of home sellers and buyers get help from real estate agents, it’s wise to be street-smart about real estate chicanery. This article will explore some of agents’ most common shady real estate tactics and how to insulate yourself.
Trickster Tactics of Renegade Real Estate Agents
Good real estate agents should have some mastery of persuasion and salesmanship. However, some agents harness that energy for the wrong purposes.
We will discuss various shenanigans some real estate agents use to carve out the best deal for themselves at their client’s expense.
1. Fomenting False Urgency
Perhaps the most common way an agent will entice a homebuyer into making a fast and aggressive offer is to claim there are multiple offers on the property. That might be enough to get a buyer off the ropes and into the ring.
Similarly, if a competing offer suddenly appears on a house that’s been listed for a couple of months, it could be a tactic to prompt a faster or higher offer.
A tactic used by listing agents to incite a sense of urgency is stating that all “highest and best” offers must be made by a deadline, which conveys high demand for the property. Of course, this tactic can backfire if nobody makes an offer.
In any scenario, you should not feel pressured by your agent into making an offer until you’re ready. Decide on your limitations beforehand and stick to them.
It’s also important to note that these scenarios could be true, especially in a hot market. Most agents simply relay the facts as they know them – and sometimes urgency is the reality.
Just be cautious and find a good Realtor that you can trust!
2. Pumping Up Your Price
This common tactic is as old as the neanderthals buying their first caves. Fast forward a hundred thousand years, and devious real estate agents are still promising inflated home sale prices to get listings.
We all love to hear good news, but not delusions. You would love to hear that your home is worth more than you thought, but only the truth will set you free – from your house.
A good Realtor® will provide a home seller with a comparative market analysis (CMA) to support the optimal sales price. The CMA will analyze recent comparable home sales (comps) to derive a price that will maximize your cash-out in a reasonable time frame.
The CMA should tether to reality. Carefully review the sales comps and any adjustments for home size, quality, and amenities. The comps should have sold recently (within a few months) and be close to your property. Feel free to ask questions about it.
It could be a red flag if your home’s CMA value is much higher than online automated valuation models (AVM). They’re just ballpark estimates, but CMA values that are way out of line could beg some questions.
This can be particularly problematic for a seller relying on a home sale to fund another home purchase, as they may get less money than expected.
To avoid being misled about the asking price, it’s essential to research your property’s value and be upfront with your agent about any potential issues that could impact the sale price.
On Property Wonk, you can get 3 home value estimates and discuss how they differ from your CMA.
3. I Have Buyers Just For You
To get your home listing, some real estate agents will claim to have buyers chomping at the bit to buy a home just like yours. Wow, you could get a quick sale at full price!
It might be true but probably isn’t. Even if the claim is true, it’s unlikely that one of those eager beavers will make an offer on your home.
Most serious buyers are using agents to see all relevant homes on the market, so odds are very low that a specific agent can hook up a specific buyer with a specific seller (without mass exposure).
Moreover, there’s no substitute for maximum market exposure via the local multiple listing service (MLS). Your listing will be pushed out to all potential buyers, including those buyers mentioned by the agent. They will still have a chance to buy your home – at market value.
Lastly, you can call the agent’s bluff. Just say that you’re not listing the property yet, but would be happy to show your home to any special buyers and make a deal without a formal listing agreement. A sincere agent would welcome the opportunity to make a deal without fully marketing your home.
Note that in the unlikely event your listing agent’s buyer makes an offer, a conflict of interest arises from “dual agency,” which we’ll cover later in this article.
4. Home Inspection Hoodwink
Home inspections are an indispensable part of selling a home selling. You don’t know exactly what you’re buying until a professional home inspector tests the mechanicals and shines a light in dark places.
It’s an agent’s cardinal rule to insist that a homebuyer get a home inspection. In rare instances, a shady agent will either downplay the results of an inspection or discourage one altogether.
Unless you’re an experienced investor, the cost of an inspection is worth every penny. Even if you’ve agreed to purchase the property “as-is,” you should still know what repairs are in store.
It’s a no-brainer. Always get a home inspection!
5. Dual Agency Danger
Dual agency occurs when a real estate agent simultaneously represents the seller and buyer of the same home. The term is an oxymoron since it’s nearly impossible to represent both sides of a transaction with equal zeal.
Dual agency is illegal in some states because there’s an inherent conflict of interest. The seller wants the highest possible price, while the buyer wants the lowest possible price. It’s a precarious balancing act to properly represent those opposing forces. This applies to repairs as well as price.
Dual agency usually arises when a buyer does not hire a dedicated buyer’s agent. Instead, the buyer goes directly to the listing agent to see the home and make an offer.
A top Realtor will stay neutral and not divulge anything about what the other party is willing to accept. A shady agent may not think twice about showing the buyer’s or seller’s hand to get the deal done.
Some buyers believe they can get a better deal by going directly to the listing agent, but that’s rarely the case. A possible exception is using a listing agent in a hot market to get the inside track in a bidding war. But that’s simply signing up to pay the highest amount possible.
Some buyers and sellers are fine with dual agency, but it must be disclosed in California. You should at least know that your interests may be compromised in a dual agency scenario.
6. Promising The Moon But Delivering a Spoon
Wily real estate agents are notorious for over-promising and under-delivering.
Be wary of the agent who claims to be the best at everything.
Salesmanship is good since they should be good at helping you sell or buy a home. However, hiring a smooth-talking narcissist may wind up in frustration.
We’ve already discussed agents who claim they can sell a home for more than it’s worth. Thanks, but no thanks. Below are a few more possible exaggerations.
Marketing. For listings, a wonky agent may promise top-notch marketing, professional photos, videos, brochures, a social media blitz, billboards, and light shows – the works! However, the result might actually be a basic MLS profile with a few blurry photos.
Communication. Unless they have different day jobs, all agents are capable of returning a phone call or text within a couple of hours. Avoid an agent who takes 24 hours to return calls or fails to update you about important steps along the transaction trail.
Knowledge. It’s difficult for a top real estate agent to know every nuance about your neighborhood; but that agent should have a firm grasp on the area, your home value, and the overall market. They should also have essential contacts like contractors, other agents, good lenders, and good title officers.
Slippery agents will present themselves as having valuable and extensive knowledge, but it will be fairly obvious when they don’t.
7. Track Record Trickery
Many capable real estate agents don’t have much experience, and it’s okay to say that upfront.
In the beginning, agents must sell themselves by conveying knowledge about the real estate market and how hard they will work to help buyers or sellers achieve their goals. “What I lack in experience, I’ll make up for with hard work.”
Most agents also have support from their brokers and transaction coordinators.
But pesky human nature creeps in, and some real estate agents will exaggerate their experience to win your business. This typically involves overstating the number of properties they’ve sold in a price range or geographical area.
Many people trust and work with agents without a long track record, so agents simply need to be honest. That will usually translate into a good experience for all parties.
Note that there are many real estate agents with a ton of experience – at being lousy. There are good and bad agents of all vintages.
8. The Old Switcheroo
Another timeless sleight of hand has peeved home buyers for ages.
An agent will upload a phantom listing to a property search website. Attractive photos and a compelling price draw a buyer’s attention but the location is vague.
When the buyer calls to ask about the listing, the agent says “that property is no longer available but you’re in luck! There are similar listings I can show you.”
Needless to say, it’s unethical and annoying.
9. Fake Fees Flim Flam
Except for commissions paid through escrow, there should rarely be additional fees paid to real estate agents.
An exception would be to reimburse an agent for an expense. When a seller or buyer is unavailable, agents sometimes pay for inspections or repairs to be reimbursed later.
Listing agents pay for all marketing expenses, including various advertising media, signage, websites, photos, videos, brochures, etc. These are necessary costs of doing business as a Realtor. Rarely are they passed on to the seller.
Buyers’ agents almost always receive their commissions from sellers, although there are circumstances where a buyer will pay the commission. For example, a for-sale-by-owner seller may refuse to pay any commissions but the buyer may want to purchase the house through a Realtor. In that case, the buyer can agree to pay the Realtor’s commission.
Always feel free to ask questions about any fees that seem suspect. You can always contact an agent’s managing broker, title officers, and lenders to answer these questions.
10. Selective Showings Skullduggery
Some shady agents will focus on showing homes with the highest commission or homes at the top end of a buyer’s price range.
A real estate agent receives a commission when a house sells. Most commissions are 5 to 6 percent of the selling price, which are split between the listing agency (or broker) and the selling agency (or broker).
Since commissions can be negotiated, some listings pay a higher percentage to the buyer’s agent. One listing may pay 3% while another pays 2.5%, a $2,000 difference on a $400,000 house.
Although pushing buyers toward higher-paying deals still happen, it’s uncommon. Most buyers know what homes are on the market in their price range and will typically want to see all of them.
To steer a buyer only toward certain homes, a shady agent would have to lie outright about which homes are available – which is easy to verify.
Regardless, more knowledge is more power for you!
Tips to Avoid Shady Real Estate Tactics
So how can you avoid any shady subterfuge? Find a great Bakersfield Realtor®.
Here’s a quick summary of the above list to avoid shifty real estate agents.
Be wary of real estate agents who:
- Do not respond quickly or communicate well.
- Say they have buyers waiting for your home.
- Steer you away from homes that meet your criteria.
- Make promises or claims that seem exaggerated.
- Create a high sense of urgency around offers or counteroffers.
- Ask for odd fees or payments outside of escrow.
- Are vague about or embellish their experience.
- Provide a home value estimate that’s too good to be true.
- Downplay the need for a home inspection.
- Do not properly explain the downside of dual agency.
As mentioned, there may be legitimate reasons why any of the foregoing issues might happen, but they can prompt more questions.
Get a good referral from friends or family, or look online for a Bakersfield Realtor with a solid track record of success.
Fidelity Finish
Buying or selling a home can be arduous, so having to watch your back is the last thing you need. Protect yourself and your investment by avoiding the crafty, shady tactics that some real estate agents may use.
It’s important to remember that not all agents engage in monkey business. Most agents are hard-working and honest, and take great pride in helping people make great moves.
Use Property Wonk to find a reliable and trustworthy Bakersfield Realtor.
Contact us today to learn more!
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