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Unethical Real Estate Agent Practices

As the real estate market continues to experience difficulties around the country, there are some real estate agents and brokers who have resorted to less than stellar practices in order to move more homes. Such practices can include trying to rush buyers and sellers into agreements to compromising on ethics. Whether you are interested in buying or selling a home, you should be aware of some of the worst tactics currently in use by some desperate realtors and brokers.

One of the worst current problems in the industry is the fact that there are no hard and fast rules in many areas when it comes to real estate. Ultimately, real estate brokers and agents only have an ethics code to guide them. This can naturally result in a variety of problems, particularly when there are conflicts of interest. It has become increasingly common for some brokers and agents to give less attention to homes with lower prices or those with lower commissions. While most real estate agents are certainly honest and ethical, in any industry there can be a bad apple and it is important to be on the lookout when you are looking for an agent to buy or sell.

If you are interested in selling your property, you should be aware that brokers may attempt to get you to list your home at a price that is higher than it can realistically bring in the current market. In other cases, brokers may try to get your listing by trying to convince you they have a buyer already on the hook and interested in your home. It is only after you have signed a listing agreement that the truth will come out and the interested buyer will mysteriously disappear.

As a seller, it is imperative that you remain realistic about what your home can bring and how long it will take to sell your home. To protect yourself against potential problems, it is a good idea to ask any agent you consider for proof regarding what they believe to be value of your home. One great way to do that is to ask for a comparable market analysis (CMA). This is a list of similar homes that have sold in your neighborhood within the past few homes. The CMA should contain a minimum of three homes. Also, do not feel pressured to sign a listing agreement even if a broker or agent assures you they have a buyer interested in your property. If they do indeed have a buyer, tell them you will instead sign what is known as a single-buyer listing. This type of contract will be limited to a single buyer, who must be named in the contract. If the buyer does purchase your property, you will be obligated to pay the broker a commission, but if the deal falls through the contract will expire and you will not be further obligated.

Buyers and sellers should also understand that agents earn their commissions from the sides of the sale they nab. In other words, if they have the listing agreement, they earn a commission from the sales side. If they have the buyer, they earn half of the commission from the buying side. Both sides are paid by the seller. If a broker has both the buying and the selling side, they are able to take all of the commission. Some agents may attempt to increase their chances at nabbing both sides by delaying placing a For Sale Sign on the property or adding it to the local MLS. This may be good for them, but can increase the amount of time it takes to sell the property and will also reduce the amount of competition for the property and thus, lower the offers on the home. To combat this tactic, sellers need to be diligent in ensuring brokers put up signs on their property and add their listings to the agency's website.

In today's market, short sales have become increasingly common. While there are certainly good deals out there to be had, there unfortunately are some agents who are trying to lure in buyers by advertising prices on short sales that are not realistic. After spending months trying to secure a great deal, buyers may discover the lender holding the property simply is not willing to sell it at the price advertised by the real estate agency. Buyers who may wonder how this is possible should understand that banks will not even begin to negotiate until an offer is actually received. The key to getting around this problem is to avoid the rush to make a purchase. Short sales can be attractive, but it is important to spend ample time doing your research and to only work with real estate brokers with a sound reputation.



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