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.