Last updated on August 3rd, 2024 at 08:10 am
When it comes to buying or selling a property, it’s important to be aware of the manipulative tactics that some real estate agents may employ.
Understanding these tactics can help you navigate the process with confidence and make informed decisions.
We will shed light on some common tactics used by real estate agents and provide insights on how to protect your best interests.
The “Lower-Than-Realistic” Guide Price
Some agents may intentionally set a guide price that is much lower than what they believe the property could realistically sell for.
This tactic is used to attract potential buyers who may be willing to offer over asking price in a bidding war.
As a buyer, it’s crucial to do your own research and assess the property’s actual market value to understand what you are getting yourself into.
Remember, the guide price is just an initial benchmark, not the final selling price.
The “First Offer” Pressure
One tactic employed by real estate agents is to create a sense of urgency by pressuring sellers to accept the first offer that comes their way.
The goal is to make the seller believe that this is the best offer they will receive, thereby encouraging them to accept it quickly.
As a seller, it’s important to remember that it is your right to carefully weigh different offers and consider all options.
Take your time, consult with professionals, and don’t let the fear of missing out influence your decision.
The “Bidding War” Strategy
To create a competitive environment and possibly drive up the price, real estate agents may use the tactic of fostering a bidding war between rival buyers.
This can create a sense of urgency and make potential buyers feel compelled to offer a higher price.
It’s essential as a buyer to set a budget and know your financial limits.
Don’t get caught up in the heat of the competition and end up spending more than you can comfortably afford.
Dual Agency
Dual agency occurs when a real estate agent represents both the buyer and the seller in a transaction.
While this is legal in many places, it can create conflicts of interest as the agent’s fiduciary duty is split between two parties.
As a buyer or seller, it’s crucial to understand the potential drawbacks of dual agency and consider seeking independent representation to ensure your best interests are fully protected.
We’ll reveal some common real estate agent tricks that you should be aware of before signing any contracts.
Misleading pricing tactics
Real estate agents employ various tactics when it comes to pricing properties, and not all of them are transparent or in the best interest of the buyer or seller
Higher-than-realistic guide price
Some agents may suggest a higher price for a property than what the market actually supports.
This tactic is often used to attract potential buyers who believe they are getting a great deal, only to find out later that the property is overpriced.
Lowering the price after generating interest
In an attempt to create a bidding war or generate more interest in a property, some agents may intentionally list the property at a price lower than its market value.
Once potential buyers are hooked, the agent may then raise the price or entertain offers above the original list price.
The flip side: Higher offer from a rival buyer
To pressure potential buyers into submitting higher offers, an agent may falsely claim that there is another buyer interested in the property who is willing to pay more.
Some agents may try to manipulate you by making misleading statements about the number of interested buyers or the level of competition for a property.
They might claim that multiple offers have already been made or hint that another interested buyer is ready to make an offer.
Concealing property flaws
One common tactic is concealing property flaws.
By downplaying or hiding issues with a property, an agent may try to sway buyers into thinking they are getting a great deal.
Identifying property flaws is essential to make an informed decision and ensure you don’t encounter unexpected costs or challenges down the line.
Conduct thorough inspections: When visiting a property, pay close attention to any signs of disrepair or damage.
Look for cracks in the walls or foundation, water stains, mold, or uneven floors.
Don’t hesitate to ask questions about the property’s condition and request to see maintenance records if available.
Hire a professional inspector: It is highly recommended to hire a qualified home inspector to evaluate the property thoroughly.
These professionals have expertise in identifying potential issues that might not be immediately visible to the untrained eye.
They can assess the structure, electrical systems, plumbing, and other vital aspects of the property.
Request disclosures: In many jurisdictions, sellers are legally required to disclose any known issues or defects with the property.
Request a copy of these disclosures from the listing agent to ensure you have all the information necessary to make an informed decision.
Do your own research: Don’t solely rely on the information provided by the selling agent.
Conduct your own research on the property, the neighborhood, and any relevant local regulations.
This can help you uncover any hidden issues that can help you from making mistakes or consider factors that may affect your decision.
Pressure tactics
These tactics are used to create a sense of urgency or manipulate emotions, ultimately pushing individuals into making quick decisions that may not be in their best interest.
Limited time offers: Agents may try to create a sense of urgency by presenting limited time offers, such as telling potential buyers that the property they are interested in has multiple offers already or that the price will increase after a certain period.
This tactic aims to push buyers into making quicker decisions to avoid missing out on what seems like a great opportunity.
Fear of missing out (FOMO): Agents may utilize FOMO to pressure buyers into making higher offers or accepting less favorable terms.
They may mention that other buyers are interested in the same property or highlight the desirability of the location.
False sense of competition: Building on the FOMO tactic, agents may create a false sense of competition by fabricating rival offers or claiming that there is strong interest from other potential buyers.
This can lead buyers to engage in bidding wars and drive up the price beyond what they initially intended to pay.
High-pressure sales tactics: Some agents may adopt aggressive and high-pressure tactics to push their clients towards accepting an offer or closing a deal.
This can involve persistent phone calls, multiple office visits, or emphasizing the negative consequences of not taking immediate action.
Misrepresenting market conditions
In the real estate industry, it’s not uncommon for some agents to misrepresent market conditions in order to manipulate buyers and sellers.
This tactic can have significant consequences and it’s important for consumers to be aware of these deceptive practices.
Concealing market trends:
Agents may purposely withhold or manipulate information about market trends to suit their own agenda.
They might downplay a downward trend or exaggerate an upward trend to influence buyers or sellers.
Withholding information about additional costs:
Some agents may conveniently fail to disclose certain additional costs associated with a property, such as maintenance fees, property taxes, or potential renovations.
This can lead to surprises and financial strain for the buyer down the line.
- Lack of Disclosure: One of the most concerning signs is when a real estate agent avoids providing information about known property flaws. They may conveniently omit details about structural issues, water damage, or pest infestations.
- Evading Questions: If you notice that the agent is dodging or deflecting your questions regarding potential flaws, it could be a warning sign. A reputable agent will address your concerns honestly and provide clear answers. Avoid agents who seem evasive or vague in their responses.
- Limited Access to Inspections: Another red flag is when the real estate agent restricts access to property inspections or discourages buyers from conducting thorough inspections. Inspections are crucial for uncovering any hidden flaws or issues with the property.
- Rushed Showings: Pay attention to the agent’s behavior during property showings. If they seem to be rushing through the tour or discouraging you from thoroughly inspecting each area, it could be a sign that they don’t want you to notice potential flaws.
Misleading advertising
Misleading advertising is a common tactic employed by some real estate agents to attract potential buyers and generate interest in a property.
While not all agents engage in this practice, it is important for buyers to be aware of the possibility and take necessary precautions.
Exaggerated Property Descriptions: Some agents may use misleading language to create a false perception of a property.
For example, they may describe a small yard as “spacious” or a basic kitchen as “gourmet.”
It is crucial for buyers to conduct their own research and visit the property in person to verify whether the descriptions match the reality.
Enhanced Listing Photos: Photos play a significant role in enticing buyers, and agents may use techniques to enhance the appearance of a property in pictures.
This can include using wide-angle lenses to make rooms appear larger or strategically framing images to exclude undesirable features.
Buyers should view the property in person to get an accurate sense of its size and condition.
Lack of transparency
Lack of transparency is a common tactic used by some real estate agents to manipulate the process and gain an advantage.
By withholding crucial information or providing misleading details, they can steer the transaction in their favor, often at the expense of the buyer or seller.
Incomplete Property Information:
Some agents may provide incomplete or selective information about a property to make it seem more appealing.
They might highlight the positive aspects while downplaying any potential issues, such as structural problems or neighborhood concerns.
Hidden Fees and Costs:
Real estate transactions involve various fees and costs, such as closing costs, inspections, and contingencies.
A manipulative agent may not fully disclose these additional expenses, leaving the buyer or seller surprised and potentially facing financial strain.
It’s important to request a breakdown of all costs involved and review them carefully to avoid any unexpected surprises.
Dual Agency:
Dual agency is a situation where an agent represents both the buyer and the seller in a transaction.
While it may seem convenient to work with one agent, it often leads to conflicts of interest.
A dual agent may prioritize their commission over the best interest of either party, potentially compromising the negotiation process.
It’s advisable for buyers and sellers to have their own dedicated representation to ensure their interests are fully protected.
Concealing Competing Offers:
In competitive markets, agents may withhold information about competing offers from potential buyers, creating a sense of urgency and pressuring them into making a higher offer.
This can result in buyers paying more than they intended, often above market value.
Buyers should always request transparent communication from their agent and ask about any competing offers to make informed decisions.
Inflating Success Rates:
Some agents may boast about their high success rates to create a perception of expertise and influence.
However, it’s important for buyers and sellers to delve deeper and verify these claims.
Bait and Switch Technique
The “bait and switch” technique is a deceptive tactic employed by some real estate agents to attract potential buyers or sellers.
It involves advertising a property or service at an appealing price or with enticing features, only to switch it with something different once the buyer or seller is interested.
This tactic aims to lure individuals in with a compelling offer, only to pressure them into accepting a less desirable option.
One common trick employed by some real estate agents is the creation of false urgency to push buyers into making quick offers.
Tight Deadlines and Limited Timeframes
Be wary of agents who try to impose tight deadlines and limited timeframes for making an offer.
They might tell you that the property will only be available for a short period or that other buyers are ready to snatch it up.
While it’s true that attractive properties can sell quickly, don’t let this pressure you into making a rushed decision.
Take the time to thoroughly evaluate the property, consider your options, and consult with professionals before committing.
Constant Push for Offers
If an agent is constantly pressuring you to make an offer on a house without providing sufficient time for due diligence or additional viewings, it could be a sign of their deceptive tactics.
Genuine agents understand that buying a property is a significant decision that requires careful consideration.
Bottom Line
It’s important to be aware of the common tricks that real estate agents may use to get a bigger commission, as falling for them could cost you a lot of money.
Always do your research and ask questions to ensure that you are dealing with an honest and reputable agent.
If you encounter a shady realtor, don’t hesitate to fire them and file a complaint if necessary.