It is not uncommon for realtors to use dubious methods to increase sales. They may rush you to sign the contract or even on a verbal price to speed up the sale. A survey of real estate brokers found that such practices exist. It is disturbing to know that only a few of the brokers consider it wrong.
Here is a list of the 10 most unethical real estate practices every buyer should be aware of:
1. The listing agent misrepresents the existence of high demand for the property –
Because there are so many offers from other buyers, don’t be surprised if the agent tells you that if you negotiate too much or take too long to come to a decision, your chances of getting the property are slim. 31.8% of realtors surveyed admitted that it is common practice to seal the deal quickly.
2. Your agent will not show properties that have less co-op compensation than is normally allowed by agents –
This is not accepted by the buyer, but 61.8% of real estate traders said it was objectionable. The remaining percentage has no complaints about this and they are very large in number.
3. Your agent will not introduce you to houses listed by brokerage firms based on previous experience and reputation as a buyer –
20.1% of realtors admitted it was one of the most common ways to move a deal forward. Although the percentage isn’t on the high side, it’s enough to make you question a seemingly fair deal.
4. Agent can display their own list or company list as per their choice – 49.6 percent of the survey participants thought it was okay to be followed, which clearly shows that breach of trust is common in the real estate business. If you’re looking for transparency, you can’t really depend on the broker.
5. If you want to buy a freehold property, your agent will not represent you –
Yes, this is a fact. If you’re thinking that hiring an agent will help you with any type of home purchase, you’re in for a rude shock. If you want to buy a house without a broker involved, you should contact the seller yourself.
6. The referrer does not know the referral fees the agent receives – 59.8% of agents think that it is a way of doing business. But the huge referral fees earned by the agent mean they may end up in a deal that doesn’t work for you, so it’s not good for the buyer.
7. An agent may refer you to another agent who has no knowledge of the quality and value of the service they provide – 33.1% of representatives think that this is a common practice, but it is definitely harmful to unsuspecting buyers. The referred agent may pay 20% of the commission to the agent. This is an eye opener for buyers.
8. Unrealistic prices are accepted by listing agents to increase the chance of a transaction – Unrepresented buyers fall into the trap. The company tries to cover the transaction fees with higher prices. But the property cannot sell at the listed price and the seller is the one who suffers.
9. The agent you employ may represent the seller in the same contract – Surprisingly, 40.9% of realtors think this practice is very common and acceptable. It’s shockingly true but it’s there. How can you hope that your interests will be protected when the agent is acting on behalf of the two opposing parties?
10. To close the deal quickly, the agent informs the seller of important information – Believe it or not, they do. Even before the negotiation, the agent can state the minimum amount they are willing to pay for the property. This robs you of the opportunity to get lower rates.
While it’s impossible to go without an agent when buying a home, the revelations of the worst practices in the real estate market should put you on your guard.