Real estate agents should have your best interests at heart, but you need to remember they’re driven by commission. Understanding some of their tricks will help protect against becoming their victim.
Underquoting is one of the more popular real estate agent tricks. This involves setting a low initial quote before getting you to bid at auction or private sale for what they believe should be an even lower price.
1. Underquoting
Real estate professionals frequently take heat for overquoting properties, but there’s another tactic more insidious: underquoting. Underquoting involves advertising properties at prices lower than estimated selling prices or what sellers are willing to accept as selling price in order to generate interest and competition among potential buyers. Not only is this unethical but it could potentially damage your sale while costing time and money as well.
Underquoting can be especially problematic for first time homebuyers. Doing so may result in shortlisting properties outside their budget and spending hours driving to open for inspections as well as incurring building and pest inspection fees and town planner options costs. Furthermore, this strategy could cause buyers to spend unnecessary money on solicitor fees, mortgage broker fees, insurance premiums, valuation fees, valuation services and valuation services among other costs.
Real estate agents must give buyers an estimated selling price (ESP) when marketing or selling any property they represent in order to avoid being caught short-quoting, including recent comparable sales in the area and knowledge about value assessments of comparable properties sold recently by agents themselves. Some agents intentionally underquote prices in order to draw more interest by setting low expectations – setting low thresholds can only work against them!
As this practice can mislead potential buyers and damage the real estate industry’s credibility, buyers should keep in mind that ESP can be raised during a marketing campaign if market conditions demand.
Some agents may remove an estimated sale price from online advertisements and only disclose it or provide it verbally when speaking to potential buyers, or step-quote (ie increase pricing prior to auction day or proposed sale date) before auction day or sale date (known as step-quoting).
If your agent appears to be underquoting for a property that interests you, Consumer Affairs or your state/territory real estate body should investigate and take the appropriate actions if needed. Please keep in mind that some agents may claim they’re not underquoting when challenged – usually by shifting blame onto you – much like when naughty schoolboys attempt to point the finger back at someone in authority.
2. Lying about the value of your home
Real estate agents frequently try to lure home sellers in by exaggerating the property value. While this tactic can generate more interest and convince potential buyers to make offers, if taken too far it could prove dangerous for the seller. A good rule of thumb would be finding an impartial appraiser who will give an objective and accurate valuation of your home to avoid falling prey to real estate agent tactics.
Real estate agents sometimes defraud their clients by informing them they have a buyer in the pipeline when there really is none, taking advantage of buyer fear to keep the property off the market longer than it would if priced correctly initially. This scam is most prevalent when markets have been stagnant or weak; such deception often extends property listings for longer.
Some agents will tell their clients they have received other offers on their property when none exist, taking advantage of buyers’ eagerness to own it and increasing bidding wars over what was initially listed as asking price. This tactic can lead to higher bids that end up exceeding your original asking price by several thousands of dollars.
Due to this reason, it’s critical that you are clear with your real estate agent on what expectations you have. Don’t choose an agent solely on their recommended listing price and always obtain your own professional valuation before engaging one to sell your home.
An unscrupulous real estate agent may use any means available to them to attempt and take advantage of you, so to prevent being taken advantage of by one, be wary of their tactics and avoid them at all costs. When choosing an agent, look for one who cares more about meeting your needs than their commission check alone.
Do you have questions about the real estate market or are interested in selling your property? Reach out to me to arrange a complimentary consultation session – I serve buyers and sellers throughout MetroWest MA towns such as Ashland, Bellingham, Franklin, Holliston Hopkinton Medway Millbury Mendon Southborough
3. Getting you to commit to a sale
Like in any industry, some real estate agents attempt to deceive their clients for personal gain through various tactics – pocket listings and false pricing among them.
They might try to convince their clients to commit to a sale without receiving the full information, by making claims such as property needing urgently to be sold or suggesting they won’t get the best price unless they sell quickly. This is one of the most widely practiced real estate tricks and its effects can be extremely harmful if you fall prey.
If you find yourself in this position, the key to keeping emotions under control and remembering that taking your time when shopping for a home is perfectly fine. Knowing your budget also helps; so as not to overspend for something you won’t be able to maintain is of vital importance.
Do not feel pressured into using an agent’s mortgage broker as this is illegal; your best bet would be shopping around for one who offers you the best deal. Get at least two quotes from different brokers before committing to any property, this will enable you to make more informed decisions and avoid falling for any shady real estate tricks that might be in play. I service Real Estate Sales throughout Metrowest Massachusetts towns such as Ashland, Bellingham, Brookline, Franklin Framingham Holliston Hopkinton Medway Mendon Millville Northborough Shrewsbury Westborough MA as well.
4. Creating phantom buyers
Real estate agents may create “phantom buyers” to increase the price of your home. This tactic involves telling potential buyers that the seller has another offer on their property when there is none; this causes buyers to increase bids or demand unreasonable conditions within their contract, impacting closing dates and conditions as a result. It’s crucial that if dealing with agents using this tactic that they request proof of this other offer.
Another way of creating a phantom buyer is to tell the seller that there is someone waiting in line and will only buy when the right property becomes available. Unfortunately, this strategy won’t help speed up the selling process and may create additional stress for yourself and any prospective buyers.
If your agent seems to be using this tactic, don’t panic. With patience and persistence there are still options that could ensure that your home sells for an equitable price.
One of the more devious tactics real estate agents employ is underquoting the value of your home to draw more buyers in for auction or private sale – ultimately it comes down to money for them and earning commission.
Agents often underquote property values with the hope that sellers become anxious and drop their asking prices as quickly as possible, giving them an easy opportunity to earn additional commission without exerting too much effort themselves.
Understanding the tactics real estate agents employ so you can avoid them is essential to finding an honest agent who will represent your best interests when selling your home at an excellent price. Take time and do your research when searching for one who will truly work in your favor to sell your property quickly and for maximum return.
Keep in mind that your real estate agent’s job is to maximize the sale of your home; if they cannot do this effectively, then they should no longer be in this business.