Real estate agents tend to get a bad rap. But let’s face it, there are unprofessional people in every line of work. That also means there are plenty of great real estate agents - the kind that will help you earn more money as a seller or get more for your investment as a buyer. The key is to find those agents when it’s time to buy or sell a home. Need a hint? Keep an eye out for these common real estate gimmicks...that may not have the best interests of the client in mind.
Real Estate Agent Gimmicks to Watch Out For
1. “I have a buyer for your home.”
Whether it’s delivered in a letter or by phone, this a common trick some real estate agents use to get their foot in the door with a potential home seller.
“When I first started in real estate, that was one of the first things we were taught,” says Carl Seier, a real estate agent with Sigmar MacKenzie Real Estate in Winnipeg. “They told us that there’s an agent out there who will have a buyer for that area, so technically you’re not lying. But that’s not the reason to hire a real estate agent. You want one with the best marketing plan.”
If a real estate agent really has a buyer for your home, he or she should arrive with an offer. Otherwise, that agent is probably just trying to get your attention - and your business. What you really want is an agent who’s willing to price your home competitively and market it to sell.
2. “This is definitely the property for you – but it probably won’t last.”
Good real estate agents don’t sell houses; they help buyers through the process of finding the best home they can afford. So, if you feel serious pressure from your agent to buy a particular house, something’s up.
“Agents want to make a sale. A lot of agents are living paycheck to paycheck, so the quicker they can close a buyer, the quicker they get paid,” Seier said.
Plus, in some provinces, agents may be looking to “double-end” a real estate deal. This happens when they represent both the seller and the buyer, and therefore cash in on both commissions. This isn’t necessarily a bad thing, but if an agent pressures you to buy one house over another, you should be wary.
3. “If your house doesn’t sell, I’ll buy it.”
Offering to buy an unsold house is another common tactic some real estate agents use. It isn’t dishonest (sellers will have to sign a contract with all the details), but while it may help agents attract more clients, it isn’t all it’s cracked up to be. The problem? The price you’ll get for the home in this case is much lower than list price - often as little as 85 percent of the home’s appraised value, Seier says.
“It’s not a reason to list your home. List your home because your agent has devised a thorough marketing plan,” Seier said.
4. “This price will get you a bidding war.”
A bidding war happens when buyers get competitive with each other while making offers on a property. This often drives the home’s price up well beyond list price. This is an outcome many sellers (and, let’s face it, agents) fantasize about, but Seier cautions that it’s exceedingly rare. Plus, the strategy often involves listing the home for less than it’s worth, and that, says Seier, is a big risk to take.
“Agents are promising bidding wars, but when they don’t happen, the agent increases the home’s price. That’s the kiss of death,” Seier said. “Choose a list price you can actually live with, not one that might get bid up.”
5. “I’m the biggest, I’m the best.”
Every city has at least one big-shot real estate agent. Maybe it’s someone who’s been working in the business for decades. Maybe he or she has invested a lot of time and money into high-quality advertising. Or maybe that individual is just a great agent who gets a lot of referrals. Or...maybe not. While a lot of clients can be a sign of an agent with a track record for getting the job done, it might also be a sign of what you might call “incumbent advantage”. Everyone likes a winner, so they pick the biggest agent, the one everyone else is hiring.
The problem is that this can often mean poorer service. If an agent is listing 40 to 50 houses at one time, chances are he or she isn’t going to have much time for you. Plus, many of the biggest agents use a team approach. So, while you might think you’re hiring the guy whose face you see on bus benches, what you really get is one of his assistants.
Forget the Gimmicks
So, with all these sales gimmicks, how can you find a real estate agent you can trust? You probably didn’t (or shouldn’t) hire your accountant or financial advisor (even your hairdresser) on a whim. Your real estate agent's no different. Whether you’re buying or selling a home, you’re dealing with big money. A good agent can make a big difference; a bad one can make for a very bad experience. So shop around. Ask your friends for referrals. Look for reviews online. Then sit down with your top prospects and ask them what they’ll do to make sure you’re informed, you’re advised and that you get the most for your money - or the most money for your house. Accomplishing that isn’t a gimmick; it’s hard work. And that’s something worth paying for.