But not everyone who has a real estate license is a good agent—or an ethical one. Sometimes the red flags around an agent are big and obvious, but sometimes real estate pros engage in subtle little scams that aren’t obvious at all. These down-low tricks aren’t always illegal, but they’re unethical—and they can cost you big time when it comes to what’s likely the biggest financial purchase in your life. If you’re looking for a real estate pro to help you with your house hunt or sale, watch out for these subtle scams.
You can defend yourself from this simply by getting other referrals for any services you need, especially when it comes to mortgage brokers. Real estate agents sometimes have what are called “preferred lenders,” and there can be benefits to using them (like a smoother process)—but you never have to use them. Getting a few other quotes will help you figure out if the person your agent suggests is doing right by you.
Buying a listing
It’s called “buying a listing.” They know that if they confidently assure you that your house will sell for significantly more, you’ll be enticed to sign with them. And they know that when offers come in lower than they promised they can blame the shifting market or some aspect of the property for the discrepancy—and you will probably not be willing to walk away from an offer even if it’s not as high as you were led to expect.
If you’re working with a real estate agent and you notice that they never show you homes in specific areas, or ignore your preferences and only show you homes in certain areas, you might be the victim of “steering.”
Some signs that you’re being steered include a lot of personal opinions from your agent on who should live in certain properties and a pattern of ignoring your preferences in terms of property size, type, and location.
Personal property
It’s true that it’s not uncommon to buy stuff like furniture or appliances from a seller, and these items are usually considered personal property and a separate sale. But lying about this is, of course, illegal, and opens you up to a long list of potential consequences.
Some agents will promise the moon when closing you as a client, then actually do very little in terms of marketing, which saves them time and money. They might still sell your home, of course, but they won’t work as hard for that commission as you expected. Your best practice is to make the marketing plan part of the contract—and then follow up to make sure the plan is being followed.
Bait listings
Bait listings are sometimes old listings that saw a lot of interest, so the agent leaves them up in order to attract latecomers, but they can also be deceptive listings designed to lure interest. Once the agent has you in their office or on the phone, they admit the listing is gone—but assure you they can find the right property for you regardless.
Meanwhile, the agent may have gotten away with a triple commission: From you and the investor on your home’s sale, then later when the investor sells the house again. Always be skeptical of an off-market suggestion and drill down into how it helps you to have fewer potential buyers—and get your own estimates on repairs and improvements that will make your home more marketable.
The ghost buyer
When you’re selling your house and looking for an agent, they contact you and tell you they have an interested buyer, or your property fits the bill for someone they know of. Then they push for you to hire them as your agent. That interest buyer probably vanishes—they were just a way to get the agent’s foot in your door.
The best way to defend against ghost buyers is to choose your listing agent according to your needs, and not just because they rang you up out of the blue, and to know at the outset how much you’re willing to pay for a house—and commit to sticking to that.
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