Most prospective house hunters or sellers think they have a “good” agent. Either it’s someone who they previously worked with or perhaps a referral from a friend or a co-worker. One of the big reasons for having confidence in their agent is a belief that the agent is “on their side” and “honest” etc etc. I would suggest however that by a certain point in the process, your agent is your enemy and you are negotiating against them more than the other party. This post deals with the buy side of the house buying game. The next post will deal with the sell side.
In the beginning: happy friends
When a house buyer first signs up with an agent, things are usually pretty rosy, the agent assures the person that they can find an appropriate house for a price you can afford and everything will be great. The agent has “lots” of experience and knows the area inside out. At this stage of the game, you and your agent are mostly on the same page. You want to buy a house and they want you to buy a house. Your agent will most certainly want to get the process over with sooner rather than later, but that’s usually the case with the buyer as well.
During the search: uneasy allies
Agents know that they need to spend a fair bit of time with a buyer, especially ones who want to look at a lot of houses. After a while however it’s not worth it for an agent to continue a long search especially if their contract is running out. This is the time when the agent will start trying to convince the buyer to lower their standards and raise their prices. Sometimes this is educational if the buyer has unrealistic expectation, but mainly this is to speed up the process so the agent can get paid. I should point out however that real agents are normally quite useful during the search since they often know more than you do about the general real estate and can get you access to private showings. The other big benefit is their access to sale price information for similar houses.
Related – How to win a house bidding war
Thinking about putting in an offer? Trust no one!
The point when the buyer submits a offer on a house is a time when a lot of house buyers, particularly first timers feel out of their element and defer to their agent for advice. This is the worst thing you can do. Your agent gets paid when the deal gets done and only when it gets done.
This is a time when knowledge of the real estate market should be a big help in determining how much negotiation should be done. As well, if the buyer is not in a hurry to buy then that sets up a great negotiation opportunity. However if there is one thing that real estate agents don’t like it’s clients who negotiate hard – why? Because the only way to negotiate properly in a deal is to be able to walk away if the price you want isn’t met. The way an agent sees this type of situation is that if a deal falls through, they have to spend a lot more time looking at houses with you before they get paid.
Things that your agent might say (and you should ignore) when you are about to put in a bid are:
- “Don’t bid too low or you will offend the sellers”. This is garbage – if the sellers can’t handle a low ball bid then they are unrealistic. And what exactly is a bid that is “too low”? I’m not saying put in an unrealistic bid, but don’t be afraid to start low and work your way up. It’s important to know the market so that you don’t have to rely on the asking price or your agent to tell you the proper market value of the house.
- “Don’t bid too low or you might offend the selling agent and might I have to work with them in the future”. This stunning example of gall and self-interest was actually told to Mr. Cheap. I don’t think this one needs any further comments. 🙂
- “You should get a bid in quickly before someone else puts a bid in”. This is a favourite of my agent – create a sense of false urgency, get the deal in motion and get it done ASAP. Sometimes this is good advice, but other times – such as when the house has been sitting on the market for a month or longer then it’s just not appropriate.
- “Someone else is looking at the house later today and they are really interested”. This lie usually originates with the selling agent, but smart buying agents are usually more than willing to play along because it will increase the chances of their buyer putting in an offer in that day.
Negotiation – don’t listen to a word your agent has to say.
At this point you are potentially pretty close to buying a house. You want to buy the house at the lowest price, the seller wants to sell the house to you at the highest price and your agent wants you to buy the house and doesn’t care at all what price you pay because they just want the deal done right now. Since paying a higher price will get the deal done quicker, a lot of agents will encourage you to bid higher which basically means that you are negotiating against them as well as the seller.
Things that your agent might say (and you should ignore) when you are negotiating are:
- “Meet them halfway or in the middle”. This sounds quite reasonable at first- if the asking price of a house is $500,000 and you bid $460,000 and they come back with $490,000 then isn’t splitting the difference at $475,000 quite reasonable? Not if you can get the house for $470,000 or $465k,000 The fact is that the asking price of the house and your first bid are very arbitrary numbers and splitting the difference between the two might end up in a price that is not market value.
- “Are you willing to lose this house for $2,000?” (or $5,000, $8,000) This is a tough one – on the one hand it seems silly to not buy a house and be only a half of a percent away from a deal, but on the other hand shouldn’t your agent be asking this question to the seller? Ie – “We are going to walk, do you really want to lose this deal for $2,000?”
- “Are you willing to lose this house for $12 a month?” This is part two of the previous point which is applied if you don’t bite on the first attempt. It’s also a more useful gambit if the “separation” is a bit greater. If you and the seller are $12,000 apart, that sounds pretty significant, but what if you are only $75 a month apart (for 25 years) or even better what if you are only $63/month apart (over 40 years). That doesn’t sound like much (even if it is).
Conclusion
The more you educate yourself about the real estate market you are looking in and how real estate agents operate, the better off you will be when buying a house. Real estate agents are quite useful because they can get you access to houses for sale and will often drive you around to look at them plus they have access to the sale price of other houses. Whatever you do, never forget that they get paid when the deal gets done and only then. They don’t get paid for showing you more houses or walking away from close deals.
Tune in tomorrow when we take a look at the trustworthiness of real estate agents when selling a house.
Take a look at another perspective on real estate agents that Mr. Cheap wrote.
Do you have any good “lines” that you were told when buying a house?
588 replies on “Why You Can’t Trust Real Estate Agents When Buying A House”
Funny thing is I am currently buying a rental town home, in fact it was supposed to close today and due to a comedy of errors that aren’t really very comedic it isn’t closing. Oh.. and did I mention my agents SUCK. Anyway, back to the article. I put a few lower than advertised offers in and my agent would always say “there are more bids on this you know”, “you need to go higher”, “other people are looking at this place” and “this is a popular neighborhood and the units go quickly”. They tried to encourage me to over bid when I knew that the units would not even appraise at what they wanted me to offer. I have purchased 8 homes in my lifetime and I know a crock when I hear it.
I finally found a unit I liked and made an offer that was accepted. First, I thought I was hiring AN agent, turns out they came as a hubby/wife package deal – except I don’t like the hubby. Oh.. and did I mention that he answers her e-mails? Second, I don’t like the idea of “in-house” lenders and title companies. I chose to go with someone not affiliated with my realtors for both the lender and title company. My realtors have chosen not to help with either of these and it would seem I am on my own in regards to these entities. The sellers realtor will not help either so here I sit on the couch fretting and writing on a blog about how sucky my realtors are. Thirdly, they have complained the entire way about my choice of lender and title company and about how bad they are – yet the realtors haven’t been in contact with them and left me on my own to fill out every piece of paperwork that came from the lender and title company and left me to get it all back to them as well. I am an e-mail, scan, fax, fed-ex queen. Did I mention how my realtors suck?
At this point I feel that I did not need an agent. I have done all the work. I found the unit online, I got the inspection done, I did a follow up inspection with an electrician that I hired. I found my lender, I filled out all paperwork with the lender, I hounded the lender underwriting until they were finished, I scanned and faxed everything they needed and asked for without any help from my agent, I filled out all escrow and title docs by myself and returned them to the out of town escrow company – without my agents help, and I emailed everyone to check up on how every thing was going thru out the entire process. Every once in a while my agent would email to say how smoothly every thing was going. choke choke cough gag. It has not gone smoothly and when I finally talked to my agents about how absent they had been they said it was my fault because I didn’t choose their lender and local escrow company. My agents are wasted spaces of time and air.
Rachelle my dear just an FYI I have been going to school for 4 years for profession to become an informed and educated Realtor but I’m going to give you a little tip: There is NO way you can ever learn more than actually being in this field. It changes EVERY day and is subject to constant research of your markets and their shifts. It’s also subject to supply and demand. Right now we have a ton of supply and an increase in demand but unfortunately for our market that is a lot of distressed properties that are selling well below assessed value.
And just a little bit more information Rachelle, Realtors are required by law to take continued education courses all throughout their career to retain their license. I have met some people that have been in this business for over 20 years and they still blow me away with the knowledge they have of their chosen profession. So please, give me a break and do YOUR research before you go cutting down people who might actually just really love what they do.
And here is a tip for all of you out there who are having problems with your Realtor:
1. If you don’t like your Realtor; fire them. They are a general contractor and if they are proving to not be what you want; stop working with them right away. You don’t have to buy a house with ANYONE you don’t trust. If your ever in doubt about if you can fire your Realtor or not contact their broker. If your not happy with the service you are getting you shouldn’t have to continue that service.
2. Realtor shop: open houses are a great place to find experienced agents around my area. You can go to several open houses in a day and meet a lot of new agents. It’s a great opportunity to see what they are all about and if you click with them or not. usually you can find the weeks open houses in your area by checking your local paper.
finding a good realtor is like buying a new car, the ones that pick the realtor that LOOKS good much like a pretty car end up regretting their choice when the road gets rough but those who do their research, test drive, and so on end up with an smooth ride and great experience.
Dear David:
Generally the way it works in my state is that the seller pays both the listing agent and buyer’s agent from the proceeds of the sale, so please don’t generalize all agents as greedy and so on. The first year in this profession I only mad one sale but I continued to work at it because I love what I do. If it were for the paycheck I wouldn’t have kept at it beyond the first 6 months.
just some food for thought.
I read through all 200+ of these comments with interest and in spots, amusement — and virtually nowhere did I see the consumers reviewing ALL the recent sales in the area with their agent prior to making an offer. This would help with some of the trust issues this write sparked with consumers.
If you are looking in a 97% list to sale ratio market and trying to make a 70% offer on a turnkey house in an affordable price range . . . you may not win.
If the average days on market are under 60, you are buying in a seller’s market and can expect multiple offers. Sometimes winning in a multi-offer situation has nothing to do with the price and everything to do with terms. VA financing, for instance, requires the seller to contribute. A conventional loan does not, necessarily. So both the same, lower net to seller with the VA. REO properties, it is ALL about net to seller.
If you are buying with your ego and looking for a deal, not a house, maybe you don’t need to move until the market turns.
If the deal doesn’t make sense to you, don’t do the deal.
But don’t blame your agent for your expectations, and if you don’t reveal those expectations as the author wants to advise you to withhold information and motivation from them . . . well, most agents are not psychic.
Granted, there are lots of lousy real estate agents in the world. You can’t imagine what the brokers have to deal with! 🙂
Worse, many of these rogue agents end up doing a LOT of business. That’s because they DO promise without delivering, panic sell and then shirk their duties. So it would look like they are great until you find out.
“May we contact your last 6 buyers who closed this year?” is the best question to ask a prospective buyer’s agent.
THEN, you can find out what to expect during the transaction. Ask those clients if they felt pressured. If they were communicated with clearly. If they were informed timely. If they felt fairly treated. And if they would use that agent again.
Also, you can go online to the your state’s department of real estate and see if any ‘consent orders’ or disciplinary actions have been taken against the agent. You’d be amazed at the criminals doing business in your town.
Finally . . . what does a real estate licensee do that earns them a commission? It’s not what they do, but what they have.
THE LICENSE. If you don’t want to deal with agents, get a license. Pay to maintain it. We have to do 24 hours a year of continuing education in AZ . . . pay local, state and national dues . . . this is a super expensive business to be in. Many of my investor clients DO have real estate licenses. Inactive ones. Because they figured out that it IS a lot of work and time and money to be all in. But go for it.
Educated consumers without an ax to grind will solve a lot of the problems lamented here.
BTW . . . I would say for every property I have helped a client buy, there have been at least 3 or 4 I have strongly advised they do NOT buy for they will be overpaying if they do. Ask your prospective agent if they have ever stopped someone from making a deal. See what they say. 🙂
This Christmas one of the owners I’ve been doing business with since 2007 passed away and his widow is selling the house.
It’s a one bedroom house. Listing says 2 bedrooms. It was a former grow op. That is not mentioned on the listing even though by law it must be disclosed.
Listing price is $399,999. 4 Bedroom on the same block is $349,000. I did discuss with the daughter that the house had been priced by numerous agents and that all fell below the original buying price because the original owner paid too much and that was before it was a grow op.
So this poor lady will go on paying heat, electricity and taxes for months and months just so this piece of dirt can display his sign on her front yard.
That is why I hate some real estate agents.
I’ve bought and sold a number of houses and raw land parcels and have had only one agent who was completely on top of his game – I imagine he retired young and rich. I’ve had agents try to convince me earnestly that my houses were worth less than I thought to make a quicker pop, only to see me get what I told them it would sell for in relatively short order. I now refuse to work with a buyer agent and will only work with a seller agent if they do exactly as I tell them. When I call on a property without an agent, it’s always funny to watch them try ever so gently to insinuate themselves into an agency relationship – funny, in a mildly disgusting way.
It’s an institutionalized racket full of professional pick-pockets and it’s ridiculous for an agent to try to assert they’re not first and foremost in it for their own benefit. Anyone out there doing it pro bono? Yeah, I thought not. In what other enterprise can you claim a substantial percentage of someone else’s hard earned wealth with the same small investment, education, effort, and expertise? All it really requires is a license and chutzpah. I look forward to the coming day when there’s an effective web site to match buyers and sellers and we see the rank and file horde of real estate agents and companies go the way of their travel brethren, who actually made life more enjoyable.
To: David
You must have a lot free time to look for a good deal and to market all your good findings without screening and qualifying your buyers?
However, I have a doubt…do you really sold your properties at higher price in the market and when you bought them, these properties were a bargain? That’s luck!
Or do you really had a hard time doing all that by yourself and not losing your all energies and money? How do you know you didn’t lose money in every transaction?
Everybody thinks that Real Estate agents make a lots of money doing nothing, or they don’t deserve to have been getting pay for the job done.
People don’t realize that the job of a Realtor is very hard.
I agree with a lot of your points. I worked selling new homes for homebuilders prior to becoming a licensed agent. Part of the reason I enjoy being an agent is that I can represent buyers that would otherwise overpay. I have represented several buyers that were talking to for sale by owner homes that were overpriced (most seem to be) and was able to run market analysis, show them several options of other homes in the area so that they could make a viable offer to the FSBO. They ended up using me to represent them to the FSBO and the seller paid my commission. The seller would have ended up waiting on the market for a long time because noone could have even gotten the home appraised so I believe it was a win-win. Anyway I actually share the comparable information with the buyers I represent so that they know what has sold recently and explain how I actually come up with their analysis so they can feel comfortable in their negotiation. Ask your agent to share the comps with you, that allows you to see if they truly are negotiating on your behalf or just want you out of their car so to speak :0) Long term full time agents that are smart will look at the big picture not the short but you must also exercise your due diligance in choosing your agent. Don’t be afraid to ask to see the data that they are using, if they are just winging it well- you know what to do.
As a real estate agent I was intrigued by this post. Some of the common negotiating phrases do come up all too often yet they can be true in many cases. For example, making an offensively low offer will more than likely result in a higher counteroffer from the seller. And keep in mind you’ll likely be asking for repairs or allowances after your inspection. Perhaps the most important thing to consider is something not mentioned in this post. We do want to get paid, the most we can and as quickly as possible, we’re human. However, roughly 90% of my and many realtor’s business comes from repeat customers or referrals. That means that the commission I’m making on a single home is nothing compared to potentially dozens down the road if you know the people you send to me will be taken care of. It’s absolutely not worth it to us to upset a customer in the interest of a quicker closing. The best thing you can do is educate yourself before you even begin. Ask questions, talk to friends, family and coworkers. Chances are the people you trust can provide you with at least a few different realtors to interview. The more knowledgable you make yourself about the home buying process the better. Good luck!
I’ll start off by saying that I am a real estate agent. Then ill say that you can’t judge everyone because of a few bad apples! I would rather lose a sale than to lose a client. I give buyers a CMA or at the very least all the comparable sold properties in the last 6 months and let them make up their mind on what they want to offer. I also don’t make any buyer sign any contract while they are looking so if they don’t like my services they can walk away and if I don’t like them I can fire them as well. There is nothing more exciting to me than the negotiation and I use a series of skills that I have learned over the years to try to get the buyer the lowest price possible (unless I represent the seller). With me you can low ball all you want but I do make sure that the buyer knows what fair market value is that way if they lose the property to another buyer then it was not my fault. Also the difference in the sales price does not make that much of a difference. Even a $20,000 difference will only amount to $600 and totally not worth losing a client and my reputation. Just last month the day before closing I told one of my short sale clients to not close on a property because the bank was refusing to waive their right to a deficiency judgement so there was no benefit to my seller. The bank changed their mind at the last minute and waived their right for a deficiency judgement but if they had not I would have advised my client not to close and yes it would have killed my own pay day but I would have retained my morals and pride. Are there dishonest realtors….sure just like there are dishonest doctors, lawyers, accountants……but not all of us are out for a quick buck.
Eric Chavarria
My realtor probably lost me the house I really wanted because he thought it was unethical to put in an offer to purchase subject to finance????? I’m still puzzled!
Wow– you must have had some bad experiences with unethical agents! Real estate agents, if they are to succeed over the long term, MUST put their clients’ interests first and protect them at every turn to earn a reputation that really pays off. Having worked in this business for over 30 years, I can tell you with 100% confidence that we are here to serve, protect, and assist our clients, not to slam-dunk a deal for an easy, one-time commission.
WSJ Today – Are Real Estate Agents Dinosaurs?
http://online.wsj.com/article/SB10001424052970203918304577243733524891636.html?mod=WSJ_hps_sections_realestate
It’s only a matter of time. Note the part about reduced levels of equity and unwillingness to part with 5 or 6 percent of the total value.
Just a follow up on my previous comment. I met a seller’s agent a couple of weeks ago to look at an old farmstead with 60 acres to find much of it was unusable wetlands – not previously disclosed. In talking with him as we were wrapping up he asked me whether I’d seen another parcel he was listing not too far away. I said I’d seen it on the MLS but thought the seller was asking way too much so I hadn’t bothered to look at it. Without missing a beat he said, “Oh, don’t worry about the price. I can get it for you for a whole lot less. He’s (the owner) old and doesn’t have any use for it.” I see this time and time again. And of course he offered rather clumsily to look for properties for me as my wife and I walked away.
A) Not all Realtors fit this description.
B) Some Realtors are ethical and do not subscribe to the philosophy you proposed.
C) I’m sorry you have had a bad Realtor experience and felt compelled to ‘lump us’ together in this fashion.
It is a buyer’s market. There are an abundance of buyers. Surprise, surprise most of them want to bid on the best and cheapest properties.
From an investor’s point of view, if you low ball the offer expect to get knocked out. Don’t blame your agent because you hestitated or thought you’d get a steal on a property but didn’t make an offer accordingly.
Abundance of buyers? I detect a problem with this logic. Typically in a buyer’s market there is an abundance of people competing with each other to sell their properties (thereby depressing prices) coupled with a dearth of buyers. It only equalizes when the prices are sufficiently low that there is a buyer for every property. When there is more money chasing properties than there are properties for sale, that’s called a “seller’s market”.
Boy, that’s the type of razor sharp advocacy I’m talkin’ ’bout.
While I understand this frustration with real estate agents, I would like to add that the majority of agents do not act in this way. I am a Realtor myself in Minnesota and would never dream of saying these things to a client of mine. I know that other agents do and I can’t stand it but do bear in mind that most of us are honest people. The right agent would not feed you those lines.
As Robert Paredez said near the top of the comments, the best way to go about helping a client when making a bid or when they are selling their home is to provide them with all of the information available and let them make their own decision. As agents, we are here to guide our clients but never lead them to a conclusion. It is always their choice as to whether to bid, accept or counter.
Like I said, I know these agents exist out in the real estate world. It is a sad truth but please remember that many of us have our clients’ needs at the forefront and always will.
Yikes. When I read this article at first, I was appalled at some of the things that Mike points out. While, I understand the points that he brings up, I definitely feel like they are coming from someone very jaded with the industry. However, after reading some of the comments posted by fellow agents, I am embarrassed to even admit I’m a Realtor! Spelling, grammar and punctuation are all a part of looking, acting, and operating in a professional manner. How on EARTH some people can claim to be professional and not know basic grammatical rules and spelling is beyond me.
However, I will respond to the article a bit…
While I understand it’s easy to blame the Realtor, where is the buyer’s responsibility for the person HE chose to represent himself? You have thousands of options when choosing a Realtor (literally) and there are PLENTY of agents out there who can spell, negotiate, and WILL act in your best interests. This is why it’s so important to research and interview your agent. You wouldn’t just go with any lawyer off of a street sign if you found yourself in legal trouble, so why would you go with a Realtor that you haven’t interviewed and gotten to know?
I’ve heard about agents who do all the awful things listed in this article, but I 100% believe that when I work for a client, I work for HIM. I work tirelessly to find the right house for whomever I am working with. Once we find it, my goal then becomes to get him the house at the best price possible. Sometimes that’s below fair market value, sometimes that’s above. It depends on the market; it depends on the buyer’s comfort level; and it depends on the seller’s patience.
What most people fail to consider is that negotiations ARE a gamble and while those questions are frustrating, a Realtor MUST ask them. “Are you willing to walk away for a few thousand dollars?” I’ve had clients say yes, and I’ve had them say no. But that doesn’t change the fact that the question DOES need to be asked. It’s up to the buyer to answer it honestly.
Real estate is emotional. Negotiations will never be black and white. This is why it’s so important to find a Realtor that you trust and work with him or her to find a price that makes you comfortable and that gets you the house you want.
How do you legally make public a realtor and the company to warn others not to use them. If someone had warned us we would not have hired the realtor. Am I not allowed to give my personal opinion on the experience we had and are still trying to get out of even though the manager/owner refuses to return our emails and forget about the BCREA, dont even know why they have a complaint form when they have no power to do a thing. Yet it says that they regulate realtors. I guess as the home owner we have to put up with the abuse of power of realtors and even when you dont trust them they wont release you unconditionally but hold you hostage because you pissed them off, they are not all like this but not allowing someone to move on and re list with another realtor basically impedes the right of the client to their livelihood does it not. I think that you should not have to sign a binding contract until the realtor proves themselves. We should be able sign for 1 month and if they dont suit you or tell you to lower the price then get rid of them…but alas it is not so…you as a home owner are at the mercy of your realtor. They tell you they are professional and ethical until you pissed them off then you dont know if you got calls for viewings, you dont get feedback from them from any viewings. we kept getting told they weren’t returning her calls so I started emailing them, surprise nice polite feedback usually within the hour. Our realtor didnt advertise except on MLS we advertised it and just put her information on it. We are to blame financially we couldnt afford a Remax or Coldwell Realtor so we went with the cheap company in bc…now we are relisting with REMAX but not until the hostage situation with our realtor is over at the end of april 2012 by then we will have lost our home we put the offer on, subject to sell of ours. cant sell if you arent allowed to list..That is what I call professionalism and putting the interests of the client first…NOT
i was supposed to close on a house the other day and everything was going smooth my attorney called the day before and said to bring the check they needed and the day of closing 7 hours before we were supposed to meet with them they called and said they are having problems with the house the seller is buying. is that legally enough notice?
Here’s is the complete story: We listed with a realty company and things were fine until we had to start telling her to advertise or maybe do virtual tour of our home. She said she never really got any sales from advertising on craigslist or other sites like that and she said virtual tours dont really encourage more people to come to your home. But then I saw she had one on another clients of hers. We offered to pay for it. At the sitting before signing contract we told her we would not tolerate lying or bullshit as we had already got out of another contract with realtor for those reasons. We told her no open houses and she said they dont sell your house so she was okay with that. We said no lock box as we have kittens that arent allowed outside and have to be put in the kennel and the puppy has to be outside with us or he will piddle in the house from excitement. She said fine and we could just let realtors in and wait outside…thank god we didnt have a lock box as 1 realtor left my back door wide open when they left the house and the one realtor left my bedroom patio door open and came thru that way with their clients with their shoes on across my carpet. When we werent getting any movement on the house we asked for another realtor to co list and thats when she lost it on us. Asking who was going to pay the other realtor fee and she certainly wasnt going to. Even after we told her we talked to her manager/owner and he assured us we pay one fee only and it goes to whoever sells first she still insisted she wasnt paying and it wasnt needed to have another realtor to generate more interest but for the first two months her son was co listing agent so we couldnt understand why she was so upset. An seeing as she wasnt advertising it anywhere except MLS we thought it might help bring in more clients Every time we questioned her on issues if she didnt like the question she wouldnt answer the email. It went back and forth with me making comments and her making comments to the point we asked for an unconditional release if she didnt want to have another agent come on board, she sent back an email stating ” the only release you will get will be the conditional one forbidding you to sell your home for 60 days or you can sign the other form lowering the price of your home, your choice”. (funny we thought how she wanted our price to $12,000 less the house her son has listed 2 blocks from us and it is approx. 800sqft smaller with no man toy garage or workshop) she said it was up to her to agree to another agent and she wouldnt and it was up to her whether we got an unconditional release and she said that was not an option as she was the only one who could give it. At that point we emailed her manager/owner and told him we wanted a release immediately and that we would file a complaint as now we couldnt work with her. He replied sorry but you will have to work it out with your realtor. How do you work out something with someone who is now holding the possible sell of your house hostage and with someone you no longer have trust with. We did not sign either and I made peace and then told her to watch her step or we would not let her be our buyer, things were fine for awhile but a leopard doesnt change its spots. Thru all the crap she would email and say we REFUSED to allow open houses after we told her we would allow them but with 2 people present in our home as it has 2 floors and an outside workshop and bedrooms at seperate ends of the house..we told her that she could not keep an eye on everyone and we didnt want things to go missing keep in mind that we had no trust in her any longer but had no choice but to deal with her in order to keep our house on the market. She would also state in emails when we confront her about back peddling on things she said and we got her in a lie that we were being very difficult and we were harassing the people that came to our house and that we were REFUSING showings. A refusal to her was when we couldnt make the time the realtor wanted and we asked to rebook later in the day or another day or time. Every time she didnt like what we said she always made her emails out like we were the problem. It finally got to the point where my husband had to deal with her only, it was causing me to much stress and I was afraid I would have another mini stroke. We asked for a unconditional release again and she refused. We finally signed a conditional one as we could no longer deal with her and her bullshit but it still forbids us to sell our house before April 23. If that is professionalism as she stated time and time again that she was then I will take unprofessionism any day. Most of you realtors in bc will know which company I dealt with just by reading the service we got. I am in no way saying all realtors are like this. The one we are going to list with at the end of our hostage situation as I call it, is a great realtor and so is the crew that work in the office ..We are going with afull commission realty company like we should have done in the first place.
Thanks for letting me vent
It is apparent that the author of this book did not find a reputable trustworthy Realtor with whom to work. To bad. There are many who are, and I dare say the most successful Realtors did not get there by being dishonest. Anyone in business knows the deal of the moment is not the ONE that determines their success. It is honesty over time in each deal resulting in many deals. I am a Realtor. I do work by a code of ethics, and I do have my clients best interests in mind when working with them. This includes telling a seller the absolute truth about the value of their home, and telling a buyer to start a bit low, to not leave any of their money on the table. When I am working with a buyer I let them know it is prudent to get a home inspection so their are not any hidden defects that would be deal breakers. I have had many a buyer walk away from a home after the inspection shows a hidden problem, like moisture in basement, that a seller will not repair. I also have negotiated hard for my sellers, to bring prices into a realm of reasonable, so they can sell their house for the true value, rather than let it go for below value. It is because I am honest, and I do work for my clients, rather than against them, that I am so busy the loss of a deal because of defects, or prices not reaching a point that both parties can agree on, does not affect me. I am doing just fine. – The buyer I am working with respects me, and will find another house. The seller I am working with respects me, and knows another buyer will come along that is reasonable. Honesty and Integrity go far in this business. I work by the standard of treating others as I would want to be treated in the same situation. It has brought me far. The loss of deals because of honesty and integrity only ingrain in my clients a larger amount of loyalty as they understand more deeply that I am indeed working for thier best interests.
So.. the author of the book has had a negative experience with Realtors.. I am sorry he has. I have been able to find my clients a better house for a price they can afford than they originally thought… I have been able to negotiate the price up into an acceptable range for my sellers. I hired an assistant years ago to help me with the flood of business I have. Loss of deals because of uprightness and integrity have only made my business strong, and flourish. My clients do not go away.. they stick with me through out their lifetime.
Kindest Regards,
Hi,
I’ll tell you my bad experience with my Real Estate Agent Tania Menicucci.
She referred an Inspector to inspect the house we were purchasing and we were told the house was in good condition, except for some minor things. I don’t know if I should have trusted either of them because of the conflict of interest they both had. I should not have trusted either of them because we later found out a burried pool existed in the property which the Inspector never disclosed to us and which we are now having problems because it was not disposed of properly.
Is it legal for a realtor to offer a sum of money to buyer to buy a home?
Everyone complaining,
If you are here to tell the one bad time something happened to you and a Realtor than stop. If it was so bad you should of fired your Realtor. You should of went to the police and local Realtors board to file a case. These 2 steps would of stopped the bad transaction and you probably would of come out smelling like roses because everyone else would of started offering you something to continue the transaction regardless of if you were right or wrong. But you did nothing. So stop complaining.
Mike,
It is illegal for an agent to offer a sum of money to a buyer. However, there are many things you can offer besides money. There are gift cards, appliances, services (not sexual services, I knew what you were thinking, but cleaning services, handyman services, etc.). These things are perfectly legal where I am at. Buyers do it all the time. They get right at closing than get cold feet and say they are going to back out the day before closing. So seller’s or agents usually have to give something to them. Buyer’s I think are crazy to buy a certain home because of some small compensation though.
Not sure which is more shady, your story or slandering someone to sell your book. Shame on you. I have worked in Real Estate for over 15 years and although you may find a bad apple from time to time it does not mean the all the fruit of the tree is bad. Slander for your own profit……well that my friend is bad fruit.
I agree with this BLOG. EVERY agent I have met (with the exception of one) has been shady. Even the guy who first sold me my house and whom I thought was nice, thorough, and completely comptent.
Their interest is closing the deal and making as much cash as possible as soon as possible regardless of how you fare in the process. They will push hard and engage in all sorts of unscrupulous actions to that end.
As for the agenda who say most are great and there are a few bad apples in any bunch–not true. Most agents probably rationalize their own behavior and are not self aware enough to realize how predatory/opportunistic they actually are.
I feel my agent is my enemy as well-and am almost of the view that they should only be used to sell homes…Otherwise hire an attorney to oversee the deal. You’ll pay far less and your intersts will be protected.
I believe in the Charter of Human Rights and Freedom of Expression. I think that it is sad when people are discouraged from speaking out due to claims of slander. Do we live within a democracy? Or must we muffle our opinions and beliefs?
My opinion is that Mr. Holman is correct; my experience has been that realtors only care about their commission. After all, a realtor’s commission is their bread and butter. It should be up to the customers and clients to determine if they are satisfied with the real estate service. It does not reassure me when a realtor defends his own profession.
I just experienced what this article is talking about. The moral of the story is bid what you want to bid and not a single dollar more, bc whether it is greed or pure stupidity your agent will prompt you to over bid for the sake of “getting you in that home.” As long as your deal isnt an insult, they will counteroffer if the amount isnt agreeable. And if they dont counter and go with another bid, you can be assured someone probably was willing to pay more and you were never going to get it anyway.
I also… just experienced what this article is talking about to a tee! Today was the last straw. I know what the homes in my area, that have recently sold… sold for. And I know what the asking price was. She did not like what I had to say. She is definitely getting tried of my low offers. But, the thing is many of the houses I refused to go higher on… actually sold for lower than I WOULD have offered, if she hadn’t not, told me it would be an insult for me to offer so little. This is the case in about 5 or 6 homes over the past 2 months.
I always provide the buyers that I represent a buyers CMA. That is a printout of ALL of the homes sold in last 6 months, pending & for sale. I will go over that report with my buyers. That being said every agent that shows you a home does not “represent” you. Representation is only guaranteed through a Buyer’s representation agreement signed by both parties to the transaction. If that agreement is not signed any agent is working for the Seller. As a REALTOR our ethics and directives are clear but some of the expectations stated above are ludicrous. How would the agent or the inspector know there was a prior pool? It is not common practice or in the scope of duty to dig around your entire back yard? The Sellers disclosure also does not ask for that information so you would have to ask the Seller specifically if they ever had a pool.
Interview your agent and ask them questions about their prior clients, set up your expectations etc. This is the largest purchase of most people’s lives and typically they just call the listing agent and have them show the home or worse yet call in and have ANY agent in the office show them a home and represent them. Take a little time on the front end and you will have a better experience overall. There are good and bad agents just like every other profession. Most of my clients are by referral because I live in the areas I sell and I believe in doing the right thing. I do not however have huge billboards, a huge team to advertise so you won’t find my name on a bench or shopping cart. You would find me via referral and I would also interview you before taking you on as a client. I will show homes “on floor calls” however I will only sign a one home agreement with you until we have had a chance to talk about your other expectations to make sure we are a good fit. That is what you need to look for in an agent. If they are willing to give away all their commissions in order to work with you, how good of a negotiator do you really think they are?
Best of luck in all of your endeavours! :0)
This is the most ridiculous and offensive article I have ever read. To suggest that all Realtors are self-serving and at odds with what is in the best interest of the client is an opinion lacking in facts. Buyers and sellers more likely than not need to guided by those who are experienced and knowledgeable regarding current markets and trends in various regions. I have no doubt there are professionals in every arena, even journalists, with alternative motives. Fortunately, I know of very few Realtors who fit into the category of that being suggested by a less than informed writer. Shame on you.
You know what Realtor…clearly Mike hit a nerve here because this post was published quite a while ago and continues to get comments from realtors incredulous that someone would say this kind of thing about their illustrious profession. I also continues to attract posters of a different variety:buyers and sellers of real estate that have been burned or misled by real estate agents.
I’m totally amazed that a post this old keeps getting comments. It’s far from misinformed.
I am a realtor and I mainly agree with this post. Except the list price is not arbitrary. It is as low as a realtor can convince a seller to go based on market data they present to the seller in a down market. But sometimes lower than the market data suggests because a seller wants out fast. It is not arbitrary, but ballpark would be an apt description. Just like an offer is. I will say that a seller or buyer needs to be able to trust that the realtor is presenting accurate data because it can be edited–sometimes to eliminate distressed property from the mix but possibly to justify a selling price, both on the buy side or the sell side. It is like Freakonomics claims: unequal information creates power. Some states have sales information on the property tax sites, other states have closed record laws and consumers are in the dark completely.
The funny thing is, I’ve heard some of the quotes posted above on the house hunting shows you see on television. Hmm…
Realtors are coming on here and being goofs of course – like always. I have never met a Realtor who didnt play the same silly games. They all say they won’t and then they pull out the same tired old lines. I have always been very upfront with realtors regarding the fact I very likely have had all, if not more the same sales training they have. I know all the cheese and it’s going to waste BOTH our time. They always agree and try to be my pal saying how refreshing it is to have a client like me etc etc. Then they pull the same BS every other dime store realtor does – including emailing me lists of houses that don’t even resemble what we discussed. The “spaghetti on the wall” method of real estate sales.
The fact of the matter is real estate agent is an extremely low barrier to entry carreer. 99.9% are not too intelligent and are spoon fed their “information” by the broker. This is all crap. But these boneheads actually believe it. They simply are not too bright and even when it cuts their own throats they play the same old games, same old lines, tired old pitches ….. and chase away their own commissions doing so.
Real estate agents and their brokers look at their clients like saps to be milked. They think they can “sell us”. What they never comprehend is that many of us “saps” are much brighter then they are.
Just like the retarded kid doesn’t understand he’s retarded, the crazy person doesn’t know they are crazy, the realtor doesn’t know they are dim.
The fact realtors are getting offended by the article proves the article’s validity. Only valid truth hits nerves and provokes such emotional response. But once again the realtors are too dim to realize they themselves have proven the articles very point.
DAVID: Maybe those of us who are offended are honest people who work hard for our clients. I would never begrudge someone who is knowledgeable enough when it comes to the ever changing real estate market. With the attitude “Caveat Emptor”, you are lucky you haven’t ended up in a law suit.
RACHEL: You bet it hits a nerve. It’s irrelevant to me how old this post may be if this is the first time I’ve read it. Please state the facts that support the suggestion that Realtors are contraindicated to an honest transaction.
TIM: “It is better to remain silent and be thought a fool than to speak out and remove all doubt”. I’d like to take credit for a quote that so aptly addresses your ignorant and opinion based comments, but as I’m only a Realtor with a low level of intelligence, I’ve deferred to Abraham Lincoln.
@Realtor —– that shut them up! To every person talking negatively about Realtors, you have to remember there are bad seeds in EVERY profession. To Tim (aka the guy who has all the ‘sales’ training) — it sounds like you may be the bad seed in your profession (just a guess).
I’ve dealt with many a realtor, and many of them have treated me like walking dollar bills. They do not treat you as a human being, but a non-entity. The realtor only sees dollar signs $$$. I’ve been SCREWED, lied to, and money taken from me by realtors. Like one good decent realtor informed me – there are 85% BAD REALTORS and 15% GOOD REALTORS. I agree, wholeheartedly
This is very disturbing, you obviously want to sell you book and have not done your research about the high standards of a REALTOR must follow to belong to the association and how easy is for a REALTOR to lose his license for malpractice.
If people believe everything they read in the web and do not seek for a professional to represent them in a real estate transaction, we would have more consumer taking advantage when purchasing their homes. A buyer representation in most estates and for the most cases is FREE to the buyer. Advising someone not to use a professional REALTOR in a real estate transaction is as bad advice as telling people go to court without a lawyer because lawyers are no good in court. Wow!
Sorry about your loss.
I agree with Hystat – you didn’t do your due diligence. Condos are known for having relatively easy comparables. Big buildings have units selling on a regular basis and the differences between the units aren’t usually that major (or the differences can be easily priced).
The agent’s job is to facilitate real estate deals in order to get the commission. It’s really not her problem if you overpaid or are otherwise unhappy. On the other hand she got an above market price for her other client.
It’s too late now, but you might want to read my article about why you shouldn’t trust real estate agents.
https://moneysmartsblog.com/why-you-cant-trust-real-estate-agents-when-buying-a-house/
Note that I’m not saying they aren’t trustyworthy people or that you shouldn’t use an agent – just don’t trust anything they say when you are discussing real estate with them. This advice also applies to any other commissioned salesperson.
Commissioned salespeople are not on your side ever.
There is a class of people that is anti-realtor. There is nothing wrong with that. Indeed one really doesn’t need a realtor to buy or sell a home, anymore than one absolutely needs a mechanic to fix their car or a plumber to fix a leak. However, in terms of trust, none of us should put ourselves on a pedestal. The buyer and seller and the realtors involved are all looking out for their own self interests. In the end every human being only truly cares about themselves. Does a buyer really care that his realtor gets a commission? Does a seller really care about the buyers agent or even his own broker? No..the seller only cares how much money he can pocket, and the buyer only cares about getting the deal they perceive to be in their best interests. I have been selling real estate for 10 years…and in that time I can tell you that everybody listens to one radio station WIFM. What’s In it For Me.
So I don’t hold it against somebody when they lie to me and try to go around me for deals. Lie to me about their ability to purchase. Or if a seller fails to reveal issues about their home or pending litigation or assessments. If one is incapable of accepting human nature, one shouldn’t be in sales of any form. This business has a tendency to reveal many ugly truths about human beings.
There was one comment about realtors being morons. Let me touch on that. There are certainly agents that are idiots, however those are the ones who don’t make any money. Indeed about 15% of the agents make about 90% of the money. The barrier for entry is low for sure, however many people come into the business from all walks of life because they can’t make enough money in their chosen profession. I’ve seen attorneys, dentists, PhD’s, MBAs, drug addicts, prostitutes, teachers, waiters, and business execs lured into the business by the promise of big commissions and a self-determinate lifestyle. There is no guarantee of success in this business, no matter what level of education or intelligence.
I know of one gentleman that was a retired CEO from a huge company in India. He had all the degrees and his resume was surreal. He sat in the office and sold no homes. He wanted to do it. He took the time to get the license. He couldn’t solve the riddle. There is no class that you can take that will teach you to succeed in this business. A degree from Harvard is a guarantee for success for everywhere in the world, except in general real estate. Imagine how he felt when a girl half his age in our office with a high school education was giving him leads that she didn’t want to work. He could run circles around everybody on an IQ test, but he couldn’t make a living for himself in real estate.
Back to the point. So can a realtor be trusted? Yes. They most likely won’t do anything to jeopardize their license or freedom, because that wouldn’t act in their own self interests. So fradulent behavior is unlikely to be encountered. Can an agent be trusted in negotiation of a deal? This begs the question: Can an agent act on behalf of a client in the first place? No…the client is the ultimate decision maker. In reality the agent on the buying side can only present an offer to the seller. The seller will then base a yes/no or a counter decision on the merits of the offer. However if a buyer is getting a loan…the bank then becomes the ultimate decision maker (at least for the buyer). They will make a loan based on what they feel the home is worth (appraised value), and they will require an inspection, and they might even require some repairs that were never part of the deal in the first place. Can an agent be trusted to want to get a deal done for a commission? Of course….who likes to work for free. Imagine a world where agents were on salary to get homes sold. Homes would sit, deadlines would come and go, buyers would be eager to look at homes but not during lunch cause that’s when the agent wouldn’t be available. Never on the weekends nor at night. Memorial day? Forget about it that’s a holiday. Want information on properties? Want to talk about the latest trends in the area? In the salaried world of home sales how good would that information be? Instead of staying abreast of the best deals in the area, they would be busy chatting on MSN, Facebooking, or hanging out by the water cooler. So I suppose the business has evolved as it has for a reason. The process of unlocking the equity in a home allowing the seller to move and pursue other interests has value. The process of helping a person foreign to a new environment find a home to suit their needs has value. One person has the home, the other has the money, and in between are the agents that really are the lubricant for the deal and the two sometimes irrational parties. Sometimes the opposing interests are close enough to get a deal done, sometimes the interests are too far apart and the deal doesn’t get done. This value is paid for in the form of a commission. The commission is earned throughout the process, put only paid at closing.
Some agents utilize certain “canned” arguments to get their clients past their own greed or irrational sense of competition. For example: If a deal is stuck over a $200k house because my buyer and seller are $500 apart (yes this nonsense happens all the time), would I be considered untrustworthy because I try to convince my client to pay $500 more? Or split the difference $250? Or four ways at $125 (me and the seller’s agent would kick in)?Why is the last $500 all the money in the world? That’s irrational and that is how deals come together or fall apart. So if I try to get my client to see the big picture and pay a little more (.25% more in this case) and this make me untrustworthy, then in this instance I am guilty as charged.
In the end there is more to life than looking for houses and buying real estate. It’s important to realize this. Most of us have completely forgot about the $2000 spent 8 years ago. So if somebody pays $150k as opposed to $145k, on a cosmic scale will it really matter? Or likewise if I sell my house for $145k and I wanted $150k, will I really care 40 years from now when I am sitting in a nursing home drooling?
Most people understand this concept and they are easy to work with, however a small minority are greedy self centered and short sighted. They are pain in the ass. Yet do I indict the entire human race because of these fools? No…I let it go.
By the same token most agents are honest hardworking people, no better or worse than anyone in any other profession. However a small minority are greedy, self centered, and short sighted. So it is wrong to indict an entire profession because of these fools.
I am having a nightmare with the sell of my home. I bought this home which is a manufactured home on 3 acres of land. From a bank , It had gone into foreclourse (In Michigan) I have a buyer and we are under contract. I bought it with cash and paid a title Co to do a search. Now I find out there is liens against it from the owners (that were forecloursed on) Had nothing to do with the sell of my home. I did not know about the way these home are titled .My Realestate agent at that time (who is one of the largest in my area) claims he had no idea there would be any trouble with this down the road. There have been 2 different liens on this. This home was quick deeded to another Co which is the one I bought it from. I feel I need to go after the title Co however they say they did not know there was a home on the land so they think they are off the hook. They claim they only did the search on the land. This is a good size home and I don’t see how this could have happened. Does anyone out there know how to fix this. If I loose this sale I will not have any money to live on. I thought I was taking care of myself.
Please Help
You are in a pickle. Unfortunately this is not quite as rare as you think. My opinion is the title co is at fault and if you find something with a document on it that one of there representatives signed saying home and land then you got them. Never the less I hope you bought the title insurance. Now would be a good time to call them and see if you can get some money out of this. This process takes time but can be fixed. Let your buyer know it can be a month or two and beg them to go thru it with you. Good luck!
I am a Realtor. I’m very successful, sell 8-10 homes a month, and make great money. I’m honest, civil, I service my clients, and I treat them like family. The author of this article is a simpleton, a moron. He had a bad experience and he’s crying like a baby to the whole world. Boohoo! Grow some balls you idiotic child. Not every Realtor is a putz like you’re describing. People always downplay the value of a Realtor, our commissions, etc. If you only saw what we have to go through on a daily basis, you’ll be asking why we don’t charge 25% commissions.
I have been a Licensed Real Estate Agent since 2006 and this has to be the worst article I’ve ever read! It’s sad to see what some people are willing to write in order to sell a book. In every industry you have the bad and the good. Of course you need to sell to make your commission, but a good agent will show you current market conditions and recent sales in order to help you make a wise decision. “I haven’t been successful with an amazing track record by being dishonest.”
This is so poorly written it’s laughable (logic is obviously not his strong suit). I can’t even get myself upset over this generalization and slander of EVERY Realtor out there because frankly this guy deserves pity. Such a sad, pathetic, angry person. Bless his heart. 🙁
Our realtor makes his living off word-of-mouth (as I believe most do). His business lives or dies by the recommendations of others. I have a hard time believing they could all be as bad as this article suggests and still get clients.
I think what is more likely is that people believe that their viewing of some HGTV show or a conversation with a neighbor about some guy down the street who sold his house for major $ makes them an expert in the field. I have met way too many people with totally unrealistic ideas about the worth of their house or the value of a house they are interested in…then it becomes the realtor’s job to make the clients understand reality. But this article makes it seem like this is downfall to a realtor; I believe that this is their responsibility as the person you’ve hired to guide you through the process.