Most real estate agents are reputable and hard-working, but some don’t always have a client’s best interests at heart.
Most real agents are reputable, honest and hardworking. They’re well-informed on the worth of your house, the state of the housing market and even the buyer’s frame of mind. Their knowledge is what makes an agent valuable to you.
But not everything an agent does is solely to the client’s benefits. There can be some self-interest built into real estate transactions. Here are five not-so-apparent facts about agents:
1. Agents aren’t obligated to show you homes.
Agents are under no obligation to show homes that might be of most interest to you. They are not obligated to show you everything that’s available. They may try to steer you toward homes that serve their purposes more, including ones that would be easier for them to sell, or that have been languishing on the market. They can be selective about what they show. That said, if you’ve signed contract with the agent, you can pinpoint the homes that you want to see.
2. Agents typically use the same home inspectors and mortgage brokers.
When it comes time for appraisals, home inspections, legal work and mortgages, agents tend to work with the same service providers. These supporting players are grateful for the repeat business, which means that their true loyalty may be to the agent — not to you.
That’s why you can’t always assume that a home inspection is as thorough as it should be. The outcome may depend on what best suits the agent’s needs. An agent’s inspector might accidently-on-purpose neglect to notice certain flaws and structural problems. It’s best for consumers to read the reports that these individuals submit and conduct their own due digilance.
3. Agents are motivated to sell your house, ASAP.
It may be in an agent’s interest to move your house as quickly as possible without waiting for a better price. That extra $10,000 on the selling price may make a big difference to you, but the additional commission your agent earns is negligible.
That means your agent may encourage you to settle for a lower price, sometimes using fear as a tactic. He or she might, for example, might suggest that housing prices are poised to fall and that it would be best to take the latest offer. The reality might be different.
However, studies have shown that when real estate agents sell their own property, they keep their house on the market an average of 10 days longer and sell it for an extra 3%.
4. Agents often downplay the cost of repairs or renovations.
As noted above, agents are motivated to close a deal as quickly as possible. If you’re a prospective buyer and you notice certain aspects of the house are amiss, some agents may try to minimize the cost of rectifying the problems. Don’t be shy about challenging them and verifying what they say. Conduct research to see what the repairs or renovations will cost.
5. Agents sometimes play bait-and-switch when estimating the value of your home.
When initially evaluating the worth of your home, some agents may feed you an inflated figure. Subsequently, once they have you on the hook and your home is not selling at the inflated price, they’ll start to persuade you to lower the price. These agents may have known that this was invitable. They knew what the home would fetch all along. Conduct your own research based on sales of similar homes in the same community.
Do Your Homework
When you’re selling your house, don’t leave yourself vulnerable. Remember, only you can make the final decision to sell or buy. If you don’t think your agent has your best interests at heart, do your homework.
Also, don’t be shy about negotiating an agent’s commission. You might be surprised at how much leverage you have in getting an agent to come down in compensation — even a percentage point.
For most people, their home is their biggest asset. When selling or buying a home, don’t leave anything to faith and chance. Look beyond an agent’s assurances.