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How Come Buyers Pay More And Sellers Get Less Or How To Avoid
Realtors' Dirty Tr
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By Amit Laufer
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Like in many professions and occupations there are honest andethical people and there are some who aren't. Since thecommissions of the Real Estate Agent are being paid by theseller of the house a buyer cannot relay on his objectivity orimpartial conduct, exactly as since without a buyer there is nodeal, the seller can expect the agent to exert pressure to lowerthe selling price.
In short, the agents' main interest is to make sure that therewould be a sale, so he would be able to get his commission,therefore he would do anything in his power to make the buyerpay more than he wanted and on the other hand (the good hand:-), push the seller to settle for less than he hoped to be paidfor his property.
In general it make sense to bring both sides to agree onrealistic price that can cut a deal, what we would concentratehere though, is the unethical dirty tricks and manipulationssome of the Real Estate Agents are using in order to achieve it.
Misconduct of Agents to Seller
The sellers are the biggest losers from the real estate agentstricks.
- Home owners are often duped into paying money to agents beforetheir homes are sold. If their home does not sell, or it sellsfor less than the consumer was led to believe, this money, whichoften amounts to thousands of dollars, is lost.
- The main purpose of advertising is NOT to sell homes, but to
raise the profile of agents, this is at the direct expense of
home sellers.
- The payment of kickbacks from newspapers to agents can be ashigh as forty percent. This rebate or credit is rarely passed onto the home seller. It is kept by the agent.
- Home Owners lose millions through having their homes undersoldat auctions. Home sellers are being convinced by a rational thatthe price goes up at auctions.
But the reason the price goes up at auction is because it startsat a very low price. The truth is that auctions get lower pricesmore often than they get higher prices.
Among agents, an auction is considered the fastest and bestconditioning method.
-False and misleading offers, Many agents submit offers tosellers which are lower than the offer actually made by thebuyers. This is done to make the genuine offer look good when itis revealed later. It is a common deceit. At other times, homesellers are given totally fictitious offers in order to convincethem to lower prices.
- Home sellers lose a lot of money when agents use 'bait' pricesto attract buyers. Agents indicate to homebuyers that homes maysell for a low price when they know very well that the homesellers would never want such prices. Agents say this isdesigned to attract buyers who can then be talked up in price.This ploy backfires on home sellers because it attracts manybuyers who can only afford the low price. The agents then say tothe sellers that "this is the most the buyers will pay." Thetruth is that the wrong buyers have been attracted.
- Open Inspections, Almost anyone can walk through a family homewithout identification. This reckless disregard for the personalsafety of home-owners is a serious ethical concern. Also, themore 'lookers' who can be attracted to an open inspection theeasier it is to persuade the owner to reduce the price. Agentswill say that there has been "lots of activity" and, if no onehas bought, the price must be lowered. But agents do not saythat the people who looked were not qualified buyers.
-Betrayal of Confidence, Many agents are quick to betray theconfidence of home sellers. If the home seller is ill or goingthrough a divorce or has financial problems, this highlysensitive information is often given to buyers. One real estatetrainer openly boasts that he "loves divorces" and encouragesagents to exploit this emotional trauma. The personal details ofhome sellers should never be revealed. Home owners are advisedhere to keep their personal problems to themselves or in otherwords "take the fifth amendment".
How Real Estate Agents Manipulate Buyers
-Untruths, They deliberately telling lies about the likelyselling price of a property causes enormous emotional stress tohomebuyers. Buyers are often given false hope about the price ahome may sell for. They get their hearts set on homes which theyhave little or no chance of affording. Buyers are often used aspawns to persuade owners to reduce prices.
-Apathy, The treatment given to many homebuyers is oftenflippant. Many buyers are stunned at the almost complete lack ofinterest shown by real estate agents when they make an enquiry.
-Showing Setup Properties, The agent begins the tour by showingto the potential buyer few run-down houses, in contrast to thesefirst impressions even the medium quality homes he shows himlater on looks pretty nice. This trick is based on a well knownpsychological principle of "Relative Perceptual Contrast".
-Reveal Information, By law the seller's real estate agent has afiduciary responsibility to the seller, and they WILL tell theseller everything you say, so pretend you are under policeinterrogation. The first thing the agent will do is asking youhow high you are willing to go on the house. Don't fall for thistrick. Just give them the price you want to pay for the houseminus 6% - 7% and if they ask how high you are willing to go,tell them that's it.
-Needless expenses, when buyers are told that a home is withintheir price range, they often spend hundreds of dollars toobtain legal searches and building inspections. Later, when theydiscover that the home was never within their price range, theybecome emotionally upset and are often furious at having wastedmoney needlessly.
-Auctions, Buyers are often lured to auctions in the same waythat sellers are lured by deliberate misrepresentation of theprice Buyers are told that the price will be low. Sellers aretold that the price will be high. Great pressure is then appliedto both sides at the auction. The sellers are pressured toreduce their price and buyers are pressured to pay more thanthey can afford.
- Buyers are often led to believe they have bought a home, onlyto be told later that someone else has paid a higher price forit.
-Investment Advice, The statements made to buyers about theinvestment potential of real estate are often misleading. Someagents tell blatant untruths about the potential of real estate.For many agents, it is always the "right time to buy".
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