You might be making a costly assumption if you believe that criminal behaviour and other shenanigans by brokers and other investing professionals ended with the previous Great Recession. Real estate brokers are trustworthy and morally upright people. However, some might exaggerate certain aspects of their credentials, the worth and condition of a property, or the interest level.
Although the Wolf of Wall Street, Jordan Belfort and Ponzi schemer Bernie Madoff were imprisoned for financial crimes, several other broker frauds and misconducts go unchecked and unreported. It is crucial to research brokers or financial advisors before doing business with them, especially when spending a hefty amount on your property.
How to Determine if Your Broker Is Being Dishonest?
There are numerous things to watch out for when investing or renting real estate. The list also includes deceptive developers and hidden costs. First-time home buyers should be watchful for real estate salesperson deception.
One of the reasons the real estate sector occasionally gets a poor name is its propensity for distributing false information about a property. We’ve developed a list of the most common lies real estate salespeople tell to help you navigate the potential lies you may hear.
| Instances | What They Might Say | What To Do |
| Overquoting | A real estate agent gives you advice regarding a sale price. | Request the agent to ensure a suggested sale price range and support it with market data in pricing from nearby comparable properties. |
| Underquoting | A real estate agent could occasionally list a home for less than what you want to buy it for. It draws a sizable number of potential buyers. | Send a written offer roughly equal to the initial price if you want to purchase the home. |
| Multiple Offers | Brokers often quote other offers to induce potential purchasers to increase their first offer. | Inquire with the agent about sending a larger sum or the receipt for the house’s offered deposit. |
| Staging The House | Setting out furniture and accessories to enhance a home’s appeal to increase the cost of their advertising fees for the property. | Instead of hiding it with staging furniture and home décor, spend the money improving the house’s appearance post buying. |
| The Right Time To Invest | Brokers could convince you to make an offer on a home by praising the favourable buyer’s market. | Verify the real estate agent’s claim is supported by evidence. |
| The Fear Of Missing Out | The broker might pressure you to buy a property for high prices. | If they decide against accepting your best pricing offer, they don’t want to deal with your terms. |
What To Keep In Mind?
A real estate agent’s level of expertise, volume of listings, and area of expertise are crucial to examine when buying or selling a home. An unreliable real estate agent will exhibit several red flags listed below. Check the facts before choosing an agent since they can stretch the truth.
- Unreal Property Descriptions
Many real estate agents will use language that appeals to potential buyers as much as possible to sell a property they have listed, even if what they say is not factual. It is because they are paid when a deal is closed on a property. In some cases, when creating listings, agents merely use data collected from tax assessments without ever visiting the property. Avoid falling for the tried-and-true bait-and-switch.
- Unrealistic Buyers
Real estate brokers may claim that they already have the ideal buyer for a property lined up to persuade owners to sell it to them. Realtors are not required to divulge personal information about their clients. So, they are not obligated to reveal details about the client when inquired.
It is better to watch out for any hesitancy or unfavourable body language displayed by the agent when responding. Sometimes the ideal customer is too perfect and does not exist.
- Overvalued Real Estate
Homeowners want to maximise their profits when they sell their properties. Real estate agents may suggest inflated values to homes to obtain a listing, telling potential sellers that properties are worth far more than they are on the market. It is best to check the most recent sales prices of nearby homes comparable to those listed or get an appraisal to ascertain the appraised worth to see if the listing price provided by the realtor is reasonable.
- Unfamiliar With The Market Trends
It frequently coexists with inexperienced or part-time agents. You should hunt for a different realtor if the one you have is not knowledgeable about the local comps or similar home sales and cannot supply trustworthy information.
- Is Absent Or Late For Appointments
A series of scheduled events are involved in selling a home, and skipping one might delay or halt the process entirely. A major red flag of unreliability is if your broker regularly arrives late or skips showings, open houses, inspections, appraisals, or other events.
- Only Serves As A Messenger
Although there are many back-and-forth contacts during real estate transactions, a smart agent is more than just a messenger. A clue that your agent is not acting in your best interests or that they lack the skills or experience to do so is if they merely pass along information, explain what the buyer wants and ask for your permission without offering much assistance.
- Beware of the ‘One-size-fits-all’ Agents
The choice of a real estate agent is very subjective. Someone who perfectly fits the bill for one homeowner may fall very short for another. Your neighbourhood, home, budget, priorities, as well as your personality and communication preferences, should all be taken into consideration when making this hire. Look into their past performance to determine whether they can deliver on their claims. Do not settle for a substandard real estate agent by ignoring these warning flags.
- Make Some Inquiries
A straightforward web search using the broker and business name is the first thing that should be tried when looking into a financial professional. It could include discussions between clients offline or on online message boards, background checks, recent publications or media stories of alleged misbehaviour or disciplinary measures, and other details.
Summing Up
Not all real estate brokers are dishonest. However, several situations or property types could tempt brokers or middlemen to mislead you. When an agent lies, they want to sell a house quickly or collect a bigger commission than the typical agent. So, be on the lookout for any potential lies in these instances and be ready to see right through them. Before you feel pressured to submit an offer, take your time to investigate any claims they make regarding a property.
Can I trust my real estate agent?
It is uncommon to encounter a practising broker who is not licensed since there are many techniques to check brokers. However, a licensed broker can influence you to make investments more advantageous to them or their company than to you as a client. Additionally, they can use the funds in your accounts for their gain, such as gaining margin or shoring up their accounting records.
Is my money safe with the broker?
Though it is uncommon, brokers can undoubtedly be a risk to your money. Brokers can advise you to invest in real estate, profitable for them or that they wouldn’t make. They take risks with your funds. It is vital to check your bank statements often to ensure nothing is odd.
How can I find a reliable broker?
Look out for the investments the broker offers since it will determine if your investing demands will be met and how much commission you will pay. Examine the commissions linked with your selected investments carefully to see if the broker is trustworthy.
