Gimmicks and How to Avoid Them

Real estate agents tend to get a bad rap. But let’s face it, there are unprofessional people in every line of work. That also means there are plenty of great real estate agents – the kind that will help you earn more money as a seller or get more for your investment as a buyer. The key is to find those agents when it’s time to buy or sell a home. Need a hint? Keep an eye out for these common real estate gimmicks…that may not have the best interests of the client in mind.

Real Estate Agent Gimmicks to Watch Out For

1. “I have a buyer for your home.”

Whether it’s delivered in a letter or by phone, this a common trick some real estate agents use to get their foot in the door with a potential home seller.

“When I first started in real estate, that was one of the first things we were taught,” says Carl Seier, a real estate agent with Sigmar MacKenzie Real Estate in Winnipeg. “They told us that there’s an agent out there who will have a buyer for that area, so technically you’re not lying. But that’s not the reason to hire a real estate agent. You want one with the best marketing plan.”

If a real estate agent really has a buyer for your home, he or she should arrive with an offer. Otherwise, that agent is probably just trying to get your attention – and your business. What you really want is an agent who’s willing to price your home competitively and market it to sell.

2. “This is definitely the property for you – but it probably won’t last.”

Good real estate agents don’t sell houses; they help buyers through the process of finding the best home they can afford. So, if you feel serious pressure from your agent to buy a particular house, something’s up.

“Agents want to make a sale. A lot of agents are living paycheck to paycheck, so the quicker they can close a buyer, the quicker they get paid,” Seier said.

Plus, in some provinces, agents may be looking to “double-end” a real estate deal. This happens when they represent both the seller and the buyer, and therefore cash in on both commissions. This isn’t necessarily a bad thing, but if an agent pressures you to buy one house over another, you should be wary.

3. “If your house doesn’t sell, I’ll buy it.”

Offering to buy an unsold house is another common tactic some real estate agents use. It isn’t dishonest (sellers will have to sign a contract with all the details), but while it may help agents attract more clients, it isn’t all it’s cracked up to be. The problem? The price you’ll get for the home in this case is much lower than list price – often as little as 85 percent of the home’s appraised value, Seier says.

“It’s not a reason to list your home. List your home because your agent has devised a thorough marketing plan,” Seier said.

4. “This price will get you a bidding war.”

A bidding war happens when buyers get competitive with each other while making offers on a property. This often drives the home’s price up well beyond list price. This is an outcome many sellers (and, let’s face it, agents) fantasize about, but Seier cautions that it’s exceedingly rare. Plus, the strategy often involves listing the home for less than it’s worth, and that, says Seier, is a big risk to take.

“Agents are promising bidding wars, but when they don’t happen, the agent increases the home’s price. That’s the kiss of death,” Seier said. “Choose a list price you can actually live with, not one that might get bid up.”