Real Estate Reveals Dirty Tricks Of The Trade

Overvaluing A Property

Image Source / Shropshire LiveIt's a common tactic for an agent to give a very high valuation on a potential client's home, in order to try and sway them to choose them as their agent. If other agents are giving a less inflated, more realistic valuation, it looks less money in comparison.

And Then Advising To Lower The Asking Price Later!

Image Source / WikipediaObviously after giving a value that's far too high, they can't keep up with that pretence, so down the line, when the client is deeper into the selling pool, the agent will advise the client to lower the asking price on the property. That way it just looks like professional advice rather than trying to fix their earlier high valuation!

They May Even Fake A Low Offer

Image Source / FoxtonsObviously a seller is going to be confused if an agent advises to lower the asking price if there haven't been any offers, so the agent might even make up a low offer from an "interested buyer" which comes in less than the asking price, in order for the seller to begin thinking that it might be worth less!

The Seller Is Then More Likely To Accept A Low Offer

Image Source / Property Press OnlineThrough creating these fake low offers and advising the seller to lower the original high asking price, they're making sure the seller's expectations are more aligned to what the agent wants, meaning the seller is now more likely to think about readily accepting offers lower than the asking price!

It's A Good Idea To Get Valuations From A Few Different Agents

Image Source / BankrateFor this reason, it's always a good idea to get a few different valuations from 3, maybe 4, agents when you're first looking to sell, so that you can compare the valuations. If they're all coming out at the same type of valuation, you know it's fair, rather than one extremely high one that's different to the other 3.

But Another Dirty Trick Could Be To Undervalue Your Property Instead

Image Source / Pure Property Finance

One of the reasons that an agent might undervalue your property is because they know someone who would buy the property, such as a friend, workmate or family member. If they value it low, they're doing so knowing the type of price their friend wants to pay.

This Is More Likely To Happen If A Seller Really Trusts The Agent, Too

Image Source / HomeOwners AllianceIt's a sad fact that it can be a huge breach of trust when a property is undervalued. When a seller really trusts an agent, they're likely to go with whatever price they're advising instead of looking for other agents' valuations. That means an agent can more likely get away with valuing at a low price and having the seller simply accept it based on trust.

Lying About Houses They've Previously Sold

Image Source / Ready Steady SellAs a seller, you are more likely to trust an agent who appears to have a great track record for selling houses, of course. Which means they're more likely to lie about success they've had on previous properties in order to build trust or make you want to pick them.

Especially If The Houses Are In Your Area

Image Source / Outdoor LED AdvertisingThis is more likely to happen regarding properties in your area. An agent might claim that they've just recently sold the house on the same street as yours for an impressively high price - which will make you think that they can do the same for yours, too.

Which Is Why It's Always A Good Idea To Price Check Properties

Image Source / HousingTo make sure you understand the price properties in your area are being sold for - and because you can't always trust the word of an agent - you can always do your own research online for checking house prices. Many sites will show you previously sold properties and the price they sold for.

They Try To Make Your Agency Agreement As Long As Possible

Image Source / SitemateAn agent is going to want to tie you and your property in with them for as long as possible, so they have more time to keep you and try to make money. A lot of the time, a default agreement will be at least 6 months or longer, but it's always possible to negotiate the length of time for less. 6 months is a long time, especially if your agent is performing badly within the first month.

You Should Start With An Agreement Of 3 Months

Image Source / Dreamstime.comNegotiating the agreement to 3 months initially instead is a good idea, because it's a decent amount of time to understand how your agent is succeeding with your property and how you feel about them. If you're happy, you can always extend after 3 months.

Charging A Standard Fee Rate - When It Could Be Too Much

Image Source / Marxist.comAs is always the way with pesky fees and commission charges, if you don't say anything about it or challenge it, you're going to get charged their standard rate (which is usually around 2% or 3%). Your agent isn't going to bring this up if you don't mention it, so remember that you can try to negotiate it and have it reduced.

Claiming These Fees Are 'Fixed'

Image Source / Business InsiderAnd that's the thing with these type of fees, too. Most of them will be labelled as 'fixed' fees, which obviously makes you think there is no room for negotiation and a lot of people end up paying what they're told. But fixed doesn't always mean fixed - but the agent isn't going to tell you that!

They Won't Tell You The Tax Terms

Image Source / Quality Company FormationsAn estate agent will always have their own commission rate that they'll explain to you - but they might helpfully forget to mention that the quoted price doesn't include tax. So you'll end up paying more on top of what they've told you in the end. So always check about that before signing anything!

Making A Sense Of Urgency Around A Property For Buyers

Image Source / Finance MonthlyEstate agents will make it their job to create competition and urgency around a property to get it sold faster. This isn't so much a problem for the seller, but for buyers it can be a struggle. Agents may speak with buyers in an urgent manner, making them feel pressure to put in offers or telling them there's a ton of interest and they need to be quick.

They'll Purposefully Book Viewings Close Together

Image Source / DomainAgents may set a viewing schedule so close together that potential buyers will see other potential buyers leaving the property, or arriving when they're leaving. This makes it look like there's competition and reminds the buyers that other people may snatch up the property.

And They Might Use 'Sealed Bids' To Create Pressure

Image Source / RightSurveySealed bids are when an anonymous offer on a property is given by a buyer. This is all about creating extra competition over a property, to pressure buyers into making a quick offer. The agent may even prompt the idea of sealed bids to create more urgency, or even push a buyer into making a higher offer.

They'll Try To Make You Pay For Extra Marketing

Image Source / R Whitley & CoIf your property has been on the market for a while and isn't garnering much interest, your agent may prompt you to pay for extra marketing. The problem with this is that they should already be doing everything they can to market your property, so why are they not? And what would they do differently if you paid even more for extra marketing?

They Might Pressure Buyers To Use Their Chosen Mortgage Broker

Image Source / The GuardianLots of agents get referral fees from particular brokers, which is why they really want you to go with the broker they know. They'll likely pressure you into it, and may even tell you that they won't pass on your offer to a seller if you don't go for the mortgage broker they're recommending - which of course isn't allowed!

Or They Might Imply They'll 'Do You A Favour' If You Choose Their Broker

Image Source / Mortgage SolutionsAnother tactic can be to imply that it would be in your best interests to choose their broker because if you do, they'll put a good word in with the seller and persuade them to accept your offer.

But It Could Be A Conflict Of Interest To Choose Their Broker

Image Source / home Property ManagementEven if you are considering the broker they're recommending, it might not be in your best interests to do so. If the agent and broker work closely together in-house, it's less of an impartial environment and may mean that they share information more readily about you and your finances.

They May Also Convince Sellers To Choose Buyers Using Their In-House Broker

Image Source / The TimesTheir manipulation with the broker situation also extends to sellers, too. If an agent is going to receive referral fees from their in-house broker being used, they may try to convince a seller to choose a buyer using their broker, rather than a buyer using an independent broker. This is in their best interest and not in the interest of the seller.

This Might Also Mean They're Encouraging A Seller To Accept A Lower Offer

Image Source / Norstrem AssociatesThe agent may readily convince a seller to accept a lower offer just to serve their own interests. If they're going to receive a referral fee from having their broker used, then they're going to try and push you to accept the offer which will get them that money - even if the offer is a lower one.

They'll Use Your Maximum Buying Amount As A Target

Image Source / Beehive MoneyA lot of agents will want to know the highest amount a buyer can afford for the property market when they're searching for a home. If you tell them, they may then use this as a target in order to make the most money, rather than trying to find you a good deal which doesn't reach your absolute maximum.

Showering Your Property With Compliments During Valuations

Image Source / WikipediaTo make it more likely that you'll choose an agent and have faith in your property, they'll probably arrive and tell you how amazing your property is, how it's a great, sought-after area and that they already know many people who would be interested. This could all be fake sales spiel.

Photoshopping Pictures To Make Properties Look Better

Image Source / CheezburgerOh yes, even property pictures get the filter treatment, too! In order to make properties look more desirable, agents may alter photos by photoshopping the environment - such as making it look nice and sunny rather than a grim rainy day - and also using a certain lens to make rooms appear a lot bigger than they are.

Discount And Incentive Schemes That Are A Bit Dodgy

Image Source / Joy of BusinessIn something as expensive as the property market, it's always great news to hear certain agents will give you discounts or incentives. But they're always probably dodgy or have some small print. Discounts may not be as straight-forward as they seem and may get swallowed up anyway in a huge house sale.