Whether you’re in the market to buy or sell property, it’s likely you’ve enlisted the help of a licensed real estate professional. In the United States alone, there are over three million agents whose insights and support can prove indispensable. These professionals possess in-depth knowledge of local markets, helping you navigate available properties while filtering out misleading listings. A dedicated agent genuinely focused on your needs can be well worth their commission.

However, not every licensed real estate professional embodies integrity or competence. Red flags may crop up clearly, but others can be far more discreet. While some strategies might not be illegal, they often skirt ethical lines and could have significant financial implications given the magnitude of real estate transactions. If you’re seeking a real estate expert for your next buy or sale, it is crucial to stay alert for these more subtle traps.

Questionable Recommendations

A common yet understated unethical practice among some agents is the promotion of dubious referrals. While it’s customary for agents to connect clients with mortgage brokers, home inspectors, and contractors, the situation becomes problematic if they insist on using their recommendations exclusively.

To safeguard yourself, seek alternative referrals for any necessary services, particularly mortgage brokers. Agents often have “preferred lenders” that may offer advantages, but remember, you are never obligated to choose them. Collecting multiple quotes can reveal whether your agent’s suggestion is genuinely in your best interest.

Inflated Listing Prices

In the selling process, one of the most challenging decisions is selecting a real estate agent. Agents are driven by competition, and in an effort to win your business, some may resort to telling you exactly what you wish to hear: that your home is worth more than evaluations from other experts suggest.

This tactic is known as “buying a listing.” By promising inflated prices, they entrap you into a contract, knowing that when actual offers fall short, they can blame market fluctuations or specific property issues, leaving you reluctant to decline even subpar offers.

To navigate this pitfall, conduct your own research. Investigate the selling price range of properties similar to yours in the area, and be wary if an agent proposes a price significantly higher than the average.

Targeted Steering

Be vigilant if your real estate agent consistently shows you homes in certain neighborhoods while ignoring your stated preferences. This may be a practice referred to as “steering.”

Steering involves directing clients to particular areas based on characteristics such as race, religion, or gender. It can manifest subtly; you may find the properties within your budget and criteria yet always confined to similar neighborhoods. This can also indicate that your agent may dismiss your desire for homes in certain family-friendly zones merely based on their personal biases.

Signs of steering include unsolicited opinions from your agent about which demographics belong in certain properties and a pattern where your specific specifications are consistently overlooked.

Misclassifying Personal Property

If an agent offers to lower your future tax obligations through a reduced official price, you might think you’ve met a savvy real estate negotiator. This usually entails suggesting that a portion of the sales price be recorded as compensation for “personal property” rather than the home itself, thus artificially lowering the sale price and subsequent tax bills.

While acquiring items such as furniture or appliances in addition to the home is common, misrepresentation is illegal and fraught with repercussions.

Insufficient Marketing Efforts

When engaging a real estate agent to assist with selling your home, remember that their role spans beyond merely signing paperwork and showing the house. Effective marketing strategies should be a fundamental part of the service. Upon hiring an agent, they ought to provide a comprehensive marketing plan that includes advertising, online listings, staging, and possibly even virtual tours.

Some agents may package appealing promises while delivering minimal marketing efforts, saving them time and resources. They might secure a sale, yet their work ethic may not align with your expectations. It’s wise to incorporate the marketing strategy within your contract and monitor its execution closely.

Deceptive Listings

If your current agent captured your attention with a listing that seemed perfect and surprisingly affordable, only to inform you later that it has already been sold, you might have fallen prey to a bait listing.

Bait listings can be outdated properties that attracted initial interest, or they may be strategically misleading listings meant to draw potential buyers in. Once you engage with the agent, they reveal that the property is no longer available, promising instead to locate another home that fits your needs.

Off-Market Sales Strategy

If your agent implies that your property isn’t in prime condition and recommends selling it off-market without listing it on the Multiple Listing Service (MLS), be cautious. This might signal a connection they have with a property investor. Once you consent to this method due to the agent presenting renovations as too costly, the investor swoops in with an offer to buy the property as-is, leading you to a sale at a lower price. The investor later refurbishes and profits from the improvements—profits you could have realized yourself.

In such circumstances, the agent may benefit by earning commission from both your sale and the investor’s subsequent transaction. Scrutinize any suggestion to sell off-market and seek clarity on how it limits the number of potential buyers, while also obtaining estimates for any repairs to enhance your home’s appeal.

Fabricating Buyers

Beneath the surface, some unscrupulous agents may fabricate phantom buyers for their benefit. This can manifest in a couple of ways:

• As a seller: The agent might approach you claiming they have an interested buyer who is eager for properties like yours, pushing you to hire them. This so-called interested party often evaporates once the agent secures your business.
• As a buyer: If you express interest in a home, the agent may suddenly introduce another prospective buyer to pressure you into raising your offer. While it’s possible a genuine buyer exists, this tactic is manipulative and drives up the price along with their commission.

To guard against deceptive practices like ghost buyers, select your listing agent based on thorough research rather than the mere fact they initiated contact. Determine your budget in advance and commit to it to resist undue pressures.