CAUTION: Real Estate Agent’s Tricks
House hunting is a little bit like diving head first into deep water. When you are out there cruising around the property market as a buyer, we want you to keep one thing at the very top of your mind – you are swimming in shark infested waters.
And as a hopeful and well-intentioned home buyer, you most definitely are the prey, and it can be an intimidating place to navigate if you don’t know what to look out for. Not all agents are dodgy to be sure, but at the end of the day, apart at having their own interest at the forefront, their job is to ensure the property vendor gets a sale, and at the highest price they possibly can. A good portion of the time, an agent is willing to use every trick in the book to make that happen. With that said, we want to help you identify what those tricks might be, so you don’t go out there with high hopes, only to become fish food before you know it.
Here are eight tricks agents use to manipulate home buyers:
1. They make it hard to book a Building Inspector
When it comes time to book a building inspector, the agent will often suddenly become very busy and/or short staffed and you may have to use a degree of authority to encourage them. The reason for this is because the agent sees the inspector as being capable of putting-off the buyer — the last thing they want.
Don’t let them dissuade you from getting an inspection! A Pre Purchase Building Inspection from Building Masters is absolutely essential if you want to know that you’re getting what you pay for . . . and if an agent is making it difficult, this could mean it’s more crucial than ever.
2. They recommend their Building Inspector
Another common trick a sneaky agent might use is to try and suggest that you use their recommended building inspector — seems like a harmless and convenient option, right? Whatever you do, don’t take the bait. The inspector they recommend is likely to have an alliance with the agent . . . in other words, in return for on-going introductions by the agent, the inspector is required to produce “soft” reports so as not to deter the buyers! Some inspection groups are also known to offer other forms of incentives to agents, so you need to be careful.
This is the point where you need to think of these three simple words: Independent Building Inspector.
When you book a Pre Purchase Building Inspection with Building Masters, you can rest assured knowing that we work for you, and you only. We aren’t affiliated when any agents, so you can know for a fact that you’re getting a completely thorough, unbiased, and honest assessment of your future property.
3. Pre-auction offers
Sneaky agents that are looking to get a one up on potential buyers will sometimes suggest the vendor may accept a pre-auction offer. They use this tactic as a way to find out what the buyer is willing to pay. This trick is a good way to not only get a specific idea about what you may be prepared to bid, if the property did go to auction, but also and most often, the vendor and their agent actually had no intention of accepting a pre-action offer in the first place. But now that they know what you’re willing to pay, they have good incentive to take the property to auction, get a higher price for the property, and get themselves some free advertising all in one go.
4. Under-quoting
“Quote it low, watch it go – Quote it high, watch it die” – (Agents colloquial banter)
Under-quoting the price of a property is the perfect, although deceptive way for an agent to attract the interest of more people in order to get a higher price. By encouraging competition, the agent will get to see who has the deepest pockets. The poor buyer on the other hand, is also tricked into thinking they might get lucky when they could be budgeting for the lower end of the asking price, they then often become emotionally invested, spend time arranging finance, spend money on getting the home inspected, pay for a contract lawyer, only then to be left devastated when they’re outbid because in reality, they were never actually had a chance in the first place.
The only way to know the truth about a property is to have it looked over by seasoned professionals who can then give you a comprehensive assessment of the building’s ins and outs.
Want to learn more about this dodgy tactic? Take a read of our article: how real estate agents use under-quoting to cheat their way to the bank.
5. Stay vague on the price
This is when an agent will deliberately withhold the true value of a property in order to create competition. If you ask an agent what price they think the property might go for, and they don’t give you a straight answer, you can bet your sweet bippy that they know exactly what it’s worth, they just don’t want you to know. By getting yourself a pre purchase inspection, you won’t have to play the guessing game any longer — defect reports will give you a highly comprehensive breakdown of all potential issues that a property may or may not have along with their accompanying repair costs. This way you will know exactly what that true cost of a property is likely to be before making any big decisions. Click here to find out what information can be included in a Building Masters property inspection report.
6. They discredit good inspectors
Agents are also known to bad-mouth otherwise very good inspectors to buyers in an attempt to discredit the inspector. This is also a very useful way to dissuade buyers from receiving a potentially first-rate inspection, that uncovers the multitude of defects they were hoping you’d never find, until after they’ve finalised the sale of course.
If you ever come across an agent that has some nasty things to say about one building inspector or another, don’t take their word for it.
7. Inflate rental estimates
If you’re looking for a property investment and ask a sales agent what the property is likely to achieve on the rental market, a sneaky agent will usually inflate the rate. They could say for example that the apartment you’re looking at could get around $600 a week, when in reality the current tenants are only paying $510. Another thing to look out for here is if an agent offers you a “rental guarantee” — this should start ringing alarm bells; if the property is worth $X amount per week, why would it need a guarantee at all? Ask yourself, what is it that’s compelling this agent to offer a guarantee when the market should simply be operating as it does?
8. Using the fear of loss
AKA: FOMO (fear of missing out). This tactic is done by telling one potential buyer that there is also another interested buyer (or several) that are all just as keen on the property as you. This creates a sense of urgency which is used as a way to get you to react with your heart and not your head. Sure, there might actually be another buyer, but this could also be nothing more than a ruse. When the agent gets you emotionally invested and wrought with anxiety over the possibility that you could lose your chance, you are far more likely to empty your wallet and over-spend. This is an attempt to coerce you into securing the property at a higher price, when in actual fact, you could have simply paid the asking price all along, or possibly lower if the home was secretly harbouring defects.
At the end of the day, the main thing you need to remember is that the agent is not on your side. But we are.
Everything we do here at Building Masters Inspections revolves around empowering our clients. We want you to have all the facts you need to make the best possible decision in securing your next property, and ensure you don’t get stuck with a lemon that ends up making you poorer, rather than what a good property should do – make you richer.
So don’t fall prey to an agent’s tricks!
Give us a call on 1300 033 332 to set up an inspection today