Real estate agents have long been plagued by a reputation for dishonesty, but is this perception well founded?
It’s worth noting that real estate agents are trained to not tell outright lies to home buyers. There are all kinds of laws that are drilled into new agents to ensure they don’t land in hot water, and they soon build an extensive understanding of what they can and can’t say.
The key is that instead of lying, real estate agents perfect the art of not telling the whole truth. Here are five examples of deceptive behaviour that you may encounter as a first home buyer along with an explanation of what the agent may really be trying to achieve.
Discouraging inspections for new homes
Many newly-built homes are pushed to be sold under the logic that a recent construction does not require an inspection. After all, new buildings would automatically meet all standards and regulations, right? On the contrary, more than 50% of new homes fail our inspections due to all manner of shortfalls. Don’t be fooled—always get an inspection from a third party regardless of how new the building is.
Clouding your judgement with flashy interior design
Hopeful first time buyers are often lured in by agents who dress up an interior in order to distract you from the more important issues. While the use of décor is a great way to demonstrate what can be done with the space, it can also make you forget the essentials and overlook certain factors, such as a lack of renovations or poor upkeep over the years.
Encouraging offers before the auction
Another classic form of temptation: some agents encourage potential buyers to make an offer before an auction without any intention of telling the vendor to accept it. This tactic is used to force the buyer’s hand and show their intentions, allowing the auctioneer to be fully briefed on who has offered what. As a result, the buyer is effectively set up and loses a significant amount of negotiating power.
Quote it low, watch it go
“…quote it high, watch it die”. This industry saying refers to the practice of agents “low balling” an expected selling price to draw larger numbers to an auction. Hocking Stuart in Richmond was recently fined $330,000 after misleading house hunters by significant amounts in order to build audiences at upcoming auctions.
Been told that another buyer is interested in the same house? While there are certain laws pertaining to this area, real estate agents who are able to choose their words carefully can falsify this information and push you towards making an offer than you otherwise wouldn’t. It’s possible that there is another buyer, but keep in mind that the agent could be trying to take you for a ride.