Ideally, you’d like your real estate agent to be as straightforward with you as possible. The operative word here, is ‘ideally’. While a majority of agents are usually pretty transparent in their dealings with clients, there are some things they simply don’t or won’t disclose. Call it ‘trade secrets’ or simply a ploy for making more money, let’s take a look at a few things your real estate agent isn’t disclosing to you.
1. You could possibly make more money by selling your property yourself.
Why, you ask? Well, if you have a good enough property, you probably don’t need too much help to find a buyer. And, you don’t have to pay the 4-6% commission that you would otherwise be paying your real estate agent. It might take slightly longer to make the sale, but you could end up pocketing more money from the deal.
2. They may not know what the right asking price is for your property.
If the agent you’re hiring is unfamiliar with the territory your property is located in, they might not know what the proper selling prices are. In such a case, they will usually look at recent sale prices and market trends to guess what the right price may be. The good agents will contact their colleagues in the area to get a handle on what the right price might be. In the odd case that they don’t know what it is, your agent probably won’t tell you?
3. You don’t know how much information the agents are conveying to your buyers.
If you’ve ever heard your agent talk about what the agent representing the buyer thinks, or how much they really love your house, you should be careful. Most times, agents talk to the clients to smooth the deal over. But in the odd scenario that both agents are in cahoots to get the sale finalized, they may have reason to reveal more information about you than they normally would.
4. Open houses might be helping the agent more than they help you.
Open houses are great for showing prospective buyers your property. Here’s the catch though – a lot of agents will use open houses to meet new clients.
Sure, a prospect may not be interested in your house. But guess who just suggested them a few other properties in the area that will be just to their liking? That’s right – your agent.
5. Commission rates can be adjusted.
If any agent has ever told you that they’ll charge a certain amount as commission, only to lower it slightly when they see the amount of interest in your property, you’ve seen this principle in action. Commissions are negotiable, and although you don’t want to haggle too much with your agent, you can always get them to lower their original fees.
6. You could have made more money on your sale.
There’s a very interesting passage in the fantastic book Freakonomics which explains how real estate agents sell their own houses for a higher profit than their clients make. This is because even though you (and your agent) makes more money if they hold out for better offers, the amount of extra money the agent makes simply isn’t worth the time the sale is delayed. This is why agents encourage their clients to accept offers sooner rather than later.
7. They could land a double commission on your sale.
If you and your buyer don’t have representation, your agent might swoop in to negotiate the deal and land not one, but two commissions. While this practice is generally frowned upon in the estate agent community, you might run across the odd unethical agent in your dealings.
8. They might not assess your property correctly.
Most agents have a fair idea of what a house might be worth when they take a look at it. However, if the seller is very enthusiastic about a certain price point, the agent could go along with it just to retain their services. In addition, some of them might even advise the inspector to trump up the sale price by ignoring certain problems. Be wary of agents who appear too agreeable with your opinions.
In summation, it’s better to be informed when heading into uncharted waters, especially if you are new to the real estate business. If you run into a less-than-ideal real estate agent, you are now better equipped to identify them for what they are.