Home > Blogs > Virginia > Richmond County > Richmond > The 10 Secrets Your Real Estate Agent Won't Tell You!
36,716 views

Barbara A. Reagan's Blog

By Barbara A. Reagan | Agent in 23233

The 10 Secrets Your Real Estate Agent Won't Tell You!

Tonight I logged onto my computer and one of the articles that popped up is an article by SmartMoney.com and in reading it, decided that I needed to respond to the items it discussed.  The article is entitled “The 10 Things Your Real Estate Broker Won’t Tell You” and in reading it, it makes it sound like all Realtors out there are useless, deceptive, sleazy, etc.  So as  a Realtor, I am taking exception to this article and am putting my thoughts about each of these 10 things here. 

 

Your Open House Is Really Just a Networking Party for Me!

The author says that whenever you hire a Realtor the first thing they do is suggest an open house so potential buyers can check out your house; but in reality, they are really looking to use your home to find a new pool of potential clients.  This is the reason that the Realtor is willing to give up a couple of hours for the weekend.  But open houses are good for other things:  someone who may have eliminated the house based on the MLS pics/description may stop by and find that the house is really what they want; a neighbor may see that the house may work for someone they know; a buyer who has seen the house before may come back with friends&family for a second look; a neighbor may be considering selling their home in the near future & you may gain some insight into your client’s future competition!

 

My Fees Are Negotiable

The implication here is that the commission is negotiable because all the agent will be doing is running a few ads, getting a contract & taking the home to closing.  And if they are helping the seller buy another house, well then, they have made more than enough money because they really didn’t do much on the buying end!  This is pretty far from the truth!  In this market today, it is taking a lot of time & effort to get the house to the closing table, and the Realtor that the seller uses is bringing their experience & expertise in all the issues facing the sellers in today’s market in order to get a transaction to the closing table!  There can be lender issues, appraisal issues, buyer remorse, inspection issues, and many other things that you may not have thought of!  Deciding on the agent you use to list your home simply on the basis of the commission may be penny wise & pound foolish!

 

Think You’ve Had No Offers Lately?  You’ve Actually Had Several!!!

Here the implication is that most Realtors will hold off on presenting any offers to the seller simply because the price offered is low (and therefore, will earn the Realtor less in commissions) or that they are waiting for one of their clients to decide to buy the house, so they can earn the full commission!  A good Realtor, who has made this business their full time profession, and even the good Realtors who are doing this part time, are not willing to throw away their reputation & license by violating the law to get a commission!  And ask yourself, if all Realtors are motivated to simply collect the most commission they can by holding off presenting lower offers or offers only from their clients!  The amount of commission a Realtor will receive on a slightly higher offer is not that much money, once it has been split with their broker!

 

I’m Not Obligated To Keep My Mouth Shut For You!!!

Here the author implies that if you call a Realtor on one of their listings, then that Realtor will not act in your best interests!  Very few Realtors I know act as Dual Agents.  But a Realtor who has a listing that the buyer decides not to make an offer on or pursue can represent the buyer on another house as a very good and ethical Buyer Agent!  The Realtor will be representing the buyer and not the seller and therefore, their confidences are kept. 

 

Sometimes I forget Who’s Side I am On!!!

Here the implication is that Realtors are only interested in getting the buyers onto contract, getting it to closing & to collect their commission, without regard to making sure the buyer has been adequately represented!  Most of the Realtors I know want to get future referrals – after all, we make our living by helping people get into homes and it will be years before they will, hopefully, be needing us to help them with a real estate transaction!  So we will want to make sure that our buyers & sellers are represented properly, and that the transaction is smooth!  We have a fiduciary responsibility to represent our clients, and most of us take that responsibility quite seriously!  I do agree that Dual Agency can be a very difficult and fine line to walk for many Realtors, which is why I don’t do it!  But as a Realtor who works for a large independent firm, whose firm represents both buyers and sellers, I do not believe that any of my buyers would feel that they have not had the proper & ethical representation in their transactions! 

 

I Know Zilch About Zoning!!!

Here the author seems to feel that Realtors will tell their clients anything & everything the client wants to hear-just to make the deal work!  We are not experts in zoning – if the buyer wants to do some improvement on the property they are purchasing, we Realtors should be the source of the source – we should be able to direct them to the proper departments & personnel to find out about zoning issues, but it is up to the buyers to find out if what they want to do after closing is doable!  If the Realtor tells a buyer that they can do something, I would hope that any of my buyers would ask where they can go to make sure that the county/city/township/association will allow them to do it!

 

I Won’t Let Termites – or Pesky Inspectors – Kill A Deal!!!

Does the author here really think that we will tell the inspectors what they can and can’t say to the buyer?  Again, as a Realtor who wants my buyers to refer me to their friends and family in the future, how many referrals does the author think I will get if I tell the inspector how much they should be telling my buyers about the property?  Very few, especially if the buyer discovered those defects after closing & could not figure out why they weren’t told about them.  Again, buyers should ask their Realtor for several home inspection companies, then talk to the inspectors to find out the scope of the inspection, ask what organizations they belong to, what their background is, ask for references – and then be there for the home inspection and follow the home inspector around as he does the inspection! A good Realtor will want you to have a true & accurate inspection done, even if this means that the current transaction you are involved in does not go to closing!

 

I Sometimes Forget I’m Not A Lawyer

The implication here is that many Realtors practice law when they shouldn’t be, and therefore, they are putting their clients into liability situations.  As a buyer or seller, you should always keep in mind that your Realtor is not a lawyer.  Most good Realtors have real estate attorneys that they can go to and ask a question on how to word something in an addendum, if needed.  State law prevents us from giving legal advice.  A buyer always has the right to have a real estate attorney review their contract, and if you are more comfortable having an attorney review the contract and addendum, then you should definitely do this.  And if you will be consulting with an attorney, make sure it is a real estate attorney in your state, since a real estate attorney will be versed in your state’s laws, which vary from state to state! 

 

My Website Is A Dead End!!!

Here is one paragraph that I actually agree with the article on!  Basically this paragraph says that most sellers assume that if the broker has a website that this is all that is needed to help sell their home!  But the article does say that sellers should look beyond the well designed home page and to look at the inventory that is showing up on the website to make sure that the inventory that is being advertised here is current and active and does not include a lot of listings that have actually sold but are still showing as active. 

 

You Can Probably Do This Without Me!!!

This paragraph implies that the broker & their commission gets in the way of sellers getting their home sold!  The article that was on line had a date of just a few days ago, so I am not sure when this was written!  But if you are doing this on your own, in the real estate market of July 2009, here are some questions you should ask yourself before embarking on this:  are you going to work with a Buyer Agent & pay them a commission?  How will you know about any price reductions on your competition or any new listings that will impact your home?  How will you handle any appraisal issues?  Will you be available to show your home whenever a buyer wants to see the home?  Will a buyer feel comfortable with you following behind them while they are opening up your closets & drawers?  Will you be able to stay on top of the lender and any issues that come up with the lender?  What about inspection issues?  Will you be able to handle buyers who decide to hard negotiate with you on the price, terms & inspections?  What happens if the buyer has buyer remorse?  Yes, you could do it by yourself and save some money, but calculating your time & effort and any costs you may have to incur to have an attorney review the contracts to make sure you are protected you may end up not saving yourself money!  A Realtor who does this for a living may be able to hold together your transaction if things start to get difficult as you progress along towards settlement!

 

As you can see, I do disagree with the viewpoint of this article!  I am not so naïve as to believe that there are not unethical Realtors out there, but I do believe that those Realtors are in the minority and not the majority.  As a full time Realtor who has chose to remain a full time Realtor in a slowing market, I take pride in my profession and always try to hold myself up to a higher level of service!  As in any profession, there are Realtors who may take short cuts, or who may not be as ethical as most of us are, or who may only do what is necessary to collect a commission at the end of the transaction.  But this article makes it sound like all Realtors are somewhere below the used car salesman, and I would totally disagree with their assessment of my profession and am disappointed that a magazine like Smart Money would make generalizations based only on a few interviews! 

Comments

By Chantal Konicek,  Sun Jul 12 2009, 19:34
From another full time Realtor who has done this for a long time - and works purely off my client's referrals, I applaud your clarifications. You are right on the money in each area and it is very unfortunate that anyone would believe or present anything otherwise. There are good, bad, and ugly in every profession. But, we are blessed with an industry that is, in my experience, mostly good, ethical, professional, and in this market, extremely strong.
By Susan Fisher,  Sun Jul 12 2009, 19:45
Barbara,

Thanks for jumping in and responding to this article. I completely concur with your views. We are all striving to provide the best possible service to our clients in a challenging market. I strongly believe now is the time to call on your professional realtor - we are here for you!

Susan Fisher
Associate Broker
Coldwell Banker Johnson & Thomas
804-338-3378
By Leasing To Own Solutions,  Sun Jul 12 2009, 21:13
I have to say that I loved the article from SmartMoney.com!

As a former agent, I had seen wayyyyyy too much of what was mentioned in the article. In fact, our area of South Carolina and the local MLS have been dubbed (some "not so nice" names that I can't write on Trulia). I got to the point where I was embarrassed to be part of the National Association of Realtors and our Local Association. Yes....there are quality Real Estate Agents out there but I truly believe that there NEEDS to be a more stringent qualification process to get a license, as well as ADDITIONAL monitors to look over the ethics of Agents.

I now try to educate and assist homeowners in getting their house sold in ways that Real Estate Agents "prefer" not to do. And the nice thing is that it's done without the commissions and fees and all the other "hidden" items mentioned in the article.

Many people are brainwashed to think the ONLY way to sell their home is to go right out and get a Real Estate Agent when in fact with a little education they can sell their house in many other ways and save some money at the same time.

Bravo SmartMoney!

Darin
By Barbara A. Reagan,  Mon Jul 13 2009, 13:09
Hello, everyone,

Thanks for the great comments! Darin, I read through your comments and I would hope that in your area of SC there were some honest and ethical Realtors that you knew helping clients, but I am curious as to how big a percentage of the Realtors in your MLS were practicing the things that were discussed in the Smart Money article - was it a large majority of the Realtors there? - if so, then I agree that this would have been a bad thing for the clients in your area; if it was only a small percentage of the Realtors in your area (say 5%), then this small percentage of Realtors should not give the whole profession a bad name! I cannot address your particular area, but I know that the majority of the Realtors I know in Richmond (both in my company and in other companies here) do try to work with their clients in an honest & ethical way, and this is my impression of the Realtors I have met from other parts of the country. I would be very curious about how you are helping sellers sell their homes in your area using "ways that Real Estate Agents prefer not to do". As a Realtor, if there is a way to help a seller sell their house quickly and for the most money they can get in this market, I am very happy to use the approach. So I would love to hear what some of the methods are that you are using in your area that is helping the sellers to sell their home.

Chantal & Susan: I would agree that we need to let people know that, although there are some dishonest people in the real estate industry, as in any other industry, the articles like that in Smart Money should be addressed so that people can see that not all Realtors are lower than used car salesmen! I do think that those of us who are full time and are in this business for the long haul and do a high percentage of our business from personal referrals must be doing something right, and I think that we need to let people know that!

Barbara Reagan
By Dan,  Wed Jul 15 2009, 12:00
From a buyer's perspective I thought the article was very relevant and true. Especially #5. When I lived in Utah my wife and decided to buy a home and we singed onto our own "buyer's agents" to represent us through the process. Twice we tried to put an offer on a home and twice we ran into a TON of animosity where our agent tried to force us into offering more than what we wanted to offer for the home. Ater that experience, we decided not to buy.
We now live in Virginia and started the process again. After being assured that our experience in Utah was one of those "bad apples" we started the process again with our new, well qualified, caring agent. After finding a home we love we sat down to write up the offer and sure enough, it felt like I was sitting across from a used car salesman being told not to even consider "low-balling" an offer. This on a home that was on the market for 8 months!! She even scoffed and threatened not to write up the offer if it was too low. At one point she even got belligerent letting me know how I need not tell her how to do her job!!! I did finally put in an offer and it was accepted but left the table wondering how much lower and how much more of a deal I could have gotten if I would have had a buyer's agents working for ME!!!
I know most of you will just say another "bad apple". But answer me this. If they're truly is buyer's representation how is it that so many people overpayed for houses the last 3 years?
Answer that question then you may be justified in complaining about the article.
By Barbara A. Reagan,  Wed Jul 15 2009, 12:25
Hello, Dan,

First of all, let me say that I am sorry that you have had two pretty bad experiences with agents in Utah & Virginia. I won't insult you by saying you just got stuck with "2 bad apples", but every agent is different from each other. I know that having had these experiences makes you think that all Realtors are like that. But I want to assure you they aren't. I know that I have had buyers who have wanted to find a deal - and in this market in particular they should be able to find a deal. When my buyers have found a home that they wish to purchase, the first thing we will do is to run a market analysis to see just how fairly priced the home is - sometimes the seller is asking just too much money! But assuming that the seller is asking a fair price, based on the most recent 3 months worth of comparable sales & even looking at the trend analysis we now have in our MLS system, I will advise my buyers what I think the fair price range for the house they are interested in is. At the end of the day, however, it is their decision as to what they want to offer. I have had many buyers who have offered what I would consider to be low ball offers, even offers which I thought a seller may find to be insulting. But the law requires that these offers be presented without any sort of commentary to the other agent on my part. If the listing agent makes a comment that they don't think the seller will accept such an offer, my response to them always is "present the offer and let me know how they want to respond & I will present it to my buyer to see how they would like to respond". My job is to advise, not to bully you into an offer that I think you should make. If you make a low offer & end up losing the house to someone who made a better offer, then that is what will happen.

You asked the question about what is the cause of what has been happening with the real estate market lately and why so many people overpaid for their homes. There are a number of reasons why this happened. Yes, many people did overpay for the homes, but many times this was a question of supply & demand. A seller, when listing their home, has a right to ask whatever they want for their homes. The Realtor who is listing the property can only advise what the right price is, but at the end it is the seller's property and they can ask for whatever they want for the house. Interest rates were very low at the time, lenders got very creative with the type of loans they were offering to buyers, lending standards were very relaxed and loans were very easy to get. This caused a lot of people to come into the market to buy homes. A house would go on the market, lots of people were out there looking for homes, and they would put in offers for the houses, no matter what the price was in many cases. If you had more than 1 buyer out there looking at a particular home, you could very easily be into a bidding war, many times with escalation clauses. Since loans were so easy to get and in many cases there was 100% financing, it didn't really matter what the buyer offered for the home. As I said before, our job has always been to advise. You say that you are upset that the agents you were working with was upset with your low offers? My answer to that was that our job is only to advise & at the end of the day, it is your call what you want to offer for the house. Well, in the hot sellers market, it was exactly the same thing. We could advise that the price someone wanted to offer was too high, or the loan they were trying to get was not the right one for them, or any number of things, but in the end, if the buyer wanted to buy that house and there were 4 other offers on it, all above the asking price (that a seller determined on their own to offer), then a buyer's agent can't not present that offer to the seller. Once that house closes, it now becomes a comparable sale for the next person who wants to sell their home, and of course, they will want to test the market to see if they can get an even higher price! There are many other things that went into the downturn of the real estate market.

I hope that I was able to answer some of your question and comments. I agree that there are always going to be agents and Realtors out there who may not do things in an ethical way. The next time you are thinking of buying a home, talk to friends and ask them who they used and what their thoughts were. Why not interview several agents and ask them for references! If you are not comfortable asking the Realtor to provide references, ask them for a list of their most recent sales and try contacting those people directly! Hopefully your next time buying a home will be a better experience.

Good luck to you!
By Leasing To Own Solutions,  Wed Jul 15 2009, 20:12
Barbara....

As a Private Investor, I use many different sites to search for homes to Purchase and Lease.

I would like to ONLY deal directly with the homeowner and to do so, I have to call or email the ads on these sites to try to contact the homeonwer. Unfortunately, I, on any given moment, can pull up hundreds of ads from Property Managers and Realtors who are advertising their listings or rentals without clearly disclosing their affiliation to a Brokerage. (Which is a violation of the Assoc of Realtors Code of Ethics) When I call them out on their mistake or deception, THEY get mad at ME....go figure.

It has gotten to a point where I and many of my Associates have to ASSUME that it IS a Realtor in disguise trying to advertise without disclosing or the fact that they have no idea of what is Ethical and what's not.

Forgive me for not sounding very Ra Ra about Real Estate Agents and the Industry but from my day-to-day business and what I learned when I actually had my license, Real Estate Agents and Used car salesmen now bring up the same image for me.

And as for how I go about buying/selling or helping homeowners buy/sell their homes....It's simple Owner Financing, Wrap-Around Mortgages, Assignments, or Subject-To Deals which most Agents have no concept of how to do and even if they did, they have sooooooooooo many disclaimers and disclosures that it would make their head spin. Reason = they've never been taught and/or don't make the effort to learn more techniques other than just "get-as-many-listings-as-possible-and-throw-them-on-the-MLS-in-hopes-a-buyer-with-25%-downpayment-and-700+ Credit-comes-along." Most of the times, the Realtor would have to wait to get paid their commission in the future which we both know is something Agents try to avoid at all costs.
By Barbara A. Reagan,  Thu Jul 16 2009, 19:22
Hello, Darin,

I read your comments and about how you search for property to purchase & lease. I understand your desire to deal directly with the owners, rather than having to use a Realtor. When you say that the Realtors are advertising their property & rentals without disclosing that they are a Realtor or their brokerage affiliation, if this is true, then you are correct that it is a violation of the Code of Ethics. I know that you have said that when you made these Realtors aware of this, that they got mad. Reading your comments leads me to believe that in your area this is a pretty widespread practice. I am curious, however, whether or not you have spoken to the Managing Brokers of the companies that these Realtors are affiliated with and what the Managing Brokers response to this practice has been. I am also curious as to whether you have reported these violations to the state agency that oversees the Realtors licenses. In the state of Virginia, we have the Department of Professional & Occupational Regulation and any violation of licensing law (which this would definitely fall under) is investigated by this department. They have the power to fine, censure, revoke licenses, suspend licenses, etc. And this is public record, so that anyone who is dealing with a particular Realtor can see whether that Realtor has violated the laws & what has happened with them. The local Board of Realtors should also be able to assist in taking care of that problem you seem to be experiencing in your area. I would think that if a Realtor is repeatedly reported to the state licensing agency and or Board of Realtors and is continually being fined, this would be some incentive to clean up the problem.

You also mentioned some of the techniques you use. I am aware of these techniques, although I will tell you that I personally do not employ these techniques. The sellers that I work with want their equity out of the house at the time of sale in order to purchase another home, and they do not want to have any liability in carrying a mortgage in the event that the buyer ends up defaulting on the loan and they have to take back the property and possibly do repairs. In many cases, my sellers are not in a position to be able to qualify for a loan on the next home that they are purchasing, as many of these sellers are move up buyers or they are downsizing. I do agree that these techniques can work for some sellers and buyers, but certainly not for all buyers.

I am very sorry to hear that you have a very low opinion of the Real Estate community in general and apparently, the real estate community in your area. Although I am a Realtor and therefore, am very proud of my profession, I am sorry that there have been some "bad apples" who have spoiled it for all of us, as most of us do try to work in an ethical and professional manner. I don't know that there is anything that I can say that would convince you otherwise. I wish you all the luck in the world in dealing with the unethical agents in your area. Hopefully, down the line you will meet some ethical and professional Realtors who will help you change your mind. Best of luck with your investing.

POST
 
Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer