Why You Can’t Trust Real Estate Agents When Buying A House

by Mike Holman

Most prospective house hunters or sellers think they have a “good” agent. Either it’s someone who they previously worked with or perhaps a referral from a friend or a co-worker. One of the big reasons for having confidence in their agent is a belief that the agent is “on their side” and “honest” etc etc. I would suggest however that by a certain point in the process, your agent is your enemy and you are negotiating against them more than the other party. This post deals with the buy side of the house buying game. The next post will deal with the sell side.

In the beginning: happy friends

When a house buyer first signs up with an agent, things are usually pretty rosy, the agent assures the person that they can find an appropriate house for a price you can afford and everything will be great. The agent has “lots” of experience and knows the area inside out. At this stage of the game, you and your agent are mostly on the same page. You want to buy a house and they want you to buy a house. Your agent will most certainly want to get the process over with sooner rather than later, but that’s usually the case with the buyer as well.

During the search: uneasy allies

Agents know that they need to spend a fair bit of time with a buyer, especially ones who want to look at a lot of houses. After a while however it’s not worth it for an agent to continue a long search especially if their contract is running out. This is the time when the agent will start trying to convince the buyer to lower their standards and raise their prices. Sometimes this is educational if the buyer has unrealistic expectation, but mainly this is to speed up the process so the agent can get paid. I should point out however that real agents are normally quite useful during the search since they often know more than you do about the general real estate and can get you access to private showings. The other big benefit is their access to sale price information for similar houses.

Related – How to win a house bidding war

Thinking about putting in an offer?  Trust no one!

The point when the buyer submits a offer on a house is a time when a lot of house buyers, particularly first timers feel out of their element and defer to their agent for advice. This is the worst thing you can do. Your agent gets paid when the deal gets done and only when it gets done.

This is a time when knowledge of the real estate market should be a big help in determining how much negotiation should be done. As well, if the buyer is not in a hurry to buy then that sets up a great negotiation opportunity. However if there is one thing that real estate agents don’t like it’s clients who negotiate hard – why? Because the only way to negotiate properly in a deal is to be able to walk away if the price you want isn’t met. The way an agent sees this type of situation is that if a deal falls through, they have to spend a lot more time looking at houses with you before they get paid.

Things that your agent might say (and you should ignore) when you are about to put in a bid are:

  • “Don’t bid too low or you will offend the sellers”. This is garbage – if the sellers can’t handle a low ball bid then they are unrealistic. And what exactly is a bid that is “too low”? I’m not saying put in an unrealistic bid, but don’t be afraid to start low and work your way up.  It’s important to know the market so that you don’t have to rely on the asking price or your agent to tell you the proper market value of the house.
  • “Don’t bid too low or you might offend the selling agent and might I have to work with them in the future”. This stunning example of gall and self-interest was actually told to Mr. Cheap. I don’t think this one needs any further comments. 🙂
  • “You should get a bid in quickly before someone else puts a bid in”. This is a favourite of my agent – create a sense of false urgency, get the deal in motion and get it done ASAP. Sometimes this is good advice, but other times – such as when the house has been sitting on the market for a month or longer then it’s just not appropriate.
  • “Someone else is looking at the house later today and they are really interested”. This lie usually originates with the selling agent, but smart buying agents are usually more than willing to play along because it will increase the chances of their buyer putting in an offer in that day.

Negotiation – don’t listen to a word your agent has to say.

At this point you are potentially pretty close to buying a house. You want to buy the house at the lowest price, the seller wants to sell the house to you at the highest price and your agent wants you to buy the house and doesn’t care at all what price you pay because they just want the deal done right now. Since paying a higher price will get the deal done quicker, a lot of agents will encourage you to bid higher which basically means that you are negotiating against them as well as the seller.

Things that your agent might say (and you should ignore) when you are negotiating are:

  • “Meet them halfway or in the middle”. This sounds quite reasonable at first- if the asking price of a house is $500,000 and you bid $460,000 and they come back with $490,000 then isn’t splitting the difference at $475,000 quite reasonable? Not if you can get the house for $470,000 or $465k,000 The fact is that the asking price of the house and your first bid are very arbitrary numbers and splitting the difference between the two might end up in a price that is not market value.
  • “Are you willing to lose this house for $2,000?” (or $5,000, $8,000) This is a tough one – on the one hand it seems silly to not buy a house and be only a half of a percent away from a deal, but on the other hand shouldn’t your agent be asking this question to the seller? Ie – “We are going to walk, do you really want to lose this deal for $2,000?”
  • “Are you willing to lose this house for $12 a month?”  This is part two of the previous point which is applied if you don’t bite on the first attempt. It’s also a more useful gambit if the “separation” is a bit greater. If you and the seller are $12,000 apart, that sounds pretty significant, but what if you are only $75 a month apart (for 25 years) or even better what if you are only $63/month apart (over 40 years). That doesn’t sound like much (even if it is).

Conclusion

The more you educate yourself about the real estate market you are looking in and how real estate agents operate, the better off you will be when buying a house. Real estate agents are quite useful because they can get you access to houses for sale and will often drive you around to look at them plus they have access to the sale price of other houses. Whatever you do, never forget that they get paid when the deal gets done and only then. They don’t get paid for showing you more houses or walking away from close deals.

Tune in tomorrow when we take a look at the trustworthiness of real estate agents when selling a house.

Take a look at another perspective on real estate agents that Mr. Cheap wrote.

Do you have any good “lines” that you were told when buying a house?

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{ 42 comments… read them below or add one }

1 Wright

If you are a home buyer and you are sincerely worried about the points made in this article, there is one way you can avoid all of negatives.

Simply hire a real estate agent as your Buyer’s Agent and pay the real estate agent for their time, effort, and professional services.

The amount of money you pay them is negotiable and it’s a value-for-value type of relationship.

The real estate agent is not working for free if you don’t buy anything and you can submit as many low-ball offers as your heart desires.

You can look at as many properties as you wish…10, 25, or 97 different properties.

Everyone is happy if it is a value-for-value type of relationship.

Why would anyone expect someone to work overtime for free?

The best thing to do is have a real estate agent show you a simple Buyer’s Agent agreement. You won’t be disappointed!

2 Renee

I had buyer’s agents for my first two home purchases and they might as well have been working for the seller. They did nothing to help me figure out the best price to offer and in fact pushed me to offer as close to list as possible, and balked when I asked them to ask the seller for any repairs. Told me I wouldn’t want to upset the sellers. For the second house, I was looking at possible home inspectors and the agent went ahead and brought in an inspector without my consent (of course, I had to pay him) who completely missed a huge plumbing problem that I had to pay to have fixed the day I moved in. And of course the agent did nothing to try to help me recoup the cost from the seller.

I’m looking at houses now for sale and I’m just calling the agent myself.

3 Anonymous

Mr. Holman, you should really check your facts and stop generalizing when it comes to an entire professional industry. I am realtor who takes great pride in helping my clients find the right home for their needs. I often tell my clients to keep looking if they are not sure about the homes they have seen and I am always honest in giving them advice. If this means they take a little longer to find the right home, then so be it. Don’t assume that all homebuyers have done their math or know what they should do in an offer situation. Many don’t know what to do and would be lost without a realtor to represent their interests. You should be ashamed for writing an article that attempts to tarnish the reputation of an entire industry. We should do the same for bloggers.

4 Teresa

I am so tired of hearing Realtors complain that they spend their own money on gas, lunches, time, etc. to show homes. In the end realtors get paid 2 1/5 to 3% commission on either end of the sale. The number of hours that you put in to sell the home or buy the home is not equal to the hourly rate you would be paid. Realtors will not spend 160 hours per month selling a home for 1 client. The hourly rate of realtors works out to be in most cases $1000 per hour. Sure you have some expenses but they are business tax deductible expenses. The rest of the working class pay our car expenses without a tax relief. Give me a break with your whining.

5 Paloma San Basilio

Most people who disagreed with article are -real estate agents. Figures!

And to the sellers that say he/she gets insulted by low offers because “that it’s my home”…well…it is YOUR home..but once you put your HOUSE ( an architectural structure for buyers) for sale, is only — BUSINESS. Nobody cares ( except you) how attached you are to your home or “how many memories you’ve created it in it” ( my kids grew up there, my daughter got married there, my dog died there and it’s buried in the backyard)
Boo-hoo hoo. Bring me out the violin !
Do you want to sell the structure ( house) or not?
In a business negotiation you have to omit your emotional feelings and either sell or not sell. If you get “offended” by what you consider low offers you are not ready to sell. Stay in the house and die there of old age. In the end, it’s just bricks and mortar to a buyer and the real estate agent. After you are dead whomever inherits it will sell it without consulting your “ghost” and will not care about “the memories you made there”.
There are still selling homes built in the 1770’s in the USA you think anywhere cares what the “ghosts” of the original owners think?
Wake up!—it’s a business deal. Not your kidneys for sale.

6 Peyton

This was a very interesting conversation. Im happy I ran onto it. Im purchasing my 5th home ( we move a lot due to our jobs) in the Dallas area.
All the agents I worked with while selling our homes were excellent.
I find a different situation while purchasing one though. Ive dropped 3 agents as of yesterday. I am in an urgent situation because my house sold fast and I’m in a small apt. All my house contents are in storage and costing 600.00 a month.
I haven’t had an agent yet that I feel is earning their money. I get a few homes for sale from their Portal, but when I send the list to the agent she says they are contingent or under contract. Someone is not keeping up their websites.
The homes they send are not what I asked for either. being 25,000 more than I wanted to pay etc…
I go out and look myself, if I see a house in a neighborhood I like I call the listing agent and have them show me the house. Ive bought two of my homes like this. I don’t feel an Agent should share in the profits if she or he didn’t find the property for me. I did the work.
I think the people that have shown they are human and are working in their clients best interest are right on! Money Mongers don’t seem to have any
Ethics. You have to be professional in any business, That involves Ethics.
If you do what is best for you and your client you have done the right thing for all concerned.

7 Susan

Called the number on the sign in front of the home I was interested in, the agent’s phone went to voice mail; so I left a message to see the house. The neighbor came over with a full set of keys, showed us the home, explained the history, etc. Finally after a week rec’d a return call from the realtor after I left several messages to see the home again, only to be told the lock box combination and help myself! Another week goes by, the realtor picks up my earnest money and emails me an agreement for purchase. This is in a very small town of less than 170 people and the home was built in 1925, which both are very appealing and exactly what we want. Now 3 weeks into this “agreement” and less than 2 weeks from closing, we still have not had any contact other than her picking up the earnest money and the email. We have asked via phone message and email to her in regards to the exterior and interior needs to be cared for before closing to make the move accessible [huge overgrown weeds, trees, etc. blocking the entrances] and 3 years of filth accumulated since last occupancy. To date, no response from the seller/buyer realtor. We find ourselves dealing with a very neglectful and disrespectful realtor from her lack of response and still have only the “neighbor’s” word as to our questions being answered. The inspector cannot inspect the house until the realtor allows him to, but the appraiser did the appraisal from the exterior only, which is incomplete. What do we do…we have sold our property and need to move in less than 2 weeks on the closing date. HELP!

8 ptc

Agents do not make money unless you buy. There are a lot of comments here that are angry at this persons advice, but the fact is- agents do not make money unless you buy. Both the selling and the buying agent want you to buy. The commission costs money, and that money comes from somewhere.

A selling agent can claim that a buying agent will save the buyers money. That is true if the buyer does not know the area in which they are buying. Often times, if buying in the same region, a buyer may know a lot more about some of the towns and neighborhoods than the buying agent.

What to do if you are in a tri state area and your agent is only licensed in one state, for example? What to do if your agent is great in town XYZDE, but knows very little about FGH, and you do?

The simple fact is, you pay agents for advice. It is true however, that they want you to buy.

Low ball/ insulting offer? Like 20% below asking is some kind of an insult? Uh.. any good sellers agent will tell their client to counter.

That is how it is done.

9 Ellen Wu

It depends on which market. When it is hugely seller’s market like San Francisco, it has only 5 weeks inventories, a 2 hours open house has over 400 visitors, a 1.5 hour brokers tour has 75 agents’ business cards, a reasonably priced house has 20-35 offers, single family house average days on market is 12 days, appreciation is 35%, 32%, 28%, 27%, 26%, 28% in past 6 years, offers usually bid 15%-35% up, buyers are having a really hard time to get their offers accepted. I represent sellers 95% of the time and have seen it too often that 90% of the buyers are priced out in this brutal competition. So, may be your advise can work for those undesirable or over priced houses. Not in hot market with good listings. Good luck to get your offer through.

10 Joeseph

I have had some good and some bad agents. I can tell you that a buyers agent does have a stake in you making a deal. They get paid when the deal is done, and that puts them in an odd position if it ever becomes time to stick with an offer or walk away.

My buyers current agent acts like a seller. He continually compliments properties when we look, and tried to pressure me into a timeline that I was not comfortable with. He has done a good job lining up showings, but that is about it. We have an offer in through him because of the work he has done, but if it falls through we are moving on. It is a great offer. 12% below asking price.

It is an odd situation, but over time, buyers agents start losing money if you work them and have a hard time finding the right place…

Which is to say, there is a lo of merit in what is being said in this article.

11 Ann

Was told the seller did not have the survey, paid for one & at the same time found out they actually had one.

12 Dave Maludzinski

These comments are hilarious! I am a buyer and seller of real estate having moved 11 times in my life. Over the years I have experienced several of the things mentioned in this article first hand [and a few more].

I never read anywhere in this article where the author states this is the case for ALL real estate agents so chill as it may or may not be about you. As a buyer, it is always good to remember the agent does not work for you.

13 Steven

I am currently selling my condo and spoke with a real estate friend who’s not my agent. He straight up said you cant trust any agent and I believe him 100% and here is the proof. There were 10 showings and only 1 agent privided feedback from their client. That agent only provided feedback because she was friends with my listing agent. From this we can come to the conclusion that all agents only care about themselves and it is in their best interest to do so. They must retain a certain level of reputation to continue business but they only look out for themselves in the end. It is in their best interest to do so. They are not on your side or any other agents side unless they are working together on the same deal. Do not trust them. 99% of agents will make you believe otherwise but you have to be smart and trust this. I work for a corporate real estate company, agents are not friends.

14 Rick

When my wife and I went looking to purchase a house, we had made an offer on a rancher that we were looking at. After a couple of back-and-forth negotiations, our buyers agent told us the deal was dead and for us to move on.

We asked to renegotiate one more time, and was told no.

Subsequently, we decided to contact the seller ourselves and negotiated our own deal.

We went back to the realtors and told them to cut the difference from their commissions, which they did.

I agree, with other realtors on this blog. There needs to be a method of getting rid of the bad realtors. Some, simply do not know how to negotiate

15 realtors r sharks

I am 2 weeks away from closing on my new home. We went thru a nightmare last year and had to settle for renting because it was November – 2 months of looking and because the realtor (who was family) just wanted a sale. We walk away rather than settle and the buyer won the negotiations but lost the sale.
So the last year has been spent renting – working and researching. And for the most part – like it says all was great in the beginning. Then came offer time – don’t bid too low because we don’t want to offend the seller. Haaa nail on the head. I responded with exactly what is written above. Then things went kind of ok we reached an agreement on price. Now repairs come creeping up. Our realtor screwed us! It took a complete 2 weeks for the sellers realtor to remove from the mls. The under contract sig. Was necer put up. The sold sign is still not up and i had a few buddies call the sellers realtor asking about the house and she took their info. She did not enforce anything – pretty much worked with the selling agent more than me and then hit us with this gem “the sellers realtor confided in me that they have a cash buyer.” As a result I was ready to walk till I remember reading one thing. Do I want to win the negotiations or buy the house. I spoke with my wife and we both agreed that as much as we felt she was full of shit. We just couldn’t take the additional stress.
My advice for future buyers. Sit with your agent before signing with her and share this and anything else of information you may have and let her now tthat you are very informed and will not accept any kind of BS tactics. Then study his/her response if there is 1 sign they are bullshitting you – walk away.

16 SJ

Thank you for this good article. I wish I had read it before purchasing our first home. I think our agent actually used all of these in addition to few of her own. We saw a house which was $25000 above our price range, where she asked us to put an offer anyways. We did. When seller’s agent negotiated, she used some of the line above to counter offer along with a proposal to refund $5000 to us as part of of the offer so we don’t actually go over budget.
We were over whelmed with her kindness. We refused to accept that but she said that she want nothing more than helping us get our dream home. As gullible first timer we agreed and made a counter offer with $5000 more, which according to her made our offer $10000 more than original. Alas we still didn’t get the house because of multiple offers. Then she told us to up our offer even more so that we beat all other offers as her $5000 concession will be added to whatever offer we make. We made an offer which according to us was only $7000 let than listing price. Guess whose offer got accepted. Apparently, seller’s agent wanted to work only with her.
Now at closing, there was no talk of $5000 concession. We did get that house with $12000 less than asking price. But only then we realized their was no concession, no multiple offers and no preference to our agent.
But we cannot do anything about it. In the guilt of accepting concession from our agent we took her for fancy dinner, bought breakfast/snack for her every-time we met. Afterall, she was giving away $5000 for our happiness. Today, we know we could have got this house for our original offer or any other house which was in our budget.
The concept of Buyer’s agent is a myth, there is no buyer’s agent. No one think about buyer’s interest. They only think about making a deal with highest price so they get highest commission.

17 Soultana

Don’t hire a Realtor to sell your home! In two years I sold Two of my homes, by my self! The Realtors are worthless now days. too hungry for money and will do everything possible to make your house look bad so you the owner will reduce your house to and sell it just to pay the Raltor and the property taxes.
FIRE YOUR REALTOR AT ONCE! SAVE MONEY FOR YOU!!

18 Aaron

For someone that is looking for their first home or real estate investment, like me, it is hard to trust others. Even Savvy professionals that claim they are on your side. As a fist time buyer its scary, especially when you are confronted by decisions that are truly difficult to make. Maybe the author has a point. Not all real estate agents are alike and not all are out for the customer. Be realistic, there are those who are seeking that next new buyer they can manipulate.
How about giving me advice as a new buyer? Where should I find a broker? Who should I trust? I am looking for an investment not a place to live, yet to rent. Is there a type of broker I should talk to?

19 Joby

I have used 3 agents, I have had to question things done or more often things not done by each of them. Historically, a real estate agent’s major advantage was knowledge of the market but with the internet the knowledge gap can be closed dramatically by a prepared buyer or seller. I will not use an agent ever again. If you are willing and capable of reading and understanding legal documents and doing the market research than there is no reason to pay their ridiculous commissions.

20 Terry Ballantyne

While much of what you say may be true in some cases, there are some successful ethical agents who do not NEED to sell a house and therefore are excellent negotiators. Find an agent who is successful. They are more objective.

21 simone frank

Maybe we got lucky but what the author says is patently untrue in our case. We ended up with a buyer’s agent in the same firm as the seller’s agent. From all appearances our buyers agent was very scrupulous in not communicating things we said to the seller’s agent. We were involved in a bidding war , and we put down our best and final. The next morning we definitely communicated to our buyers agent that we felt remorse… and wanted to go higher. We told her we would very happily pay 30,000 more, and we asked her if she could contact the seller’s agent to say this. This was a property that was 1.56 million duplex. We are going to live in half of it. We ended up getting the place for 1.56 million. Given that it was in-house, they could have come back to us and said the seller wants 1.59 million and we would happily given it. That would have upped the percentage that the agency gets– since they get both seller and buyer fees in house. They knew that. Also we got $20,000 on repairs that needed to be done. This seller ended up taking on the whole cost of a new roof and termite care. Our buyers agent suggested we push hard and negotiate on this. She said it is rare for the seller to pay 100% of a new roof, since one cannot expect a 60 year old property to not have some life already on its roof. And one half of the duplex had a brand new roof. Is hard to tell whether we are just naive but I don’t think so. There was a clear point where they could have easily taken us for more money, and they didnt. We had said we would happily pay. Who knows maybe the seller is not happy with his seller’s agent. But we were very happy with the outcome, and we felt like we were treated very well.

22 Chris M.

You are an absolute idiot. This has to be the dumbest thing I’ve ever read. It is so biased and incorrect on so many fronts I cannot even begin. You’ve clearly hired the wrong agents in the past and now think you’re some kind of real estate agent authority. What a joke.

23 g

I have to admit, I don’t have the time to read through the hundreds of comments. So perhaps this was already mentioned. But of course, what if the buyer wants to buy the first home they bought because they LOVE LOVE LOVE it, and the realtor encourages the buyer not to buy it, or not at that price. Or that the house was refinished, and thoroughly renovated but the realtor finds that there were no permits to be had. ANYWHERE. Just speaking from personal experience, and I’m not a realtor. Plus, when the deal can or does go sour, like say when the seller says she’s not moving out(!!), the realtor deals with that for you….

24 kathy

As a potential first-time buyer, I think his article made a lot of sense. Nothing happens until someone sells something! I’m sure most realtors are good, but the bottom line is they are only working for themselves – a sale is their salary. As I am just about to meet with realtors to shop houses, I wonder how many of these comments I will start hearing from them! It should be interesting. Obviously, that’s how they make their living and there’s nothing wrong with it, but he made some excellent points. A lot of the burden should be on the SELLER – “do you really want to lose the sale of your house over … $2000?!” GREAT POINT! Another thing I don’t understand is why the BUYER has to pay for home inspections and appraisals! Seems to me that if you wanted to sell your house, that should be the SELLER’S BURDEN!

25 OScar

Excellent article. I don’t know why all real estate agents here are getting offended. Is it because you’re saying the truth?

Knowledge is power. You don’t really need a realtor to buy a house if you dedicate some time to know the market and the real estate logistics. Anybody can be a realtor.

26 Shasay Mobay

Classic lines:
1) Buyer asks Agent reason why owner is selling old home built in 1970, after only two years of ownership… Agent responds “The owner is selling the house because of a job relocation (or new job relocation)”. NOT!
2) “Everything is negotiable, don’t worry” NOT!
3) Buyer asks Agent “Is this home sewer connected or septic tank, ’cause I really prefer a sewer connection?” Agent responds, “Now, THAT – I’m not quite sure but you can check all that out later, besides septic tanks have come a long way and they’ll save you a heck of a lot of money in added fees you would pay for a sewer connection.” NOT!
4) Buyer asks Agent, “In terms of your commission, how much or how does that work?” Agent responds, “Oh don’t concern yourself with all that, commissions are something the seller has to pay, not with you” NOT!
5) Buyer says to Connie, (her agent) “Connie, I wanted a larger bedroom area (space) and this is really small”. Agent responds, “Now, I know you wanted a spacious bedroom, but there are ways and designer tricks you could do by applying mirrored panels on the entire side of one wall or even two walls”. (or) “Looking outside the bedroom window to the back yard, you could easily hire a contractor to replace the window with a sliding glass panel door that would visually open up the bedroom space into your own a private concrete patio” (or)” if you’re a DIY person you could easily knock down the wall and replace it with a paneled sliding glass door, right?” NOT!
6) Agent to Buyer, “There’s talk that Interest rates are going to shoot way up this year and you might not get the home in the price range you’re looking for” NOT!
7) Buyer is hesitant in signing a purchase contract on a home that’s not really what buyer wanted and notices that seller’s name is not listed on the purchase contract instead lists ‘Owner of Record’. Agents responds “Making offers doesn’t necessarily mean you’re going to get the home. It’s best to make multiple offers on several homes with various purchase contracts, that way you won’t be disappointed if one doesn’t go through or two you have one that might. As far as not listing the owner of the property for sale is just a time saver and I’ll have my assistant do all that later before I present your offer” Do you want to guess this one? NOT!

27 Moe Jay Perry

Classic lines:
1) Buyer asks Agent reason why owner is selling old home built in 1970, after only two years of ownership… Agent responds “The owner is selling the house because of a job relocation (or new job relocation)”. NOT!
2) “Everything is negotiable, don’t worry” NOT!
3) Buyer asks Agent “Is this home sewer connected or septic tank, ’cause I really prefer a sewer connection?” Agent responds, “Now, THAT – I’m not quite sure but you can check all that out later, besides septic tanks have come a long way and they’ll save you a heck of a lot of money in added fees you would pay for a sewer connection.” NOT!
4) Buyer asks Agent, “In terms of your commission, how much or how does that work?” Agent responds, “Oh don’t concern yourself with all that, commissions are something the seller has to pay, not with you” NOT!
5) Buyer says to Connie, (her agent) “Connie, I wanted a larger bedroom area (space) and this is really small”. Agent responds, “Now, I know you wanted a spacious bedroom, but there are ways and designer tricks you could do by applying mirrored panels on the entire side of one wall or even two walls”. (or) “Looking outside the bedroom window to the back yard, you could easily hire a contractor to replace the window with a sliding glass panel door that would visually open up the bedroom space into your own private concrete patio” (or)” if you’re a DIY person you could easily knock down the wall and replace it with a paneled sliding glass door, right?” NOT!
6) Agent to Buyer, “There’s talk that Interest rates are going to shoot way up this year and you might not get the home in the price range you’re looking for” NOT!
7) Buyer is hesitant in signing a purchase contract on a home that’s not really what buyer wanted and notices that seller’s name is not listed on the purchase contract instead lists ‘Owner of Record’. Agent responds “Making multiple offers doesn’t necessarily mean you’re going to get all the sellers to agree and accept them, but it ensures more time for you to decide before someone else makes a bid and the seller accepts them.” Agent continues, “As far as not listing the owner of the property for sale, well…. it’s just a time saver and I’ll have my assistant do all that later before I present your offer” SIDE NOTE: Does anyone know why a Buyer’s agent would put “Owner of Record” in place of the full legal name of the actual owner of the property in the purchase contract and have the client sign it anyway? Mmm… NOT! This really happened but the client wasn’t that stupid and was advised by an attorney not to sign anything with missing information.

28 MD

So true! My agent tried every tactic to get me to pay more for my house than I thought was fair. I stuck to my guns and got the price I wanted. In hindsight, it was still too high because I dd fall for the “Don’t start too low, you will offend them” line. So many self serving agents out there that care nothing about their clients. The whole industry so unethical.

29 Varaia Roshon

I’m a buyer’s agent and I work with a franchise and yes on paper it says I get 2.5-3% commission but up to 50% will be given to my franchise and up to 10% of my half I give back to qualifying clients and 5% to a charity of their choice. Tell me again how many thousands I make an hour if I spend 200 hrs finding a client a home and only take home about $2000 at closing. If you think we do this for the money you’re right about $10 an hour right. You could hire a lawyer to process the paperwork involved in buying a home but I assure you their fees are quite a bit higher than anything you’d pay an agent.

30 Michaela

If you are not a realtor you have no idea what their job entails beyond opening doors for a buyer or sticking a for sale sign in a yard. Home buying and selling is legal in nature. In the old days lawyers used to perform these duties. Do you know what forms are legally required to be provided to a buyer or received from a seller? Do you know how to do a comparative market analysis to determine the proper valuation of a property? Do you know how much it costs to maintain a real estate license or how much the broker keeps out of a commission? There are disreputable people in all professions. What does everybody hate a lawyer until you need one? Is that really fair? Do you know all lawyers? One bad apple DOES NOT spoil the whole bunch. What do you do for a living? Should you be trusted?

31 Michael Karppe

Some of your points are valid, but not all real estate agents lie. Some are Veterans like me and believe in honor. The key to buying a home is having a realtor who partners with you, understands your needs, and guides you through the process early. Realtors who run clients around to dozens of homes does not understand his clients needs or the client doesn’t know what they want.

32 John Jackson

Excellent article. I wish I had read this before I bought this house.

33 Evonne

Every home owner has a value to their home that an REO doesn’t. Even the REO will only take 5% less than the asking price.
I believe most all real estate broker take great care in their fiduciary duties and the best thing they do for buyers is to negotiate who pays for what and the price.
The reason having a real estate broker compared to an independant buyer is the buyer will offer the asking price and not ask the seller to pay anything.

34 LuckyOz

The easiest way to avoid all these issues, is to always use the seller’s agent. The realtors are not responsible for any legal advice, paperwork is typically available online for most states, and available properties are available online.
As soon as you start negotiating hard with the seller’s agent, they become on your side, and pressure the seller into selling to you (double commission).

35 Sandra McDonald

Son 0f a gun! Amazing! I’ve heard every one of these comments, my agent even went so far as to tell me “there’s no negotiating the closing costs”, you get a better deal and faster sale having me for both the buyer and seller.
Most fee’s are 6% but I’ll do it for you at 4%.
Thanks for the eye opening advice! I fired her with my next phone call.

36 Tracy

This is so misinformed and poorly written. It is obviously a bait piece to garner attention. I believe it’s called trolling. Brave when behind the keyboard with anonymity and no facts. Couldn’t even finish reading it it was so poorly executed. Fluff

37 Tim Letts

Some of what is said here I believe is true in a lot of the cases, but not all. You can’t generalize the entire industry by summing up what an agent will do “absolutely”. As a REALTOR myself, I do see all aspects of the business, both good and ugly. Do a few bad apples spoil the bunch? Pretty much in this case, yes. You can easily see that our industry does have a lot of negativity pointed at us because of the actions of “some/many/insert statistic”.
The fact is, in this day and age, listing a home and helping a seller doesn’t take what it used to many years ago. Agents from the 70’s/80’s/90’s were in the dark ages for technology. They had to seriously work it to make sales happen. I have a lot of respect for what the agents had to do back then. On top of miles of paperwork, they would have to cold call all over the planet to let it be known there was a listing. Knocking door to door, spending countless hours was WELL worth the X% they were going to make for listing the home.
Fast forward to today. In my humble opinion, listing agents have a few things they need to do to get a home sold. Price it properly, don’t play games, market the property appropriately. From first hand experience, my listing presentation is not of the norm. But then again, I’m in Jacksonville, FL and not NYC. My average home price is probably in the 150k range truth be told. I don’t take out booklets, laptops, iPads, etc. and then give an hour presentation. It’s not needed. First, if the seller is realistic about what they know the home is worth, then we can work from there. Secondly, I will make sure they know what it takes to sell a home. You are more than likely going to lose a sale because you won’t leave the home for a showing than to price it poorly. Little things are what sells the home. A good showing experience, the home priced properly, etc. There is a laundry list of about five mins worth of talking that I won’t bore you with right now.
So back to what is being talked about in the blog. Personally, I will charge 1% on the listing agreement for my service. The seller also has to pay for a buyer’s commission as well. I am pretty flexible for that, but I will not allow anyone to pay a buyer’s agent less than 2.5%. I honestly believe buyer’s agents work more for the money than a listing agent does, but it’s just my opinion. I work with both buyers and sellers and that’s just from my experience. Back to the “money”. I’ve been burned and have been burned just in the last month because I don’t charge more for my service. Why? Because other agents, other people, etc. complain and say that it has to be a “discount service”. I still laugh at this because I’m doing everything, if not more than most agents would do when selling a home. I have a 685k listing coming up this week, how much is he going to pay “me”? 1%. What’s he getting? Video – Drone Footage – Photos – MLS – Advertising via Social Media, etc. and I’m available almost 24 hours a day for him or a potential buyer or another agent wanting information. Could I charge 3% on my side? Sure could. That would be a nice little check at closing too (just like you said), but did I really earn 21,000 dollars? I don’t think so, it’s why I don’t charge that.
So, in retrospect, there are plenty of good agents out there, not just cheap ones, or discount agents, but people that haven’t been in real estate all of their lives. They could be former teachers, come from operations in a call center, customer service, etc. We aren’t all bad. 🙂

38 Sarah

I am not a real estate agent. However, I am the daughter of one. You are crazy if you don’t think realtors work hard. My mother gets called 7 days a week, at all hours of the night. She drops what she’s doing to help people who got themselves into terrible situations by not taking her advice.

Oh, and the whole thing about how apparently realtors whine about using their own money? Well, only about 1/3 of those people my mom shuttles around and works so hard for even eventually buy a home. You have no idea how many people just think it’s fun to look at houses with no intention of buying. So, yes. They might make 3% on a sale, but I can absolutely guarantee that.my mother works harder for her salary than any person I have ever met with maybe the exception of soldiers or farmers.

I get really tired of these generalized realtor bashing blogs who seem to think they know it all. People treat my mom like their slave. They call her up yelling and complainging if she even takes a day off to visit. She’s killing herself with her work and yet you have people like YOU, blog author, who perpetuate this negative stigma about realtors. You should be ashamed of yourself.

39 Sarah

Oh, and to Teresa, you clearly don’t know how taxes work. “Tax deductible” does not equal 100% reimbursement.

No realtor I have ever met has eveade $1000/hr. Maybe in NYC. My mom makes a modest $70k a year. That is a good amount, but not even at the high end of the average income in her area. We grew up just like anyone else, scrimp in by and saving. You simply have no idea what you are talking about and are fabricating numbers to bolster your credibility.

40 David

The more work you can do without a realtor the better….they really are self serving intermediaries just trying to broker the best deal for themselves and could care less about the buyer or seller…

Empty corn field next to the house?…better make sure its not being rezoned for residential development…your realtor will just tell its always been quiet farm land….

Notice 18 other houses in a 50 house neighborhood also up for sale?….probably a good reason for that your realtor won’t know or won’t tell you….

Notice a new listing that’s too good to be true?….better check the sale history on it…its probably been relisted a half dozen times for 2 years straight …and for some reason the realtor will blame on the seller…

I could go on and on and on…I know…cause I used to be a realtor myself! What many people don’t even know of the term “Realtor” is that it does not mean they are some high end worthy business professional….it just means they joined and paid the National Association of Realtors a annual fee in excess of $600 a year for the privilege and right to use that term. Nothing Else. Its the equivalent of calling a paying member of the NRA a “Sharp Shooter.” Takes more than just a 75 hour course, passing a couple elementary test and paying the NAR dues for nothing but lobbying efforts to call yourself a competent business professional..

Realtors and Appraisers are one of the direct causes of the 2008 meltdown….cause they continue to overvalue a home in order to get more commission. Inflation rate has been at 2.5% for almost 10 years now and yet property values can increase 10% to 50% each year….how does that math even work?? Plain and simple…Do your homework….if you are a buyer…just certify mail your offer direct to the owner and make your case even if the offer is low as to how you came to your number….then let the owner decide if they need or want the realtor to complete the deal…chances are also you could find a competent attorney to close the deal for both of you for a fraction of the cost and without a whole lot aggravation and incompetence from an untrained hack who can’t even return a phone call half the time. I look forward to your angry emails. ; )

41 Paul Zubrys

Before you hire a seller’s agent or a buyer’s agent, please ask for references and ask to see a list of their last 20 home sales they were involved with. If you do this, you will find a real estate agent whose services will pay for themselves many times over. For all those that responded by saying Realtors make too much money, I have only one question; why aren’t you a Realtor? A good real estate does make a very comfortable living, so what’s stopping you? Probably the same thing that causes half the agents in my industry to quit within three years. It’s a very difficult, time consuming, 80 hour a week job, that most people can’t do well enough to be successful.

42 cindy corey

you know there are competent and incompetent people in every profession just as there are kind and mean people everywhere. i actually love my work, i enjoy helping people and i work hard for everything i make. at the end of the day I fail unless my customers are happy, they trust me, and i got them the best deal possible while being honest and competent. Generalizations of people in professions are not fair or even accurate. Are all men bad because i got a divorce?

if you want a good agent, read their reviews online, talk to them and trust your gut. meet them and see if you hit it off and then make a judgement call- like we do with everyone and everything in life. Will it always be a great decision? probably not- is every relationship perfect or do some disappoint? we are all human and not perfect beings. for what its worth, i am available to help or consult anyone reading this- for free. You can find me on zillow- Cindy Corey, Realtor

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