Choosing a Real Estate Agent: Beware These Little White Lies

Real estate agents are our friends and business partners, right? Actually, maybe not. While on a personal level, many agents are lovely people, buyers and sellers frequently mistake the relationship for a friendship -- and that's not a good thing. An agent may be representing you in the largest money transaction of your life, but he or she is there for a very specific reason: to earn a living. And the only way an agent does that is when a deal closes escrow.

So: No deal, no money. Suddenly agents' interests don't appear quite so precisely aligned with yours, do they?

To be fair, agents rely on repeat clients and recommendations from those who are satisfied with their work. But you need to protect yourself too. When you interview agents to sell your house, listen carefully for these statements. If you hear one, proceed with caution.

1. "I think I have a buyer for your house." In an initial listing appointment, agents frequently hint that they have a potential buyer for the home. It plants the idea in the seller's mind that this could be a done deal sooner rather than later -- and that's music to the ears of sellers who would love to skip the part where you have to keep the house immaculate and show-ready. But that's not a good enough reason to give the guy your listing; if he really has a buyer, he'll show your house even if you list with someone else.

2. "We just got a great offer!" The offer is significantly less than you -- based on your agent's advice -- just listed your home for. So what's so great about that? In most cases, an offer can be seen as an opening volley. That's fine. But let's call a spade a spade. Kudos to the agents who present low-ball offers with the admission that the only great news here is that someone is interested in negotiating with you. An agent who states it otherwise is just trying to get to the finish line, where his commission check is waiting.

3. "There's no problem with me representing both the buyer and the seller." It may not be a problem for your agent, but it could very well be a problem for you. A seller wants every last nickel he can squeeze from the sale of his house and a buyer wants to avoid overpaying by that very same nickel. How can one person really represent both those interests at the same time? Dual agency isn't allowed in many states, and in states where real estate licensing laws permit it, the practice must be disclosed to both buyer and seller, said the National Association of Realtors. If you live in a state where the practice is allowed, the only way to avoid it is to work with an exclusive buyer's agent -- someone who doesn't take listings or work for an agency that also represents sellers. You can find one here. And if you're stuck in a dual agency situation, show your agent these guidelines that he is expected to follow.

4. "In my office, all the agents are like a family." A family of snakes who eat their young, perhaps. Sure, they may all share the water cooler, but agents are in competition with one another, even the ones who share the same office space. They compete for listings and for the loyalties of buyers. There are plenty of stories about the town's barracuda agent (and every town has one) who sabotages a co-worker's deal to get their own client in the house. How does it affect the real estate consumer? You want your agent to be discreet. The reasons why you are selling or the size of your budget is information that can't be shared with the guy whose desk his abuts. Ask around town for references. The top agents are the top agents for a reason.

5. "I didn't see anything in the title report of concern." Not actually a lie if they haven't looked at it, is it? Getting a clear title is of paramount importance to the buyer. As a buyer, you need to have a title that is free of encumbrances, something that proves the seller has the absolute right to sell you the house. Technically, it's not the real estate agent's job to alert you to potential problems, but the good ones will flag them if they see them. Those are the agents you want on your side. It's worth having the title report looked at by an attorney. You can also take some comfort if the title insurer issues you a policy; they actually do read those title reports.

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Latoya Rutledge

Creative home sellers who offer seller financing to potential buyers can often sell their houses more quickly (and at a higher price) in a slow market.

While applying seller financing techniques isn't more difficult than traditional real estate sales, it is important to recognize that the buyers looking for seller financing represent a different target market than typical bank-financed customers.

Similarly, the process for obtaining a large cash payment for the seller after a note is created varies from the conventional real estate closing technique as well.

Fulfilling a Seller's Need for Cash

In some seller-financed real estate situations, the property owner may have an immediate need for more cash than is available from the scheduled principal and interest payments. This situation often comes about when the seller needs to have enough money to use as a down payment for their next real estate purchase.

In order to quickly obtain a large proportion of the money due from the loan they just created, the seller could sell the monthly note payments to a buyer for a lump sum of cash. By locating someone willing to buy the note payments, the seller will have ready cash for a down payment or any other pressing financial need.

In order to streamline the seller finance sale situation, it is advisable to have potential buyers for the newly-created cash flow at the ready. A seller can start looking for buyers before the note is created, or even before a seller-financed buyer is "lined up". This way, the property seller could have a buyer for the payment stream ready to make the purchase as soon as the new private mortgage is created.

Locating the Right Note Buyer

May 12 2011 at 1:45 AM Report abuse rate up rate down Reply

Who pays the agent when you buy a home? This says it all!

May 11 2011 at 9:24 PM Report abuse rate up rate down Reply

In Florida we would lose our license if we said many of those. It is against the law to represent the buyer and seller and you cannot legally comment on a title. The others are definately exaggerated.

May 11 2011 at 8:56 PM Report abuse rate up rate down Reply

This is a very poorly written and researched article. I am a licensed real estate broker-salesperson (not an agent) in the state of New Jersey.
Regarding #2 "I just got a great offer", most professional agents are ethical and take their fiduciary responsibility to their clients seriously. If it isn't a great offer, we don't say it is. However, we are happy that we have an offer on the table. This allows us to begin the negotiation process on behalf of our clients if they will allow us to, as we are trained negotiators.
Regarding #3 and the issues of Dual Agency, representing both the seller and the buyer at both times, 9 out of 10 times, being a Dual Agent means that our company represents the buyer and seller, not that we do as individual salespeople. In most Dual Agency relationships, we have never met the other party to the contract. I work for Coldwell Banker Residential Mortgage, the largest real estate company in the country. The odds are strong that when I sell a property, it will be a Coldwell Banker listing although I show everyone's listings to my buyers as I want them to see the best properties on the market. With regard to the rare opportunities when I represent the buyer and the seller in the same transaction, there are specific rules set up by the New Jersey Real Estate Commission that we have to play by so that neither party's interest are put before the other. Both have legal representation and the process is fair and goes as smoothly as the buyer and seller allow.
Sorry to disappoint again but my office does run like a happy dysfunctional family (aren't they all??). There has never been an argument over whose client is whose or anyone trying to take someone else's client. We all know this happens in offices. But not in mine.
Last, in the state of New Jersey, only attorneys can comment on title concerns and issues. Agents and brokers are not allowed to give any input whatsoever. As a matter of fact, I have never looked at a title prior to closing.
Every state has its own rules and regulations. Your article is at best misleading but also slaps the faces of an entire group of professionals who work on 100% commission and cannot buy health insurance as a group, meaning half of us in this difficult time don't have any. Most of us overwork ourselves trying to please our customers.
Bruce Levitt
Coldwell Banker
120 Newark Avenue
Jersey City, NJ 07302
973-710-2293 cell phone

May 11 2011 at 8:08 AM Report abuse +1 rate up rate down Reply
1 reply to blevittnjrealtor's comment

Well said Bruce!! I am a realtor in Louisiana and quite an ethical one. Nothing is worse than an article like this putting ALL realtors into one big slimey basket. The vast majority of realtors abide by a strict code of ethics, and in my case, my client, not my pocketbook is my number one priority. In Louisiana, dual agency is allowed as long as all parties agree. I have done quite a few and have never had a client be less than thrilled at the close of the deal. Articles like this are so misleading, what a shame, some poor person that would have benefitted by having a Realtor, could now be facing a jungle out there alone and most probably NOT have a favorable ending. Oh, and the title attorney here deals with the title, not the realtors.

May 11 2011 at 9:50 AM Report abuse +1 rate up rate down Reply

I sold residential real estate for 19 years - I am no longer in the business. It is a very time consuming and hard job - nights and weekends and in between. There are a lot of expenses (advertising, signs, bus cards, gasoline, etc) and no healthcare and we pay the entire 15% right off the top for medicare and social security. The commission is split - If I sell a house I get half of 3% - from that half I pay taxes. I guess if you are in the high end market, it makes it a lot more lucrative. If I list your house and it doesn't sell - then I am out money and time. Sure there are crooks, but that is in any business - most agents are hard working and perform a valuable service.

May 11 2011 at 7:55 AM Report abuse rate up rate down Reply
Paul MacLeod

I can tell you right now that number 4 is a big one... I am in an office of 20 agents 5 out of the 20 will smile mightily at you while twisting the knife in your back over a few dollars or helping to kill your deal, stealing one of your clients throught deceit and dishonesty... in the long run this will spill over to their own business as the market learns who they are and what their tactics are... sad but for dual agency.. the cure for that is to act as a tranaction broker. disclose that and then you work for both in a capacity that benefits the transaction, but does not reduce the requirements for disclosure... good for all

May 11 2011 at 7:25 AM Report abuse rate up rate down Reply

Just sold a house. My experience was extremely positive. We were in a tough market, few buyers and lots of houses for sale. My Real Estate Agent was a consummate professional through the entire process. She gave us valuable guidance during the preparation phase before putting the house on the market and all along through the process. There may be sharks in the tank, but we got a dolphin.

May 11 2011 at 6:23 AM Report abuse rate up rate down Reply

dont trust them at all. they pretend to be your friend. they show their true colors when the basement floods.

May 11 2011 at 6:13 AM Report abuse rate up rate down Reply
Will & Jen

I want to buy a house since you should me a house I have to pay 7 % and 6 % to the bank then2% for closure why would I want to buy a house and after buying the house i lost 10% this year so i am down 25 percent before i even i own the house and then i am told wait a year the housing market will go down 8% by 2012

May 11 2011 at 3:56 AM Report abuse -1 rate up rate down Reply

Stupid article.

May 11 2011 at 2:10 AM Report abuse +1 rate up rate down Reply