Real estate, just like any profession, has its bad apples. And sadly, when it comes to selling your property, these unethical operators are prepared to twist the rules to their advantage.
Thankfully, there are plenty of good, honest real estate agents about. But Trow Jones is so fed up with these bad apples giving all agents a bad name that we’ve decided to spill the beans on the four biggest underhand real estate tactics you need to look out for.
That way, you can spot these bad apples and steer well clear.
- ‘Buying’ listings
When it’s time to put your property on the market, you’ll probably interview several agents. Each one will give you an estimate of your property’s value, and it’s possible these estimate might vary widely – often by hundreds of thousands of dollars, and sometimes by millions.
While it can be tempting to go for the highest appraisal, please note that some agents will deliberately overvalue your home just to win your business.
When vendors are given an inflated appraisal it can take a huge emotional toll when they’re eventually forced to reduce the sale price to reflect the actual market value of their home. It’s even worse if the vendors have committed to another purchase based on a sale price they were never going to achieve – because now they have to cope with both emotional and financial stress.
That’s why, at Trow Jones, we always give vendors an accurate assessment of their home’s value. - Overpromising and underdelivering
Some agents will promise you the world when they’re trying to get you to sign on the dotted line. But once they’ve won your business, they’ll hand over your listing to an inexperienced junior agent and focus their own efforts on winning their next piece of business.
Some of the bigger Eastern Suburbs agencies hold 20-30 open homes per week, which means that even if the senior agents wanted to attend all the open homes, they couldn’t. Instead, the juniors are left to negotiate with buyers – before rushing off to the next open home.
That’s why, at Trow Jones, our director, Mark Jones, handles all the vendor communication and buyer negotiation himself – he doesn’t delegate any work to a junior agent. Also, Mark takes on only a few listings at a time, to ensure each vendor gets five-star service. - Underquoting
Some agents will ‘underquote’ – i.e. advertise a property for less than the reserve price – to stimulate buyer interest and fill their database.
Underquoting is illegal, because it forces buyers to pay for reports (building, pest, strata) and for contract reviews on properties that would never have interested them if the real price had been disclosed.
Sadly, underquoting can work sometimes, especially in a hot market. However, when underquoting fails, it fails spectacularly, because if a property attracts limited competition, buyers are highly unlikely to raise their bid from the false advertised price to the real reserve price.
The bad apples who underquote can make life hard for honest agents, because some Eastern Suburbs buyers have become conditioned to add up to 20% to property’s advertised price, even when the home is priced accurately. - Dummy bidding
Thankfully, dummy-bidding rarely occurs at live auctions any more. However, unscrupulous agents have now adopted a different tactic. They will encourage buyers to make bids ahead of auctions (which is legal) and then trick the buyers to increase their price by telling them about fake bids (which is illegal). Sometimes they’ll manufacture fake emails and text messages to ‘prove’ they’ve received these non-existent bids.
Fed up with underhanded real estate tactics? So are we. That’s why we do things differently here at Trow Jones. Get in touch by calling 02 8667 5330 or emailing info@trowjones.com.