They may seem like they are chasing the best deal for home buyers and sellers, but many real estate agents play property like Monopoly and love to cheat.
From preying on your grief to using cunning scare tactics to close a deal, real estate agents can be as cunning as the meanest in any commission-based business.
While most agents act professionally, there are many ways agents charge an “idiots tax” on those who don’t know what they are doing.
Potential buyers are usually canny enough to recognise that “cosy” is shorthand for “tiny”, that “close to public transport” actually means beside the train line and that “bathroom with views” may mean the toilet is outside the back door.
But its home sellers rather than buyers who are more likely fall prey to real estate agents dubious tricks, experts says.
Disillusioned former estate agent Pav Sheen has blown the whistle on underhand tricks of the trade.
Mr Sheen was so outraged by what went on behind the scenes that he dished up the dirt in his book Tips, Tricks And Traps.
He initially intended it as advice for relatives who were buying a house but what began as a series of pointers soon grew to more than 100 pages.
During his time as an estate agent, Mr Sheen says he witnessed dozens of dubious tactics, including colleagues undervaluing properties to sell them to each other at a lower price.
Other tricks included arranging two viewings at the same time and, after one potential buyer had left, getting the office to call pretending to be that buyer putting in an offer.
He also warns that some agents are quick to betray the confidence of a vendor.
If the home seller is ill, going through a divorce or has financial problems, agents often pass this sensitive information on to buyers.
He says some real estate trainer openly boasts that they “love divorces” and encourage other agents to exploit a vendor’s emotional trauma.
When it comes to purchasing, the most vulnerable people are buyers at the lower end of the market because they’re really in the hands of the estate agent.
Former real estate agent Neil Jenman offers advice to avoid being duped in his booklet The 13 Worst Mistakes Made by Home Buyers. He says one of the most common tricks an agent uses is underquoting the price of a house.
You know how it works, you ask the agent what the ballpark is for the property to sell at auction and they quote you a figure. You spend money getting inspections and legal work done, only to turn up at the auction and find the house goes for a much higher price.
“One of the most unethical tricks in real estate is advertising a home a price well below its real price,” says Mr Jenman says. “Advertisements which say “price range” or “offers above” or “bidding to start from” are usually misleading.”
The key to avoiding this one (and many others) is to do your own research. Get to know the market well, go to auctions, visit properties, get a feel for what people are paying for properties such as the one in which you’re interested. That way, if an agent quotes you a price that sounds too good to be true, you will know that it probably is.
Mr Jenman also recommends ensuring any building inspections or legal advice that you obtain on a potential property are independent.
“Be careful about using anyone recommended by the agent,” he says. “Some agents receive kickbacks from advisors that they recommend.”
10 ways agents cheat
1. Gazumping. When a deal has been agreed to, some agents still show people around the property hoping for a better offer.
2. Value a property at a low price – and then sell it to a friend or colleague.
3. Use scare tactics such as pretending to receive offers to get people to make a higher offer.
4. Neglect to pass on all offers to vendor in hope of achieving a higher one later on.
5. Revealing a vendor’s confidentail information to buyers
6. Overvaluing houses to secure business from sellers.
7. Dummy bidding – enlist friends to cast fake bids that push prices up.
8. Make up a very low offer. This shocks the seller into accepting a genuine offer which is far lower than the original valuation.
9. Fake evidence that other properties in the area have sold for an overly high price.
10. Erect for sale/sold signs at homes the agent had nothing to do with to give a false impression.