Do you think of realtors as chummy, altruistic home-buying experts whose main goal is to find the perfect house for you and your family to cocoon and live the American Dream? If so, think again.
A training manual inadvertently left in a New York City apartment by a broker shows that, without a doubt, real estate agents are salespeople, first and foremost. Clinching the sale is priority No. 1, and they may even engage in some tactics reminiscent of used car salesmen.
It's a living
The tongue-in-cheek description of the discovered manual -- which the author notes gives guidance on how agents should dress, as well as the fine points of dating clients – probably won't surprise anyone who has ever used a real estate broker to buy or sell a house. Right?
Not necessarily. After all, enough confusion reigned in the past regarding whose interests real estate agents represented that a new category of real estate professional, the "buyer's agent", has emerged.
These brokers act exclusively on behalf of the buyer, as the name infers, instead of the seller – whom the real estate agent usually represents. Some agents claim to be both – "dual agency" representation – but, according to some experts, the inherent conflict of interest embodied within those kinds of agreements is best avoided.
Despite the fact that real estate brokers are generally not required by law in order to sell or purchase property, the industry has created a niche for itself, and many sellers and buyers consult agents to complete their real estate transactions. Like many other kinds of sales jobs, however, these brokers are working for a commission. Their job is to represent the client during the sales process, but ultimately, they are in the business to earn a living.
Transparency can be variable
While most real estate agents are very likely honest individuals, there are some that are less so. Celebrity realtors interviewed last year outlined several common "tricks of the trade", as well as examples of disingenuousness:
- Putting up expired or sold listings on the Internet just to solicit inquiries
- Minimizing the negative aspects of a property through misleading advertising
- Not mentioning issues that should be disclosed
- Implying that open houses benefit sellers, when agents generally use them to market their services.
Apparently, agents also impersonate each other, to the detriment of clients. The National Association of Exclusive Buyer Agents recently posted a warning on its blog that described just such behavior. The group noted an uptick in the number of realtors claiming to be buyers agents only, despite the fact that they or their companies also took on sales listings – which means that they work for sellers, as well.
Bottom line? Look before you leap
While the piece on the realtor's handbook is quite entertaining, the fact that real estate brokers use common marketing tactics in order to pressure apartment and home hunters into using their services isn't all that shocking.
Similarly, there is no reason to be outraged about the fact that open houses behoove realtors more than sellers. Commission rates, after all, are agreed upon when the contract is first signed, and are not dependent upon open houses, or the number of showings required in order to sell the property. Only when the house is actually sold does the seller pay up.
For home buyers and sellers who choose to use a real estate broker to help navigate the sometimes complicated property transaction landscape, due diligence is in order, just as it would be with any large purchase or investment. Educate yourself about the process, and maintain control throughout. Doing so should keep transparency high, and surprises low.
