I offer this article to those unwary sellers and buyers. The San Diego real estate market is one of the most competitive in our Nation and it is about as cut-throat as it gets. The market is flooded with agents, brokers, lenders and others all competing for your business, and many have no problems lying to you in order to get it.
One of the most common obstacles agents face when trying to get a client to commit to a contract is to overcome the false promises and misinformation provided to the homeowner by other real estate professionals, and misinformation is often populated by online tools such as ZILLOW. Sellers are often blinded by greed, and this makes them vulnerable. Many agents will sell the homeowner his/her own dream, and this makes a seller skeptical of an agent who is merely offering them reality.
However, many agents see value in not being the bad guy. They find it is easier to beat out the competition by simply telling the seller what they want to hear.
Most common lies from agents to get listings
#1: The agent that agrees your house is worth whatever you think it is worth
A seller who believes, or wants to believe, their home is worth $10, is more likely to sign with an agent who agrees verses one who insists the home is only worth $6.
So what is the problem?
The agent agreed with the buyer, knowing the seller was wrong, only to get the seller under contract. Your fiduciary, your confidant, your advocate, that’s right your real estate agent just took advantage of you and that is unethical. Real estate listing contracts are difficult to break and usually require a mutual release from both parties to terminate. So the agent that agree to take an overpriced listing often does so betting that the owner will simply reduce the price when it does not sell.
So the agent got the listing by lying to his seller, then the agent continues to damage his/her client by allowing the seller to chase his/her dream price thereby wasting the sellers time and money. The agent does all of this for self-serving reasons; they have avoiding competition with other agents by lying to the seller about value with the ultimate goal of making a profit.
#2 The agent that agrees to take a reduced listing commission.
So you think you are a savvy seller. You demand that your agent sells your home for a reduced commission and they agree. In theory, that all may sound attractive, but are you missing the bigger picture due to your lack of experience and knowledge?
So what is the problem?
Your fiduciary, your confidant, your advocate, that’s right your real estate agent likely just took advantage of you. Historically real estate commissions were 6%, but now 5% seems fairly common. 2.5% is traditionally offered to the buyer’s brokerage for a successful sale and the seller’s brokerage keeps the rest. Agents that agree to take listings for less than the norm, almost always try to pass on the loss to the buyer’s brokerage, meaning they just offer the buyer’s side less than the traditional 2.5%. The sellers often have no idea why there listing is not drawing the same traffic as others. The unethical seller’s agent simply waits it out, with the listing on lock down, and the seller loses time and money waiting for the underexposed home to hopefully sell itself. If the home does not sell, the realtor may then gradually increase the amount offered to the buyer’s agent, and the seller remains ignorant to the truth.