I don’t always write about real estate, even though that is how I make my living. But every so often something happens that I feel obligated to write about in an effort to hopefully help distance myself from the deceptive behaviors I see on a regular basis in the real estate industry.
Real estate inventory is incredibly low, which means demand outweighs supply. Good news if you are in the market to sell. Not so good news if you are in the market to buy. For instance, we were outbid three different times on homes before we finally found one who would accept our offer. And even then, after the home was on the market for over three months, when it came time for us to make an offer, suddenly, as if by magic, the mysterious “other offer” reared its ugly head.
This is something I am seeing all the time these days. There is always “another offer.” I put that in quotes because I have a hard time believing that agents are always telling the truth. It doesn’t matter if the home is on the market for 6 months and was once a crime scene, suddenly people are coming out of the termite-infested woodwork to put in an offer over and above asking price.
Now most agents would not call this lying, they say they are fighting to get the most for their client, which is their job. But I say they are fighting dirty.
Before I continue let me just say that I am not talking about brand new listings that are jaw-dropping and have everything. Of course those homes are going to go fast and get multiple offers in this market. I’m talking about those quirky properties that have been sitting for a while.
When agents see homes getting snatched up quickly, they see it as an opportunity to manufacture scarcity in every situation. But not every home is for everybody. There are those homes that will sit on the market regardless of how few homes are in direct competition. The fact of the matter is that pricing is going up and people are trying to outrun the trends. They are trying to cash in on the slight increase immediately without allowing the market to catch up.
The problem with trying to bend the truth for your client is that every so often it may hurt them and not help them. Take this example, a buyer brings the best offer they can to the table, but since it’s a seller’s market you decide to “manufacture” a little competition in the hopes of getting more money for your client. So you go back to the potential buyer and tell them that they need to bring their highest and best offer to the table because you have other offers. The buyer knows that they can’t do any better, so rather than get into a bidding war, they simply walk away.
It happens. And it makes me angry.
I recently learned of another trick some agents use. This line of thinking never even crossed my mind and I’m glad that I still have some ethics. The trick goes like this- say a listing goes for well over asking price, the issue then becomes whether the home appraise for the sale price. Some agents will update the price on the listing in hopes that the appraiser will not notice how far over asking price it is going. They are basically counting on someone not doing their job well in order to eke a few more dollars out of the deal. I was flabbergasted at this practice but apparently it is pretty common place.
When did telling the truth become a poor negotiating strategy? I previously wrote a report shining a light on some of the deceptive practices agents use in order to get clients, like promising a higher sale price than other agents so that they’ll sign on the dotted line. Other agents use the strategy of offering to buy the home themselves if they don’t sell it. They may buy the home but for well below market value and it will be a nightmare.
Some people are now waiving their right to get a home inspection in order to have their offer move to the front of the line. Now, I ask you, is that in the best interest of the consumer? Of course not, but the listing agents don’t care. They are getting the best deal for their client. Period. It’s the buyer’s problem if the home has unknown issues. It’s just not right.
I get frustrated as I scrape and claw for every client I work with only to be done in by the unethical behavior of my competitors. This is why authenticity and generosity are the two pillars of my business. It may make business growth slower but ultimately I’d rather be kept awake at night because of a lack of clients rather than a lack of morals.