7 sneaky tricks of the real estate trade

Buying or selling a house soon? What you don't know about the industry could cost you. Your real estate agent won't tell you, but we will.

By MSN Money Partner Jun 14, 2013 12:10PM

This post comes from Angela Colley at partner site Money Talks News. 


MoneyTalksNews logoUnless you have a lot of free time, or don't care about getting the best deal, real estate agents are a necessary part of buying or selling a house. They know the industry in and out and make the task a lot easier for you.


But, as with any special service or skill you pay for, what you don't know can cost you.

If you're planning to buy or sell a house, we'll explain the tricks of the trade of the real estate business -- what you're in for and what you should know about the industry.


1. Using creative wording

Real estate agents word their advertisements in a way to cover up flaws and get you to view a house, possibly wasting your time. Today Money has a list of common terms and what may be their hidden meaning, including:

1. Cozy (too small)
2. Charming (too old)
3. Original condition (appliances are 50 years old)
4. Needs TLC (it's a dump)
5. Conveniently located (noisy)
6. Desirable neighborhood (this little house has been way overpriced because the neighborhood has some snob appeal)
7. Efficient kitchen (too small to fit two adults)

Always read between the lines, and search online for photos. Zillow and Trulia both have an extensive database of homes for sale.


2. Promising more than you can get

Some overly eager agents might be willing to stretch the truth a bit to get you into a contract -- like saying your house will fetch more than it actually will. Then, once you sign with the agent and the house doesn't sell, the agent will blame the market.


Do your own research before you sign up. Compare recently sold and for-sale homes in your neighborhood to get an idea of pricing. If an agent says you can make $20,000 or $30,000 more than the average, he may be stretching the truth. Ask him to explain how he arrived at the higher price.


3. Making referrals

The referrals you get from your agent might not be the best deal available to you. For example, agents may refer you to a mortgage broker they know, or connect you with a home inspector who may not be as objective and thorough as one you find yourself.


Consider any referrals your real estate agent provides, but look for professionals on your own to make sure you're getting the best service and price.


Home purchase © Ryan McVay/Photodisc Green/Getty Images4. Not disclosing commission details

According to MSN Real Estate, the average nationwide commission is 5.1%, which you probably know is split between the seller's and buyer's agents. What you may not realize is that 5.1% is just an average. Your real estate agent probably won't tell you that the commission is negotiable.


Bring it up in your discussions. While you're at it, everything else in your contract is negotiable too, so haggle a bit to get the best terms.


5. Confusing loyalties

Real estate agents are loyal to whomever they’re working for. If you meet a nice agent at an open house and strike up a conversation, keep in mind that the real estate agent is working for the seller, not you.


Don't tell the seller's agent anything you wouldn't tell the seller directly -- such as how much you plan to spend, how soon you need to move, or what you're willing to overlook in repairs.


6. Stretching marketing truths

Some agents inflate their marketing plan, making it seem that your house will get a lot more exposure than it actually will. Then, once you give her the listing, you rarely hear from her and you can't find much in advertisements or online.


Before you sign up, ask to see the marketing plan in detail, including which websites will be used and how much time she plans to spend. If you don't think your house is being marketed enough, say so.


7. Not providing full disclosure

Bankrate says at least 32 states require a seller's disclosure, but what the seller and the real estate agent must disclose can vary depending on the state. For example, some states require disclosure of common natural disasters in the area like earthquakes or mudslides. Others, like Texas and South Carolina, require disclosure of noise pollution.


But what if you're not getting the full picture?


Before buying a house, research the area and see if any natural disasters occurred that could have damaged the house, and ask a home inspector to look out for warning signs. For other problems, visit at different times of the day to get a feel for the place.


More on Money Talks News:

VIDEO ON MSN MONEY

21Comments
Jun 14, 2013 5:23PM
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You missed the trick where you thought your agent was representing you the seller but discover when you sit down to close the deal that the buyer is the real estate agents son and after he buys it he lists it at a lot higher price.  This really happened.
Jun 14, 2013 7:40PM
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Or its a friend of the real-estate office. And they always want 5 grand more to make the dealio. For another 5 grand,they are positive the deal will happen. Bunch of crooks. I know, my grand parents were agents and they were only doing ot to score. This is not a community service.They are in it for the Money. 
Jun 14, 2013 11:45PM
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Universal Issue:
There are black sheep in every industry. The author here has clearly researched thoroughly and NOT making up these  things ? Otherwise Angela would be no different than the trickster real estate agent. My take on this is as follows,
1...would you leave a 25-30 year debt or a $400,000+ investment unattended with a person who is not a professional? 

2...Who is the boss in charge of this Real Estate Transaction? In other words who is hiring the agent, or the agent is hiring you?

3...Would you leave 400000+ with a complete stranger or would you check his/her credibility?

4...If you don't follow up or follow through on the agent YOU HIRED and not check any references and give him 40000+ transactions might as well write me a check too, since you like throwing away your money.

All in all learn to deal with the agents with the onus of self reliance. You hire agents not vice versa. They only SHOULD facilitate what you want them to, if not then fire them and get the one whom you think understands you. 

Demand them to provide DISCLOSURES

Don't just sign Agreements and Contracts or take VERBAL words for anything. Written proof and due diligence is demanded.

Expectation are not closing ones eyes  but DEMANDING what you NEED these hired agents for and make sure it gets done.

Demand Up-to-date DATA and double check and ask again and again for explanations if you don't understand. 

In the end NO TRICKSTER can TRICK you unless YOU LET THEM

Jun 17, 2013 9:38AM
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Or dragging their feet so it makes you think they are doing a job that will benefit you as in I bought my house from a private owner and didn't use a realtor closed in one week use a realtor and you might close in 2 months ! realtors are just used car salesmen in a different suit !
Jun 17, 2013 9:02AM
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What a terrible piece...I have been a broker for 32 years and I tell all my clients that commissions are negotiable. Don't say "NO" real estate agent will tell you...What a buffoon this guy is and BTW I can spell out better tricks than that, Msn get your facts straight
Jun 14, 2013 7:31PM
Jun 17, 2013 10:54AM
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There is one  point which might come up in the real world. That is "buying a listing" in which the agent will overstate the market potential. The rest of it is pretty much against the law in California. The part about referrals is moronic. We hire people we know and trust because our reputations are on the line every time we make any kind of suggestion. The other thing involves Zillow and Trulia. They do not maintain the data nor discern the differences between two homes with similar living spaces. At best they only serve to distort the market with inaccurate comparisons and outdated information.
Jun 14, 2013 6:48PM
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i'm as afraid of realestate agents as i am of life insurance agents. it all sounds the same to me pay alot of money for something that will either bait others to collect what you have or posess it.
Jun 29, 2013 9:25AM
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There are bad seed's in every profession, but if you live your life in fear of always running into them, you miss out on LIFE!!!!!
Jun 14, 2013 7:32PM
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This article is lame. A filler article by someone that had to think of something to get a paycheck. 
Jun 17, 2013 8:28AM
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Tafah, this is illegal as an agent has to disclose if they have a personal interest in the property as a buyer or seller. If we give the name of an inspector or mortgage broker it is because we know they work hard and are through and excel at their job. Not because of kick backs which are illegal.
Jun 14, 2013 6:46PM
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You said that the agent works for the seller, that depends. In FL, where I am licensed, most of the time we are transaction brokers. The rest of the article has some value, but as for "tricks" if you work with someone ethical and honest there are no tricks.
Jun 14, 2013 10:25PM
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This article is offensive and unfair to the honest, hard-working real estate agents out there who genuinely have chosen the profession because these are the skills they're born with.  Every one of us work to make a living. Sure the 5% commission seems like a lot, but sellers are paying for a service and expertise that the average home seller doesn't have. My husband is an agent and bends over backwards, often for people who think he 'owes' them every minute of every day of his life because they've signed a listing agreement.  He's honest.  He's direct. He's loyal.  Out of that 5% commission, he has to pay local and national dues, pay for his required training and licensing, pay for his own gas driving up and down the road for hours on end, pay his own advertising, work days, nights and weekends, do his own secretarial work, buy his own signs, ...and then after all of that... has many clients think they know more, can do better, and don't get the concept that the price of their home will directly impact how quickly the home will sell....so after spending thousands of dollars on a client, without earning one cent from them, some clients decide to go to another agent and drop the price.   My husband is a top selling agent in the area. But he puts in twice the hours and earns half the pay that I do without any benefits and is required to pay more taxes just because he's considered "self employed".

 

So maybe this author should spend a little time researching his next article before he goes out bashing the majority of hard working men and women that are in business just to earn an average living.  I'm quite confident the author of this article isn't providing his writing services for free either!  Sure there might be a few bad apples out there, but show me a profession where there isn't one!  It's articles like this that contribute to the idea that all realtors are dishonest millionaires and is nothing more than a way to deliberately mislead the reader in an effort to get an audience.

 

Jun 16, 2013 9:34PM
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we've rented from same lady nearly  10- yrs; late 1 Sun she says she's got to sell due to health problems; she'd already had it listed 3 wks when we went on line. We tried for gov't loan but due to new regs, it needed lots of updating to property. It was listed as is & she was trying to help us by lowering costs but now we're stuck with rent & monthly bills for upkeep of water filtration system required for her to sell. It still needs a new septic field so this was blessing in disguise. As of now we're on month to month basis but would have hard time moving due to money we spent to try to buy thru gov't agent who was very rude & demanding; plus I'm on so many meds I hit medicare gap & am paying 80% of drug's mkt price for all my rx (9), At least her realtor, knowing I'm severely disabled is willing to give me plenty of notice before bringing people in.
Jun 14, 2013 2:42PM
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They should call this tips for dumb people. If you don't know the basics do not go look at houses to buy or you will lose!
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