The Top Lies Told By Real Estate Agents
Honesty is important in any profession, but it's paramount in an industry such as real estate. When you buy or sell a home, you're most likely handling the most substantial financial transaction of your life. And unfortunately, the real estate agent industry is saddled with a poor reputation — not unlike that of lawyers or even car salespeople — because some agents don't know the difference between truth and lies.
Part of the problem is the vast numbers of unscrupulous people who figure the real estate profession offers them a fast track to easy money. It's not difficult, in many states, to obtain a real estate license. Professional standards and educational requirements are at a minimum. Any kid over the age of 18 who doesn't have an FBI record in California can get a real estate license, for example, providing the kid takes a couple of real estate classes and passes an exam. Even high school dropouts qualify.
The Trustworthiness of Real Estate Agents
You rarely hear about the honest agents in the news as most coverage is devoted to agent arrests and shady scams. But that's because truthfulness isn't newsworthy. The truth is about 10 percent of the agents do 90 percent of the business, and that top 10 percent are more likely to be the type that buyers and sellers can trust. Many home buyers and home sellers say they want their real estate agent to be honest, ethical, professional and experienced.
As a group of people in a profession, I think the public tends to suspect the integrity of agents because the agents are in sales, and many consumers don't trust salespeople. My belief is agents are more trustworthy than they are given credit for. Agents survive by repeat business as well. They want happy clients, on top of which the Realtor Code of Ethics prohibits unethical behavior.
I've heard buyers say an agent will lie about receiving multiple offers, and that is absolutely absurd. They might say another buyer has an interest, and maybe another buyer does. When the market is "just right" it is possible for a home that has been passed over for months to suddenly be in hot demand. Just when maybe you want to make an offer. Agents don't generally lie about those types of things.
What Real Estate Agents Lie About
Mostly themselves, if you're lucky. Real estate agents often misrepresent their experience and credentials on their websites and/or blogs. Some spend inordinate amounts of time posting online to obtain maximum search engine exposure. Others pay for commercial rights and buy ads to rank above search results in Google and Yahoo. Agents expend this effort and expense to get you to click on their site.
You may wonder, and rightly so, if you can trust the agent's website. Just because it's on the Internet doesn't make it true. I run across hokey real estate agent sites all the time in Sacramento and also nationally. The bottom line is if your agent isn't presenting a truthful picture of herself or himself online, what else is your agent likely to lie to you about?
With a little detective work, you can find out just about anything you need to know about a real estate agent's honesty. You can assess whether agents are puffing or giving you a false picture of their abilities, strengths, and background, which will help you to determine whether you want to hire any of those agents. Here are misrepresentations to look for on a real estate agent's website/blog:
- Real Estate Experience: If you can't easily spot a reference to the number of years the agent has been licensed to sell real estate, it's because the agent has none or very little (under five years) experience. The agent may toss other numbers at you such as how long they have lived in the state or the number of years the agent was employed somewhere else. But only one thing counts, and that's solid real estate experience.
Tip: Experience is important because it means an agent should be able to anticipate problems and prevent them from manifesting. It also means you're relatively assured that over the years your agent has learned how to handle just about any type of potential difficulty without running elsewhere for advice.
- Real Estate Listings: Most agent websites feature that agent's active listings. You should check for a link to "my listings," to determine whether that agent even has any listings. Only a select few, such as exclusive buyer broker agents, refuse to take listings. Listings are the backbone of experienced real estate agents. If you can't find a link, it's because the agent has no listings.
Tip: Some agents without listings advertise other agent's listings at their own company. Read through the listings carefully to see if they belong to that agent. They may not. If you can't tell, call the office number and ask for the name of the listing agent -- you may discover it's probably somebody else. Some agents misrepresent all their company listings on their site as their own, when they are not.
- Real Estate Specialty: Agents generally advertise their specialty, whether it's a neighborhood, type of property or specific types of buyers they may represent. For example, an agent might claim to be a specialist at selling homes in a trendy neighborhood but haven't to date. Or agents may try to market themselves as an exclusive home specialist by showcasing only high-end homes on their website, yet they have never sold a home in that price range. Still, other agents may advertise that they are FHA specialists but have yet to close an FHA transaction. Puffery is the shameless new PR.
Tip: Be aware that one sale does not a specialist make. Agents sometimes have difficulty drawing the line between what they aspire to become and what they are actually are, so don't be fooled. Agents can get sued for pretending to be a neighborhood specialist, but that doesn't stop some from misleading you. Ask to see a copy of closed sales printed from MLS.
- Look Up An Agent's Real Estate License: A national place to start is The Association of Real Estate License Law Officials. If your results show "no data," just click on the name to get the license number. Sometimes this site does not provide accurate dates, but the license numbers are correct.
Armed with the license number, go to your state's licensing division. Do a search in Google for "(Name-of-your-state) real estate licensing division." Then look for license verification and enter the license number. This will tell you about when the license was originally issued. I say "about" for example, because records at the California Department of Real Estate go back only to about 1980.
Tip: Some state real estate licensing divisions will disclose if complaints have been filed or whether a license has been temporarily suspended. Of course, you can always run a Google search on the agent's name and city to find out whether the agent enjoys a good reputation.
- Get a Copy of The Agent's Production Record: You can ask your agent to print this out from MLS for you or you can ask another real estate agent to do it. For example, you might discover that the agent you are considering has been falsely leading you to believe she is a top producer but she sells only two homes a year.
Tip: A successful real estate agent generally sells a minimum of one home per month or 12 homes a year.
From the agent's production record, you can find out:
- How many homes the agent has sold per year
- How much they sold for
- Where they were located.
Tip: You might also ask for references. Some agents list testimonials on their websites but withhold client's names. If a client isn't comfortable having his or her name published, maybe that person isn't a client? If you wonder whether the agent is telling you the truth, ask for client phone numbers and call for first-hand confirmation.
At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.