17 Biggest Lies Your Real Estate Agent Might Tell You When Buying a Home
Finding a place to call home is a rite of passage, but a dishonest real estate agent can quickly ruin the experience. Buying a home is a massive financial transaction that could either be the most exciting time of your life — or the most stressful.
Sure, most people are happy with their real estate agents and they do often provided a needed service to people, but to safeguard against detrimental mistakes, we’ve gathered some examples of how a real estate agent might lie to you during the house hunt. For instance, some might tell you it’s best to buy a home in the summer. (That’s simply not true, but more on that later.) Here are 17 lies your real estate agent might tell you.
1. That wall probably isn’t load-bearing
Not every home will have traditional exterior walls that bear all the weight, so it’s unlikely a real estate agent knows whether that obtrusive wall in the kitchen really can be knocked down to achieve your desired open floor plan. It’s best to consult a professional before taking a sledge hammer — or a pen to the dotted line — on any home you’re interested in.
Next: Be wary of trendy neighborhoods.
2. This neighborhood is ‘up and coming’
You’ll often hear real estate agents describe an area as up-and-coming, meaning the neighborhood is on the verge of extreme growth and prosperity. When they show you a home that’s a bit outside of your desired location or price, they might justify it as having great potential. Be wary in this case, and conduct your own research. Not all diamond-in-the-rough neighborhoods can be stamped as up-and-coming — no matter how hard the real estate agent wants to make a sale.
Look to see whether prominent businesses are opening new locations there or whether nearby homes are being remodeled. When houses sit on the market for a short amount of time, it’s usually a telltale sign of an emerging neighborhood. Conversely, if many local homes have been listed for years, the area is likely still a dud.
Next: The truth about commissions
3. My commissions aren’t negotiable
Brokerage fees, otherwise known as commissions, are not a fixed number and can be negotiated before a contract is signed. What many clients don’t know — and agents won’t say — is real estate agents can adjust their commission ratio for all clients. Some might choose to discount their commissions if they take part in dual agency or they’re promised additional referral business.
Also, beware of added administrative fees that could be tacked onto your contract. These are negotiable, too.
Next: Open houses aren’t always beneficial.
4. Open houses are beneficial to the seller
Yes, open houses are beneficial — for the agent. Keep in mind most people who attend open houses are just nosy neighbors looking to window peek in person. This is really a networking opportunity for real estate agents. Only 8% of homes are sold via open house. So if your agent is urging you to schedule open houses every weekend in June, think about whether this is for their benefit or yours.
Next: Do they really have interested buyers?
5. I have potential buyers that would love your house if you list with me
In an effort to earn your business, many agents will entice the seller by claiming they have a list of interested buyers who would love your home. That’s great, but there’s no way in knowing whether that list of “buyers” is just email addresses from their subscriber list or active house hunters ready to put an offer on your home. Don’t let this be the sole reason you choose an agent. If they have an interested buyer, you’ll know it when the house is on the market — regardless of who lists it.
Next: The true cost of upgrades
6. This home needs only $10,000 of work
This phrase often follows a “keep an open mind” statement as you tour a prospective home. For buyers looking at fixer-uppers, some agents will severely downplay the amount of work and money required to bring the home up to your standards. Remember most agents are not contractors, so their rough estimates about a kitchen remodel — which, by the way, run between $12,000 and $33,000, on average — are likely way off. You’re better off doing research on your own and taking that into account before making an offer.
Next: Agents lie about their availability.
7. I’ll be with you through every step of the process
What began as a polite reassurance becomes a downright lie later. In reality, you talk to seemingly a million different people throughout the buying and selling process. You need an attorney at closing, county representatives for taxes, reputable home inspectors, loan officers, and mortgage specialists — none of which a real estate agent will guide you through.
An agent’s job is to show homes and communicate buyer preferences to a listing agent. Often, a real estate agent’s schedule will not coincide with your closing dates or other set appointments, making them conveniently unavailable as you personally try to negotiate a loan or coordinate inspections. For first time homebuyers, this can be disheartening and stressful.
Next: An attempt to lower your expectations
8. You won’t find everything you’re looking for with your current budget
Don’t let an agent tell you they can’t find you something in your budget. They’re subconsciously lowering your expectations to make the home-buying process easier for them. They’re attempting you give you a reality check after hearing about your extensive wish list. Or it could just be their way of getting you to increase your budget, so they can make a better profit.
Next: Do you really need an agent?
9. ‘For sale by owner’ is dangerous
Contrary to popular opinion, you don’t always need a real estate agent to buy or sell a home. Actually, there are benefits to choosing to go the for-sale-by-owner route. One, as a seller, you don’t have to pay an agent commission, which can help you pocket more cash. Also, you have the advantage of working with the seller directly, which eliminates the back and forth between agents, allowing the process to go a lot quicker.
Next: What’s really considered fair market value?
10. This is actually fair market value
Agents have access to multiple listings and will usually conduct a comparative market analysis to determine a fair market value on your home. However, some agents might stretch the truth and provide a market value higher than what it’s truly worth in hopes you’ll choose to list your home with them. On the other hand, if a buyer is interested in making an offer, their agent could show them outdated or irrelevant data that would prompt them to submit a more competitive offer and increase the chance of acceptance.
Next: Do you really need to stage your home?
11. It’s worth it to stage your home
The verdict is still out on the benefits of staging homes for resale. Some agents tell sellers it’ll add home value but only if done properly. Others claim it’s like putting makeup on a bear, and smart buyers will see right through an artificial surface. Professional staging companies can tack on thousands of dollars to an already expensive process.
Most of what’s needed for house hunters to envision their life in your home can be done on your own. Put a fresh coat of neutral paint on the walls, add a few trendy accessories, and remove the clutter. The serious buyers are more interested in the bare bones of the home anyway.
Next: What about lowballing an offer?
12. Don’t lowball or negotiate your offer
You would hope all real estate agents have your best interest in mind, but that’s not always the case. Great agents will educate you on what would be a fair offer on a home you’re interested in. Others are just out to get the highest commissions possible.
They’ll cite reasons for avoiding low offers and long negotiations due to the risk of offending the seller. But if you know it would take a substantial amount of work to get the home in working order, you should offer only what you’d be comfortable spending.
Next: What agents will never tell you
13. It’s a great time to buy a house
Here’s a bit of common sense. Real estate agents will never say it’s a terrible time to buy a house. If you’ve done adequate market research in your area, then you already have a feel for how fast homes are selling. For instance, a Nerd Wallet study found home prices are highest in the summer months and lowest in the winter.
Shady agents might also tell you interest rates are set to rise in the next few months, and you must capitalize on this now. The harsh reality is you should only buy a home when you can financially afford to do so, regardless of an agent’s forecast.
Next: How agents encourage buyers to make rash decisions
14. Don’t wait to put an offer on this home
To move the process along, some agents might claim “time is of the essence,” and interested buyers should try to make a decision sooner rather than later. They’re able to say these things because you as the buyer have no idea whether other offers are truly on the table. Real estate agents can talk to other listing agents about a property’s recent activity, but you can’t. By pushing the narrative of a potential bidding war, agents are simply stretching the truth and pushing you to take the next step before you’ve had time to think it over.
Next: Renting versus buying
15. Renting is a bad idea
Of course, it might make the most financial sense for you to rent rather than buy a property, but a real estate agent out to make a few bucks would never tell you that. Instead, they’ll point out the advantages of investing in real estate and tell you how ripe the market is for young buyers, regardless of your financial situation. Banks will give home loans to just about anyone these days, so it’s up to you to make sure you can afford a home before contacting a real estate agent.
Next: Why you should check out a real estate agent before signing a contract
16. My experience is vast
Most agents will advertise a particular specialty, such as property types, local neighborhoods, or certain clientele. They might claim to specialize in lake-front properties or trendy urban neighborhoods without ever having sold a home in that arena. To validate their claims, request details on their background. Reviewing a list of their closed sales can help, too.
Any real estate agent who’s new to the business should be heavily vetted before you sign with them. Despite their claims of knowing the market inside and out, you’ll want to double check their references aren’t just family and friends who would speak highly of them regardless of their industry skills.
Next: Make sure they don’t lie about their credentials.
17. I have an active real estate license in X states
Naturally, some agents are better than others. One seemingly obvious step in choosing a trustworthy real estate agent is to look up their corresponding license. If their website advertises a license in Pennsylvania, New York, and New Jersey, validate that claim by doing research through the Association of Real Estate License Law Officials. Search an agent’s license number, and verify it with your state’s licenses division. Also, a solid internet search will tell you whether the agent is in good standing with previous clients.
Follow Lauren on Twitter @la_hamer.