If a real estate agent’s promises seem too good to be true, they probably are. Photo: J.R. Rouse, Broker Associate Sotheby’s Int’l Realty
While it’s not uncommon for real estate agents to offer client incentives or reduced commission rates, there’s a point where an overabundance of promises should be considered a red flag. Tori Atwell, broker associate with Alain Pinel Realtors, gives a true life example: “I had clients who returned after spending seven months working with a ‘discount’ agent. The agent enticed them by offering to give them most of his commission. Seven months later, they weren’t any nearer to getting a home, and they missed out on numerous opportunities. What’s worse is that during this time, the local property value had increased by about $60,000—they were literally priced out of the area where they wanted to buy and had to start looking elsewhere.”
According to Ms. Atwell, this is one of many cautionary tales about buyers being strung along by the promises of an unscrupulous agent. “These agents will often offer to give up most of their commission or charge a low flat fee,” she explains. “The problem is they don’t do anything for you. They don’t connect you with the right lender, they don’t write good offers, they don’t tell you when properties come up that may be right for you…you may as well be on your own.” Even if a sale does occur, it may be just the beginning of a buyer’s problems. “These agents are likely to lead you to a sale that results in legal issues later on. If something goes wrong after the papers have been signed, they’re typically long gone.”
Since these agents are licensed, they aren’t technically scammers, but to the clients they take advantage of, they may as well be. “These are typically agents who just didn’t succeed working for a legitimate firm,” says Ms. Atwell. “By luring unwitting clients and keeping them on the hook, they’re able to make a couple thousand dollars here and there, which is how they stay in business.”
If the fear of choosing the wrong agent is making you anxious, relax—according to Ms. Atwell, finding a reputable realtor requires little more than common sense. “If you went to a lawyer and they offered to take your case for next to nothing, wouldn’t it be a red flag?” she posits. “Or, if you needed a surgical procedure done, would you choose a surgeon who offered to do it for a $1,000 flat fee? Likewise, if a realtor’s offer seems too good to be true, it probably is.”
To add further confidence to your choice, Ms. Atwell recommends choosing an agent who’s backed by an established real estate firm. “With these fly-by-night realtors, there’s no one overseeing them or watching out for the buyers’ best interests,” she says. “By choosing to work with an agent from a reputable firm, not only will you be more likely to get a successful result, you can rest assured that if something goes wrong, you won’t be left in the lurch.”
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