Tricks that Give Agents and Brokers Bad Names…REDUX

From the TrueGotham archives:

I’m furiously committed to the idea that expert, ethical, and talented brokers and agents are tremendously valuable to clients. But there’s no point in pretending that every broker and agent is. In fact, so many people out there have had bad experiences with (alleged) real estate professionals, that making the case they are all good, in my mind, only serves to undermine the credibility of the speaker.

What are the things shoddy agents do to hurt the reputation of the industry? Just for fun, we brainstormed some lists.

Some ways agents burn bridges with buyers:

  • Steer buyers away or towards property based on what’s best for the broker’s bottom line, whether it’s commission, price, broker’s own listing, a building the broker is involved with, a coop board that will be easy for the broker to deal with, etc.
  • Railroading buyers to close against their best interests,  for instance, by not disclosing other apartments in the same building that are for sale.
  • Not disclosing financial information that is important but not yet made known to the general public.
  • Not disclosing dual agency, typically by showing a buyer their own listing and not telling them they are representing the seller.
  • Falsely stating number of rooms and square footage. One common version of this: calling an alcove studio a "one bedroom" just because someone added a wall.
  • Steering clients here or there based on sexuality, race, social status.
  • Discounting valid buyer concerns that can cause more work, and potentially lost commissions, for the agent.

And sellers:

  • Providing a false or inaccurate comparative market analysis, typically to make the seller feel false hope (and warm fuzzies toward that friendly agent) about their property.
  • Overpricing as a way to win exclusive listings.
  • Not presenting all offers–even though it’s against the law, I know of cases in which agents have withheld offers that would earn reduced commissions for the agent.
  • Inflating the number of showings, the feedback, and the marketing of the property to make the agent look busier than he or she really is.
  • Steering the seller towards one offer over another for no valid reason except for the agent’s personal gain.
  • A broker who is not knowledgeable about the listing.
  • Taking on a seller’s (usually overpriced) listing merely to lure buyers who can be redirected to other properties.
  • Withholding information that might be valuable to the seller, but could delay or prevent a signed contract.
  • Neglecting possible purchasers at open houses for whatever reason.
  • Being negative about the property.
  • Discounting valid seller concerns that can cause more work, and potentially lost commissions, for the agent.

What else? Any other suggestions?

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11 Responses to Tricks that Give Agents and Brokers Bad Names…REDUX

  1. avatar anonymous says:

    Here’s one – the seller’s broker made it so my friend’s accepted offer was conditional upon having a no mortgage contingency unless the buyer used a specific mortgage banker.

  2. Not surprising but also not necessarily a cut and dry “bad” behavior. The seller’s agent works for the seller and may have known that the best chance for the prospective purchaser to get financing or perhaps have the apartment appraise would be if the buyer used a mortgage banker already experienced and familiar with the building. The agent here was working in the best interest of the seller. The question I would ask is whether or not the seller’s agent disclosed why they insisted on this particular banker? As a buyer or buyer’s agent, I would insist on this information. This type of behavior happened more frequently when the market was hot. I can’t imagine it is happening much now if at all given the additional leverage that buyers are experiencing in today’s market.

  3. avatar Larry Walker says:

    Let’s not forget sheer incompetence. Of course we have a large number of RE people who will do anything for a higher paycheck but we probably have an even greater number who poorly represent their clients because they just don’t have the brains or experience to do a good job.
    My greatest pet peeve is the selling agent bonus. For what reason is the amount of commission and bonus hidden from the buyer on the consumer MLS data sheets? If buyers were made aware of the total compensation to their agent before looking at property then they could (A) see through their agent’s enthusiasm for high-paying listings or (B) ask for a rebate of the bonus.

  4. avatar anonymous says:

    Doug, I’m the one who posted the first blog. From what I understand it was doubtful that this had anything to do with the seller. My friend’s agent told him that the seller’s agent had a reputation for playing games, creating false bidding wars (which the agent tried with my friend but it didn’t work as his offer was accepted anyway).
    Just seems strange and unethical to make the terms of a sale conditional like this. As a result my friend balked and found another place.
    I work on wall st managing money for hight net worth clients – if I ever did something like this I’d be out on the street and my firm would be fined.

  5. Sounds, unfortunately, like your friend was dealing with the kind of seller’s agent this blog is hoping to see go away.

  6. Thanks Larry.
    Incompetence is indeed a major issue and I think that often times it is the primary reason that many of these things take place. I agree that aside from those who will compensate integrity for a buck, the majority of these situations arise from an agents lack of knowledge and expertise. Who’s fault is that though since our industry will give anyone a license?

  7. avatar Norm Fisher says:

    Great blog Douglas. I just discovered it this evening through the Inman panel video on the Sellsius blog.
    The worst dirty trick happening in my market is agents trying to keep new listings a secret from other agents. Right now, inventory is so slim in my market that buyers will line up a block deep for a good listing that actually makes the MLS system.

  8. Thanks Norm. We have a bit of that “pocket listing” phenomenon here too but our local real estate board has made an effort to put an end to the practice by requiring agents to share listings within 72 hours. My problem with that is that is a long time. I think it should be 24 hours. The other major issues we have here in NYC is that we have no MLS and not everyone is “governed” by the Real Estate Board of New York. It’s a bit of a Wild west mentality here sometimes but for the most part we all play nice.

  9. avatar Sy Qutb says:

    My agent told me that if I didn’t sell my place soon my rectum would fall out of my mouth because “I was talking out of my ass”. – Realtor humor

  10. avatar LS says:

    As a (primarily) seller’s broker who generally lists small buildings for sale, here is one of my major pet peeves: The second I have a listing hit the market, my seller invariably gets a number of phone calls from brokers who “just happen” to have a buyer extremely interested in just such a building, and “wonder” if the building might be for sale. What an awe inspiring coincidence!!! Of course, the broker always gets referred to me, and I am always very polite and professional with them and their buyers, but by definition they have put their buyers on slightly weaker footing simply because there can be no trust for me at that point, so everything that comes out of their mouths is scrutinized more harshly by me (and the seller) than any other broker. Another pet peeve is brokers who do not have any background info on their buyers, and who do not know how to present themselves or their buyers in an attractive and believable way.Their buyer may be amply qualified and “real”, but decisions are in part made by the information their brokers have supplied to us.

  11. avatar Reuben Moore says:

    Mr. Heddings –
    Your blog is one of my favorites. And, this post reminds me of an older post by Henry Abbott that I just loved:
    http://heddingsproperty.zippykid.it/archives/im-new-to-truegotham-truegotham-so-far.html
    “Scandalously terrible” Just perfect. And clients are often unaware of this scandalously terrible behavior.
    Anyway, my biggest peeve is a huge problem in my market, but I do not know how big a problem nationally. And that is, dishonesty by listing agents about the existence of competing offers. Frankly, unless we have first-hand experience with the cooperating agent, we never know if we can believe them.

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