Real estate agent

How to know if your real estate agent is going to cost you a lot of money

In the race for commissions, some agents are more than willing to take shortcuts

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The reputations of Canadian real estate agents took a hit recently, when a CBC News investigation found some agents in Ontario breaking the law by hijacking their buying clients from properties that pay lower commissions, such as those sold through services. registration at a discount.

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While the number of agents involved was minuscule, scandals like this are teachable moments – not only for the real estate industry, which is under constant pressure to increase the professionalism and accountability of its agents and brokers. , but also for consumers.

The lesson: Not all real estate agents are created equal.

But when the market is changing at a breakneck pace, consumers may feel justified in making hasty decisions when choosing an agent. How important can your choice be when houses sell themselves, right?

It matters a lot. Unfortunately, many buyers and sellers don’t realize this until their twentieth offer is rejected or their home, which they’ve been told will sell in a few days, needs to be relisted.

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However, you can avoid getting involved with a problematic real estate agent quite easily. You just need to know the warning signs.

Behavior of the agent who should sound the alarm

There are different warning signs to watch out for depending on the type of real estate transaction you are about to embark on. Whether you are buying or selling, however, you need to do your due diligence first when choosing a real estate agent.

“Buyers and sellers should interview a few potential agents, even if they are referred to an agent, so that they have some sense of compatibility and skills,” says John Lusink, president of Right at Home Realty. . “While all of real estate seems to be going full steam ahead, this is exactly where the consumer needs to slow down and take their time.”

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But even prudent consumers can end up regretting their choice of agent. Here are a few ways to know you might be working with the wrong person.

If you sell

“Beware if an agent says, ‘I’m going to beat the streets to sell your house for you,’” says Robert Price, founder and CEO of Bode Canada, a home owner platform. “In 2021, that’s not how home marketing works. In Canada, over 90 percent of buyers search for properties online. Therefore, “beating the streets” is actually “putting your property on Realtor.ca and waiting for leads to come in”.

Your incompetence sensors should immediately go off if an agent makes little effort to market your property, says David Fleming, agent at Bosley Real Estate. In Fleming’s view, an officer’s reluctance to stage your home properly, including the use of professional photographers, is a colossal red flag.

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“The staging works and the staging sells,” he says. “Why? Because people love beautiful, shiny things. It’s just the culture we’re in. Every property needs to be staged. Agents who don’t believe in staging leave behind. money on the table.

If you buy

Lusink says buyers should have their doubts up front if the agent they are speaking to does not take the time to set up an in-depth consultation meeting with buyers, during which they explain their fiduciary obligations and the services they provide. ‘They provide.

If a meeting takes place, but the agent does not bring up the subject of a buyer representation agreement, or glosses over the implications of this critically important document, the buyer, Lusink says, “should be concerned”.

A buying agent may be worthy of suspicion if they tell you their services are free, Price says. Buyer’s agents take a portion of the commission on the sale of the home, which means the more you pay for your home, the more your agent gets paid – a potential conflict of interest.

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“The buying agent is paid by the seller and the seller is paid by the buyer,” notes Price.

A hot market makes matters worse

The claustrophobically tight Canadian real estate market has caused countless buyers to steer clear of the lost auction wars. Fleming says it’s often the fault of buying agents who, trying to appease their customers, submit offers they know will be rejected.

“When I have 22 offers on a list, what I usually find is that four or five are absolute rubbish, like someone offering list price,” he says.

“From a pricing perspective on the buyer’s side, that’s the biggest problem – that you have agents who don’t know the market and tell you to do what I call ‘dummy deals’ that there is no point in submitting, or they know it, and they won’t resist you.

When there is a gold rush like there is in Canadian real estate, it’s going to attract a number of people who see nothing but an opportunity to exploit the situation, and the people involved. , and walk away with easy money. A little bit of due diligence on your part can help ensure that more of these lesser agents come away with what they deserve – nothing.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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