Learn how to spot the most prevalent estate agent scams, from lofty evaluations to creating fake buyer competition.
Property selling is not something most of us do every day, so choosing an estate agent to handle it for you can seem a little daunting.
On top of this, estate agents are generally thought of as untrustworthy and tend to have a bit of a bad rep. While the majority are honest professionals, it’s worth keeping in mind that they might not always be acting in your best interests.
Inventing phantom offers to drive up your price
Your dream has come true. Your below-asking-price offer has been accepted and the property you are buying is off the market. But the following week, your estate agent gets in touch to say that someone who viewed the property previously has put in a higher offer. What can you do? Challenge the estate agent and ask to see proof in writing that this third party exists and that they are willing to make a higher offer to avoid upping yours unnecessarily.
Making lofty valuations
It’s not uncommon for estate agents to overvalue properties in a bid to secure business, only to later advise sellers to cut the asking price when the property is not selling. Most agencies will sign you up to a 12- or 16-week contract to avoid losing business in this case, which is going to leave you out of pocket if you take a lower asking price. Before you sign, make sure to read your contract carefully and compare several valuations before committing so that you know exactly what you’re up against.
Creating buyer competition
Estate agents are also known to create a “buzz” in which buyers feel under time pressure. A common trick is to conjure up a sense of competition by booking viewings close together. In this scenario, each potential buyer will arrive while the previous viewer is still at the property. The agent may also suggest sealed bids to heighten competition, even when none exists. This is a process in which buyers submit anonymous offers and the seller decides which to accept. In this case, it’s important to stay strong and keep in mind what you can afford. There’s no point in getting your dream home if you can’t afford to make ends meet later down the line.
Convincing you to use their mortgage brokers
You’ll find that many agents have an affiliation with a mortgage broker firm who will almost definitely charge a fee. While paying for mortgage advice might be worth it if it means you get the best deal, there might be some brokers who will do it for less. Try to avoid paying over the odds by making sure you always shop around for the best deal to suit you.
Using smoke and mirrors in online listings
You’ve seen a house online on Rightmove that you thought was perfect, only to get in contact with the agent, visit the property and find it’s nothing like you thought. Estate agents are known for using crafty photography and generous measurements as bait to get you through the door. Make sure to focus on the property’s location and layout as much as the glossy photos you see online to avoid wasting time viewing houses that you have no interest in buying.
Charging for extra marketing
It’s common for estate agents to try to charge their clients more for an extra marketing push if their home is failing to sell. Before you agree to anything, make sure that you sit down with the agent to find out exactly what they are proposing to do differently and how it would increase the chances of a sale. More to the point, ask why they are not already doing everything they can to market your home.