If you’re young and looking to buy a home, your first step is probably to find a real estate agent. After all, as a young adult looking to put down roots, you’ve never bought a home before, so it makes sense to find an expert in the area. Some people may go to their parents for advice, too, but if they bought their home years ago, they’re going to find that the real estate market is very different today.
Once you’ve started looking at homes, however, you may discover something interesting: some of the research you’ve done doesn’t exactly match what the real estate agent is telling you. If you ask the agent about it, they will probably tell you that your sources, especially if they come from the internet, are wrong. But are they?
While most real estate agents are honest with their clients, some unscrupulous ones have actually been known to mislead their young buyers just to make a sell. Here are several ways they may do so. If you catch your agent doing any of these things, consider finding someone new.
1) “Everyone Signs an Exclusive Buyer Agreement. It’s Standard.”
Some real estate agents may try to convince you that everyone looking to buy a house signs an exclusive buyer agreement. These agreements state that you will only work with that agent for a specific time frame. But what do you get out of it as a buyer? Nothing! Signing one of these agreements means you can’t go to another agent if you decide the one you’re working with isn’t finding you the properties you want. It also often locks you out of purchasing a home that’s for sale by owner or buying a brand new home directly from the builder.
2) “Don’t Worry about that Problem, it’s Minor.”
A good agent will tell you the truth about the properties they show you, even if that truth doesn’t exactly make the home look like a winner. If you see something you think is an issue and the real estate agent waves it away, take another, closer look. It may be true that it’s a minor issue that can be fixed easily, but if your agent does this several times, they may be trying to convince you to buy a property that hasn’t sold for months because it has some major problems.
3) “Those Lower Rates? They’ve Changed.”
Some fraudulent real estate agents will promise you specific rates upfront, but when it comes time to start signing off on the paperwork, you’ll notice that the rates have changed. If any of the numbers change, ask for a full explanation, even if they’ve changed in your favor. If you don’t like what you’re hearing, walk away. Real estate agents are not allowed to advertise rates that are lower than what they actually offer you, so if that happens, be sure to report them to your state’s real estate board.
4) “You Should Work with This Other Party. No, I Have No Connection to Them.”
Sometimes this is the truth—some real estate agents will refer you to a mortgage broker, lender, or other professional if you ask. But if they have any kind of arrangement where they get a finder’s fee or percentage of anything you pay that other party, they must disclose this to you. If they don’t, they’re violating the Consumer Financial Protection Bureau guidelines.
5) “I Need to Ask You a Personal Question about….”
While it’s fine for you to volunteer personal information if you want your real estate agent to factor it into your home search, your agent should not ask you for specific personal information. For example, they may not ask about your sexual orientation, ask where you’re from, your religion, and many other things. In fact, there are many pieces of information they cannot even volunteer, such as telling you other families on the street have children or referring to a condo as a “bachelor pad.” In some cases, it’s very restrictive on the part of the agent because they have to be very careful about what they say.
(NOTE: Do you know what “WBFP” means? If not, you should probably grab your copy of the Real Estate Buzzword Translator: Click Here)
If it seems like your agent is steering you towards a certain home by offering you this type of information, there may be a reason, and it may not be because they’re trying to help you find your dream home. Do some research to see if they’re illegally telling you things in order to mislead you.