With the advent of the Internet, and the increasing number of people that are turning to real estate for investment purposes, it is no surprise that real estate agents have seen a surge in business. There are now more real estate agents than ever before. The problem is not with the agents themselves, but with the people who rely on their advice. Because they don't see through the marketing tricks used by the real estate agents, people end up with bad deals and, often, bankruptcy. Read more on this page to learn more!
Let's start with the most common complaint made by clients that use real estate agents for assistance. These clients complain that real estate agents to pressure them into making larger purchases than they can actually afford. This pressure often comes from a real estate agent that wants to secure a client from a certain purchase and has convinced the client that he or she needs a large home or other real estate item that can be easily obtained through a real estate sale. There are many examples of this, and all it usually takes is one push from the salesperson to get an eager buyer to agree to a purchase that is far beyond the budget of the client. In many cases, these desperate buyers end up with homes and other real estate items that are actually worth less than what they were pushed up to.
Another problem is that a number of real estate agents are engaging in unethical practices. In order to be successful, brokers need to practice honesty and integrity. However, it is not uncommon for brokers to try to "game" the system and convince potential clients that they have found a great deal. One way this is done is through a process called "staging". For example, a broker might show a potential buyer a spectacular piece of property, and then tell him that the home will need a lot of work if he is going to make an offer on it. While it is true that successful real estate agents should screen their clients thoroughly to ensure that they aren't purchasing items that aren't really worth as much as they're being sold for, it is unethical for brokers to make these offers knowing that the clients will refuse them.
Another unethical practice that real estate agents engage in is promoting properties to clients that are not qualified to purchase them. This includes showing houses in neighborhoods where they know that they would not be a good investment. The United States government is very upset with realtors who violate the FHA's Home Buyer Protection Act. The act is designed to protect the interests of low and moderate-income families by preventing unscrupulous real estate agents from preying on them. Every year, the U.S. Department of Housing and Urban Development has an Office of Real Estate Fraud Enforcement that prohibits brokers from preying on buyers that are not eligible to buy a home under the National Manufactured Housing Construction and Safety Standards Act (Meyer).
Other unethical real estate agents include a person who acts as a hired gun or a flat-fee agent without first gaining the consent of the client. In some cases, people buy homes and then fail to disclose that the person was paid to sell them. When the transaction is finalized, the former homeowner is left owing the former homeowner's money. It is illegal for a real estate agent to have either a concealed or a disclosed agreement when it comes to hiring someone to sell a home.
A real estate agent must also not misrepresent a house that does not meet all of the requirements of the National Association of Realtors Standards on Sale of Real Estate. Some of the standards that the real estate agents must follow include: it should be inspected by an inspector; it should be listed in the real estate section of the local phone book; it should come with a contract that includes a detailed disclosure statement; it should come with a closing statement that includes info such as the price for the house; and the house should come with a lender's disclosure statement. If a real estate agent breaks one of these rules, he can be prosecuted. The penalties for breaking the law are steep. For example, real estate agents who are found to have falsified data can face a penalty of up to five percent of the total commission they received from the sale, along with other fines.
Read also this related article: https://www.huffpost.com/entry/how-to-pick-a-real-estate-agent_n_5a5fbe5ee4b0ccf9f12121d2
