Puffing In Real Estate
4 Ways To Avoid Puffing Real-estate Agents Offering You Bad Deals.
As a real-estate buyer, have you ever had a real-estate agent go on and on about the positives of a property they are showing you? Throwing words like ‘the best you can get for a certain price or professing how they haven’t seen anything this good?
Same thing happens when you want to sell. Agents offering you their services by saying they already have buyers or claiming they can sell your home at a higher price.
Although such talk could make you feel inclined to go with that real-estate agent, consider your agent might be puffing.
So what exactly is puffing?
Well, it is the tendency for salespersons and advertising material to exaggerate certain facts about products and services with the hope of initiating a buy. Real-estate agents are susceptible to puffery too.
Now you may ask, “Is puffing illegal in real estate?”
Well, it isn’t. You see, puffery is seen as an opinion rather than a misrepresentation of facts. Hence it can’t be put in the same boat as fraud. That means your real-estate agent can’t be sued if you get a bad deal.
So how do you avoid being vulnerable to your agents sales speak?
Here are 4 ways to nullify any attempts to shortchange you on your real-estate deal. We’ll begin with sellers and end with buyers.
1. Experience and Expertise
Experience gives one an edge when it comes to business. Many buyers and sellers of real-estate prefer to work with an agent that has done a good number of deals. Real-estate agents understand this and may be forced to exaggerate their level of experience or expertise to get business.
So basically to gauge experience, you try to find number of years your agent has been in business, the number of deals and the type of deals done. The third helps you get a feel for the expertise of your realtor.
Don’t just ask them these questions, call their office to get the exact numbers you want. Not only will the puffery not work, but it will actually help you sift chaff from wheat.
2. Cost of Business
When you have your real-estate agents trying to set fixed commissions then you need a new one. This is because brokerage fees are negotiable.
Agents who do this aren’t confident in the value they bring to the table. So they want to guarantee their pay by fixing commissions regardless of the unique value they are offering you.
On the other hand, you could have real-estate agents who have very low commissions. You also have to be careful as most times these real-estate agents are desperate for listings. Stay away from the two.
3. Selling Price
Don’t fall for that one real-estate agent who tells you your home is worth more than the market is willing to pay for it. They aren’t doing this in good fate, they are just out to get listings.
Commonly known in the industry as ‘buying the listing’, a realtor would tell home sellers that their home is worth more than it really is just to get the listing. Agents buy listings and use them as leverage to get more business nearby. Eventually, they would sell your home for a price much lower than its true worth.
So how do you avoid this?
One way to spot an unethical realtor who’s trying to buy your listing is to recognize their above-market valuation of your home. Their valuations usually stand out from the valuations of the different agents you have contacted.
Another way to spot them is to ask them how they came about their valuations. Those who just want to use you won’t be able to justify the promise of selling at a higher price. In this case, find someone else. Although it may seem similar, puffing is different than steering in real estate
4. Sweet Talk
When you are looking for a home to buy, you may come across agents who would attempt to sugarcoat the true situation of the house. You have to pay close attention to what you see and what they say.
There is a difference between a fully remodeled kitchen and one that has just been fitted with modern appliances. A cramped house is still cramped whether the real estate agent says it’s cozy or not.
Check to see if the 2-car garage can actually fit 2 cars regardless of size. When a realtor says a house is an upper fixer, find out what needs to be fixed. If you don’t pay attention to these things, you might end up losing a lot of money.
Major home repairs aren’t within the skill level of the average homeowner who is good with their hands. They would need to get skilled labor. This would definitely cost money.
Final Thoughts On Puffing
Whether you are looking to sell or buy a home, you have to be extra vigilant. There aren’t any laws protecting you from puffery. Ask for referrals when you can and do your due diligence. If you have any questions about avoiding puffery, leave a comment and I’ll answer you as soon as possible. For other real estate terms, check out this master page.