Realtor Conflicts of Interest: 5 Things to Watch Out For

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By Jamie Ayers Updated October 21, 2021


When it comes time to buy or sell your home, you'll also be searching for a trusted realtor. Certain situations can arise during the process that gives your realtor an opportunity to cut corners or focus more on their own financial gain than yours. Here are a few realtor conflicts of interest to look out for.

Realtor Conflicts of Interest: 5 Things to Watch Out For

Let's face it; buying and selling property can get exhausting — especially when going it alone. Between setting the right price for your home, hosting and attending open houses and negotiating, you'll be left wondering if you're doing everything in your power to get the best deal possible.

So, naturally, your instinct is to find a real estate agent to help offset some of the stress and burden — but are they working with your best interest at heart at all times? Finding a trusted realtor may be trickier than you'd think.

Some agents have been around the block a few times and know how to wiggle their way around their clients to make sure they come out on top. Some exhibit unethical behavior or other read flags in a real estate agent.

Here are some realtor conflicts of interests to be wary of when finding the right buyer's agent or choosing the best seller's agent.

1. Dual Agency

Dual agency means that the listing broker represents both the seller and the buyer in the same real estate transaction.

Dual agencies are a rare occurrence in real estate. This is because the job of a real estate agent is to look out for their client's best interests — which can pose as a challenge if they are representing both sides.

When you buy a home, you want to secure the best property and negotiate the lowest price possible. A good buyer's agent will also push for the seller to cover most of the repairs found during inspections and the closing costs.

The opposite is true for a listing agent, however. Their duty is to get their client the highest possible price for the home and ensure that the buyer pays for the repairs that come up during inspections, as well as most of the closing costs.

So you can see the major conflict of interest that is usually present in dual agency deals. There is no possible way that the realtor can fully serve the needs of both the buyer and the seller without running into roadblocks along the way.

2. Highballing Your Home's Listing Price

For realtors, this is the oldest trick in the book. Naturally, every seller wants to think that their home is worth more than it is — but listing at too high of a price can lead to serious repercussions.

While a good agent will give you an honest estimate of the fair market value, and be willing to explain why the price is less than you hoped it would be, a dodgy real estate agent will gladly tell you your home is worth more than any other on the block.

Unfortunately, once it comes time to find interested home buyers, no one will give it a second glance if it's set at an unreasonable price. The most significant problem in such a situation is that you will probably get less for your home by overpricing it than you would have by pricing it competitively to begin with. An overpriced home sits on the market, gaining a stigma and leading buyers to assume there is something wrong with it.

When you finally do decide it's best to reduce the listing price to what it should have been all along, you may find it hard to even then to grab a buyer's interest. Oftentimes, they'll only come in after you reduce the asking price yet again — when it looks like too good a deal to pass up.

History shows us over and over again that homes that are accurately priced from day one sell for the most money. In fact, in a strong seller's market, you may wind up getting multiple offers over asking price. If you overprice your home, on the other hand, you probably won't see any bids.

Do yourself a favor and get a comparative market analysis (CMA) from multiple agents. If one real estate agent is giving you sky-high figures, rest assured they are lying to you.

3. Forcing an Open House

Is your home going to sell after an open house? The short answer is probably not. It's not likely that you'll be pulling the "for sale" sign out of your yard at the end of an open house.

And since they don't typically lead to a sale, there are plenty of arguments against the open house. If you are living in the space at the time of the open house, it can be a major hassle to prepare for the event. Arrangements need to be made, and personal and valuable items need to be removed. Prepping for an open house is extremely time consuming, even if your agent is doing most of the actual showing.

Living in the age of the internet, many people wonder what is the point of an open house anymore. Most properties are online before the first open house is even scheduled. Prospective home buyers are able to view real estate photography and information about the property and contact the agent if they are interested. For many people, this makes the open house completely irrelevant.

So why do realtors push open houses so much? Often with open houses, other sellers will come by to compare home features, strategies and asking prices of similar homes. A lot of times, those sellers are in need of a realtor to represent them, and agents use this as an opportunity to get even more business for themselves.

Unfortunately, that business rarely includes actual buyers for your home. Statistically speaking, only around 2% of all sales come from an open house.

You don't need an open house to sell your home. More importantly, you don't need an agent who makes an open house the focus of their marketing efforts.

4. Skipping the Home Inspection

Exceptional real estate agents go out of their way to do their best for a client. A good agent needs to be ready and willing to represent you at all the right times, which certainly includes the home inspection. Your listing agent should, without question, be at the home inspection representing you.

Unfortunately, it is a common practice for listing agents to skip out on the buyer's home inspection — but don't let this happen to you. The buyer's agent is almost always at the home inspection, and you should insist that your agent is present.

5. Being "All Talk" Without Results

Even the worst agents can still be useful sales people — capable of chewing your ear off about what they will do for you, the results they will get and how smart it is to hire them. But a bad agent will often fall short on those promises.

Your agent should be busy selling your home, which means they may not be available every time you call (but should, of course, call you back when they are able to). However, a bad agent may rarely return your calls in a timely fashion, fail to tell you about important issues with your sale, and just be bad at communication.

A bad realtor may also promise comprehensive real estate marketing, including a website, social media, video tours, professional photography, and brochures, but then only pursue a few of those channels.

Today's buyers expect clear, flattering images and often professional quality video tours. The agent may say they are able to deliver these things, but later you find that the listing includes blurry pictures and poor quality video — not acceptable practice in our books.

Buying and selling a home nowadays requires a lot of hands-on maintenance, and you're undoubtedly going to need reliable assistance from a trusted real estate professional.

Now that you know what qualities and tactics to avoid in a realtor, you're ready to find the perfect match. That's where Clever comes in. Clever agents always act in your best interest to ensure you land a stellar deal. Find vetted agents in your area.

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