Below is a list of common scams or unethical tactics that some real estate agents might use to make more money when selling a house:
Dual Agency Conflicts: Acting as both the buyer’s and seller’s agent without disclosing the conflict of interest. This can lead to both parties getting less favorable deals, as the agent is prioritizing their own commission.
Inflating the Asking Price: Overpricing a property to attract a higher commission, even though the market won’t support the price, leading to a longer time on the market or eventual price drops.
Lowballing Offers for Personal Gain: Agents may convince sellers to accept a lower offer by claiming it's the best they’ll get, then flipping the property or reselling it at a higher price later.
Bait and Switch Listings: Advertising a desirable home that’s already sold or unavailable to attract buyers, then steering them to other, less desirable (and often higher-commission) properties.
Undisclosed Repair Issues: Hiding significant property issues (like structural damage or faulty systems) that would lower the price or scare off buyers to secure a quicker sale and commission.
Pushing Unnecessary Repairs or Renovations: Suggesting unnecessary expensive updates, claiming they’ll increase the home’s value, while they actually just increase the agent’s commission on the sale price.
Fake or Shill Bidding: Creating false interest in a property by having fake buyers (or themselves) place bids to drive up the price in competitive bidding situations.
Pressuring Quick Sales: Urging sellers to accept lower offers by creating a false sense of urgency, claiming the market is slowing or that no other offers will come in.
Kickbacks from Service Providers: Referring clients to specific inspectors, contractors, or mortgage brokers who offer kickbacks to the agent for steering clients their way, often without disclosing this arrangement.
Misleading Marketing: Using deceptive language or photos that misrepresent the property, making it seem more valuable or attractive than it really is to get higher offers.
Hidden Fees: Adding hidden or unnecessary fees (such as marketing fees, transaction fees, or “administrative costs”) to the final bill, which are not clearly explained to the client upfront.
Fake Appraisals: Colluding with appraisers to inflate a property’s appraised value to justify a higher selling price, even if the home isn’t worth that amount.
Manipulating Offer Timelines: Delaying submission of offers from buyers to create a bidding war or manipulate the timing to favor certain buyers (such as those offering a higher commission split).
Misrepresentation of Property History: Lying about the home’s past ownership or sale history, including failing to disclose foreclosures, legal issues, or prior sales at significantly lower prices.
Encouraging Illegal Practices: Suggesting ways to hide money, avoid taxes, or falsify paperwork to make a deal look better on paper, which could cause legal problems for the buyer or seller later.
These scams, while unethical and sometimes illegal, do occur in the real estate industry, so it’s important for buyers and sellers to stay informed and vigilant.