Why do people have trust issues with real estate agents? It's because they sell, sell , sell. According to a survey about how consumers rate the trust worthiness of different professions real estate agents come in lower then lawyers and somewhere close to gun dealers. I think lawyers come in higher because people know they can at least trust their own lawyers but people aren't sure if they can even trust their own real estate agent.
The problem is agents are taught to be sales oriented, they strive to be included in the $1M, $5M, $25M dollar clubs, etc. They define themselves as sales people. And how does the public view sales people? If you define yourself this way you are bound to alter your behavior to mold to it. This creates an incentive for agents to close deals. And way to often to do what is easiest and maybe best for the agent.
I teach real estate classes for new agents and in my last class a new agent told the following story. She is stuck with a $500,000 hard to sell home. It's listed and a buyer wanted to rent it for 18 months and then purchase it. He put down a $5,000 deposit, which he will get back if he closes. If he doesn't he is out the money. Each agent is holding $2,500, which they will keep if the deal doesn't close. When the seller asked why they get the money she was told, "this is standard practice and how things are done".
What they should have said was the truth, which was "We have earned a $15,000 commission but won't get paid for 18 months. Do you think it is appropriate to get a partial payment of $2,500 now and the balance at closing?" That would have been honest and appropriate.
Instead they put their own best interest ahead of the sellers. They manipulated the deal for their own benefit and to her detriment. I can only assume they aren't devious or anything like that. I honestly think they thought they were doing what was right. but that is the problem. They accept this as the standard for what is normal.
Do you have any good stories about real estate agents?
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