Do you recall the Oscar winning film American Beauty about Lester Burnham a middle aged, married and depressed marketing executive who has a mid life crisis and drops out of the rat race to enjoy a far more enriched lifestyle? Mrs Burnham meanwhile is infatuated with the rat race and particularly with Buddy Kane the self proclaimed ‘King of Real Estate’ who is a slick real estate agent.

Do I need to go any further in this introduction of some of the Dark Arts that many real estate agents will use against both the potential sellers and buyers? Rather surprisingly many real estate agents just don’t even know they are practicing these dark arts because this is how their industry has always done things.
When lists of the ‘dark arts’ of any profession normally go to 10,
real estate agents can go just that bit worse to 11.

1. Agent’s Secretive Sales Fees.
   Ever noticed how the majority of real estate agents do not publicise their sales fees?
   Nor will they disclose their fees by email or simple phone enquiry. Most real estate agents will have different sales fees. Often they won’t reveal their sales fee until they have a physical meeting with the potential seller, in private at their office or in the privacy of your own home. Worse the sales fee is often dreamt up on how much they think they can extract from each individual client. So if you appear gullible and you have an expensive watch on your wrist then the sales fee will be considerably more than for a client who appears very savvy and has a desirable property.
   A sales fee based on a percentage of the sales price should not differ from one property to another nor should it differ from one client to another. In our opinion it is hard for any real estate agent to be able to justify a sales fee greater than 2% unless the seller likes contributing towards the agent’s High street shop and Mercedes Benz.
   
   
2. Agent Prospecting Prior to Being Instructed.
   When ever you decide to choose professional services you are always advised to get at least three quotes from different professionals. So you invite an agent around to give you a free, no obligation valuation of your house and their opportunity to pitch to you their services and fees. Shortly afterwards an agent who you asked to value your property contacts you to say that just by chance they have a potential buyer who is looking for exactly your type of property in that exact area, if you are interested? This is a sales tactic that harks back to the days when sales professional would stand at your front door and on opening they would put their foot in the door to stop you closing the door. Be very aware of foot-in-the-door techniques to persuade you to do what best suits the agent.
   
   
3. The Ambiguous Locations.
   An agent advertises a property with an ambiguous location as being 10, 15, 20 minutes from a named village or town, or as you’ll regularly see, distance from an airport. This is so when a potential buyer contacts the agent about a specific property because they like a certain feature, the agent then starts recommending all their other properties within those catchment distances even though you are already well aware of most of the properties on the open market. It’s a tactic used by an agent who believes they can persuade a potential buyer to buy any one of his properties in the area that the potential buyer showed an interest in.
   
   
4. Ghost Properties.
   How often have you enquired about a property to be told by the real estate agent that the property has just been sold? It’s a tactic to get your initial contact details so they can then start pressing and trying to persuade you to buy one of their other properties and usually a property that is above the asking price of the ghost property. Buyers should never pay any buyer’s fee. Don’t allow an agent to move you from enquiring about a specific property to verbally instructing them to be your buyer’s agent, one way or another the agent is trying every trick possible to maximise the fees he can generate from a single property.
   
   
5. Asking your Budget.
   A potential buyer enquires about a property with an asking price for say €150k, so why does the real estate agent fairly quickly enquire about your budget? The fact the potential buyer is looking at €150k properties is surely a good indication of their budget. Most real estate agents are not interested in selling a specific property. They are interested and often instructed by their seniors to find out a potential buyers maximum budget and try to steer that buyer towards the highest value property they can. The agent is focused on the commission from the sales fee and in many estate agencies, performance is measured on monthly sales commissions. If the agent isn’t bringing in enough euros compared to their colleagues then they get replaced by the next sales person masquerading as a real estate agent.
   
   
6. Agents Instilling an Urgency.
   Watch out for agents trying to tempt you with a property that isn’t yet on the market, or a property that belongs to an exclusive viewing collection. These are tactics to try and make a potential buyer feel they have a unique opportunity to snap up a bargain early without other competition. There are no such opportunities. They are more foot-in-the-door techniques employed by sales people. Don’t be fooled into thinking you are the only person being given such an offer or that there is any restriction to exactly how many people can join such an exclusive group. Imagine a seller being aware that their property has been limited to a very select few exclusive viewers. These strategies are to try and get a potential buyer to make a hasty decision into making an offer that they may later regret.
   
   
7. There’s another Interested Party.
   Just as you the potential buyer shows a genuine intention of making an offer, the real estate agent informs you that out of the blue there is another interested potential buyer. They will often advise you to slightly increase your offer or make your offer as quickly as possible. If the sudden existence of this other potential buyer were true then the agent would be telling that potential buyer exactly the same tale they are telling you.
   
   
8. Offering In-House Legal Services .
   Never ever accept the services of any professional that has been offered by the Estate Agency. That professional will be acting in the best interests of the real estate agent getting their sales commission first and foremost.
   
   
9. Collaborations and Networks with other Agents.
   Real Estate Agencies often try to suggest that by collaborating with other agents they can increase the potential interest in a property. The real explanation is that the agent recognises that it would be better to get a smaller shared percentage of a sales commission rather than risk getting no sales commission at all, if only he collaborates with a second agent. Ultimately the sales commission will be higher than it needs to be because the sales fee is being shared by two estate agents.
   
   
10. Viewings To Offer Ratio – VTOR.
    VTOR is a real estate terminology rather than a dark art itself. As a seller you should be very much aware of how this ratio affects the sales fee you will be quoted. A dark art of real estate agents is their belief that if they can just get a potential buyer to physically visit a property, then the agent can use their powers of persuasion to convince the potential buyer to make an offer. Sales professionals who believe they can sell anything will invariably be bringing numerous potential buyers to view a property yet may need up to 20 viewings to achieve 1 sale. Thus the sales commission they demand from a seller reflects the agents overhead costs and expenses of an increased number of failed viewings.
    
    
11. Advising a seller to reduce their Asking Price.
    The agent persuades you to market your property with them because they love your property and they really like you. They’re confident they can sell for a significantly greater value than you believed your property is worth. Months later, the agent recommends reducing your asking price to generate more interest. You need to be mindful of what you the seller and the agent stand to loose by their recommendation to drop the price so easily. The agent will loose a few hundred euros, whilst the seller will quite literally loose tens of thousands of euros. The agent’s overall commission being hardly affected. This is a particularly hard pill to swallow for the seller because the lack of interest in the property has very likely had more to do with bad marketing techniques by the agent rather than the asking price.
    

Always remember the average real estate agent is not your friend. They are a sales professional using every trick in their tool kit to persuade you to use their services whether that’s to sell your house or persuade you to buy one. If the real estate agent leads you in to believing they are giving you extra special treatment, beware they are doing exactly the same for all their other potential clients.

Much of what is known about the world of real estate is self generated by real estate agents themselves. If you search the internet with terms like ‘what not to tell a real estate agent’ or ‘real estate agent tricks’ etc then you’ll find others giving you the same cautionary insight into how real estate agents can behave.

Flamenco Properties doesn’t need to practice dark arts because we do things differently