THE REAL ESTATE BEAR TRAP
by Neil Jenman
Article written and provided by Neil Jenman from Jenman.com.au . To see the original source of this article please click here. https://jenman.com.au/the-real-estate-bear-trap/. Neil Jenman is Australia’s trusted consumer crusader. He can support you, all the way, from choosing an agent who will get you the highest price guaranteed to when your removalist comes! You get an unprecedented level of total support. All for free. To find out more visit jenman.com.au
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When you sell your home, an agent will ask you to sign an agreement. That’s if you choose to use an agent; if you knew what most agents do, you’d do what most sellers should do – sell your home yourself and get a better price at a much lower cost.
But that’s another topic.
Right now, let’s say you’ve decided to sell with an agent. You’ve interviewed a few agents and selected the one you dislike the least.
Be careful. Stop. Think about it. Just for a couple of days. For your own sake.
If you do not slow down and think, you will do what most sellers do, step into the real estate bear-trap. And many sellers bitterly regret doing so.
The bear-trap is how agents lock-you-up, take control of you and the sale, charge you needless costs, slug you thousands of dollars even if your home fails to sell, sue you if you challenge them, pocket kickbacks from service providers, lodge a caveat on your home if you refuse to pay their obscene charges, and basically strip you of your fundamental consumer rights.
Don’t believe me? Think I am exaggerating?
Okay, try this: Before you sign-up with any agent, take their agreement to your solicitor and get a legal opinion. It’ll be the best couple of hundred dollars you’ll ever spend.
I can almost guarantee you this: No self-respecting solicitor will urge a home-seller to sign the listing agreement most agents ask sellers to sign. No way.
Agents will tell you that, by law, they cannot sell your home without a written agreement.
And that’s true.
But it doesn’t have to contain all the ‘nasties’ in their agreement. You can delete whatever you wish to delete – if you know what you are doing.
Although they make it seem harmless by telling you that it’s a “standard agreement” or that it has been “approved by the real estate institute”, that doesn’t mean it’s safe for you.
And it certainly doesn’t mean you should mind-numbingly sign it because an agent – who you probably met less than an hour ago – tells you to do so.
It’s your house, keep control of what happens. Be strong. Stand up for yourself.
Just consider what you do if you sign-up with an agent. You are giving up control of your biggest asset. To a near-stranger. After barely reading a document shoved under your nose.
I believe more than half the home-owners who sign-up with an agent never read the agreement before they sign it. At best, they glance at it.
In a world where dedicated doctors and scientists are scrutinised and criticised for trying to keep us physically healthy, consumers sign over the rights to their most valuable asset to estate agents who sole goal is sell their home at any price and enrich themselves to the max. It doesn’t make sense. We distrust those who deserve our trust and trust those who don’t deserve it.
It’s time to think more carefully about so much of what we do in our lives.
Think about it. Yes, those three words can save a lot of pain and a lot of money. Think about it. Don’t sign-up blindly. Wait. Another few days won’t hurt.
Less than one person in a hundred ever says what all home-sellers should say: “Please leave this agreement with me and I will have it checked out and get back to you.”
Unless you have real estate experience, unless you are a legal expert, then please, for your sake, DO NOT SIGN-UP with an agent without getting help from someone who places your interests first.
The agent’s agreement might be “standard”, but it does not make it safe. Nor does it make it right. As for being approved by the real estate institute, that’s laughable – the institutes have one purpose: protect the interests of real estate agents.
Those real estate agency agreements are designed by lawyers who were told: “Protect the interests of real estate agents.” Not the interests of sellers.
Who protects your interests?
As you are reading this now, you may be thinking that you won’t get caught.
But the only way you can guarantee that you won’t put your foot in the real estate bear trap is not to sign their agreement the first time they ask you. Get it checked out.
Find someone who cares about you.
If not, if you are so naïve to sign a legal document that means you lose complete control over your biggest financial asset, terrible things can happen to you.
If you think I am trying to frighten you, you’re darned right.
Almost every day, I am contacted by people who have signed-up with an agent too quicky and bitterly regret it. They had no idea of the pain that comes from stepping into the real estate bear trap – or how hard it is to get out once you get in.
Take your time getting in, otherwise you will find it impossible to get out for months.
Here are ten nasty things that happen to thousands of sellers who sign one of those “standard” real estate selling agency agreements.
- You can’t sell your house in any manner with any person at any time during the agreement without paying the agent. If your best mate wants to buy your home, too bad you must pay the agent. If one of your family members, your parents or a sibling want your home, too bad, pay the agent. If your neighbour wants your home, too bad you must pay the agent. Even if the agent has not done any work, not even lifted a finger, too bad, you still must pay the full commission if anyone buys the home.
If the agent quoted you an estimated sale price before you signed-up and then, after you signed-up, the agent starts talking you down in price with excuses such as: “This is what the market is saying,” too bad, you must wear it.
If you discover the agent misled you, too bad, you must stay with the agent.
If you don’t sell because you [rightly] refused to drop your price, the agent can send you a bill for several thousand dollars, purportedly for “marketing costs”. If you tell the agent to get lost because you were misled by their false quote, too bad, the agent can put their solicitors on to you.
The agent may place a caveat on your home which prevents you from selling your home without paying the agent to lift the caveat. It’s unethical, yet many of the self-called “top agents” place caveats on homes of sellers who stand up to them.
If you eventually sell your home months after your agreement with the agent – and the buyer of that home had once inspected it with the agent – you must pay the agent the full commission. Never mind that the agent failed to sell the home to this buyer, too bad, you will have to pay two commissions, one to the first agent for showing your home and failing to sell it and one to the second agent who showed your home and sold it. This happens to sellers all the time.
If any of your possessions are stolen at open-inspections or your home is burgled later because the agent failed to qualify who entered your home, too bad, your loss.
If the agent bad-mouths your home in the district and damages its value, too bad, you just must wear it. No agents ever say, “The reason the home did not sell is because I am not a good enough agent.” Of course not, they always blame the sellers. You were too greedy, or your home was not good enough. No matter what they say or do, you just must wear it. It’s your punishment for not dropping the price so that the agent could more easily pocket a fat commission.
If another agent genuinely has a buyer for your home, the agent with whom you signed-up will tell the other agent to get lost. Unless you pay two commissions.
– If the agent fails to sell your home and rips you off horrendously and does great damage to the value of your home and you try to leave a bad review on RateMyAgent, it will not be accepted. Happy sellers only, thank you on FakeMyAgent.
Then you will realise what a joke this real estate industry really is.
No, the joke might be on you. But that’s only because you stepped into that bear-trap. If you had said to the agent, “Wait, I am not signing anything without getting advice from someone who will protect my interests,” you would have been safe.
If your foot is hovering above the real estate bear-trap – in other words, you are about to sign-up with an agent to sell your property – STOP! Contact us and send us a copy of the agent’s agreement. Just email email@example.com.
We will have a lawyer check it out for you and delete all those nasty clauses. You will not be charged for this assistance. Our aim is to protect you – and help you get the best result.