10 Things Your Real Estate Broker Won't Tell You
When Americans were asked to rate various professions for honesty and ethical behavior in a recent Gallup poll, real estate brokers rated higher than United States senators, but not by much.
And yet, whether you're buying a home or selling one, brokers probably won't lie to you, or almost never. They just don't tell the whole truth. It's the nature of the profession: Sunny side up, all the time.
Below are 10 useful things to know that your broker won't tell you bluntly when you're buying a home – and when you're selling one. (For tips on finding a good broker, see 6 Questions Before You Hire A Real Estate Broker.)WHEN YOU'RE THE HOME BUYER…
Cozy means dinky.
A real estate listing is an exercise in the delicate art of euphemism. If a home is dinky, the preferred term is cozy, but the broker may have a fanciful fit. If a home is described as a honeymoon retreat, a fairytale cottage or a perfect first home, it's dinky. If there's room for the baby (singular), it's dinky. As you pore over the listings, automatically translate each phrase into plain English. A house that is lovingly maintained has 40-year-old appliances and orange wall-to-wall shag carpeting. A place that has great potential is a dump, and it smells bad.
Silence is meaningful.
Any obvious omission from a real estate ad, visual or textual, is probably deliberate. If the master bathroom is not pictured, it's because it's hideous. If the school district isn't identified, it's sub-par. Learn to read between the lines, and ask questions to fill in the gaps. Otherwise, you'll waste time looking at houses built under railroad overpasses.
A listing is easy to fake.
It has always been easy to fake a real estate listing, but the web makes it foolproof. A good broker will detect this. But if you see a great listing, and the broker tells you the home has just gone into contract or is otherwise no longer available, the listing may have been designed just to bring in prospective buyers. If you don't like having your chain yanked, be wary of this broker in future dealings.
Some defects are not ‘material.'
Brokers are obliged to inform prospective buyers of any material defects that a home is known to have. Later, the home inspection may alert you that the furnace is about to blow. Your mortgage provider may also look for red flags.
But in the end, you are the one who cares most about this deal, and you need to do your research on the house, the neighborhood and the town. Nobody is obliged to inform you that the house next door is a crack den, or that the town may triple taxes next year to make up a budget shortfall. What's more, under fair housing laws, brokers are specifically prohibited from answering questions like what kind of people live in this neighborhood or discussing schools in the area.
The web is your best friend here, and sites like Trulia.com can help with your research. But to get the real scoop, knock on doors and chat with your prospective neighbors. They'll tell you what nobody else can or will.
The broker is not working for you.
This is no big secret, but in the midst of a charm offensive it's hard to keep in mind. The broker earns a commission from the sale of the property. It's in the broker's interest to present it in the most attractive way possible. Only you will bring skepticism to the table.
You need to keep your shirt on.
Your first meeting with a broker is a sales pitch from a pro, plain and simple. The objective is to get your listing. Brokers need a steady supply of new product, so that their mug shots and names can appear in the agency's advertisements. You'll hear only the best spin on the market in general, and your home in particular.
Consider this meeting to be an audition for a salesperson you're considering hiring. The actual script may well change down the road.
Euphemisms are important.
Brokers have to charm, so they may merely hint at issues that are actually critical to the sale. If a broker recommends a professional cleaning, it means that your family is a bunch of slobs and your house smells. If a bit of staging is suggested, it means that your home decor is outdated, cluttered or otherwise off-putting. Their advice, however delicately expressed, could be vital. (See Is Professional Home Staging Worth The Cost?)
Maybe you relate to young and hip, especially if that's the kind of neighborhood you live in. But when it comes to selling your house, an experienced agent knows the market and the area, knows how to price and market your property, and can advise you how to prepare it for showing. Down the road, the broker will represent you in negotiations and can make or break the deal. In real estate deals, experience counts.
The broker's commission is negotiable.
The standard commission is about 6%, but that figure is not carved in stone. It would be unwise to lowball the broker for no good reason at the start of your working relationship. During the give-and-take of contract negotiations with a buyer, the broker might be willing to give a little, too, to seal a deal.
Brokers are human, too.
Like all salespeople, brokers have to be on their best behavior, even while quietly filing away horror stories to share with their peers. That said, if you treat your broker like a serf, you can't expect the level of commitment that a thoughtful client gets. As your broker could tell you, a little charm goes a long way. (And remember these 7 Things Your Real Estate Broker Wants You To Know.)
Above all, remember that a broker is a sales professional working on a commission basis. They are always upbeat and enthusiastic, or if they're not, they have to fake it. Your role is to stay grounded.
For more on working with brokers, see Do You Need a Real Estate Agent?