Buying and selling real estate can be easy, it can also be very complicated. Making the right choice as a home buyer and getting all your ducks in a row as a home seller is also very difficult. For these and many other reasons, people hire Realtors. But, how can you know for sure that your Realtor isn’t drinking the same Kool-Aid that lots of other agents drink.
I’ve put together the some common deceptions used by Realtors. I must warn you, this may invoke a bit of discomfort if you’re already working with a guy or gal who’s uttered one of these fibs, if they were in the right context, then chances are they’re trustworthy…out of context could cost you years of your financial future!
Lie #1- “The Seller Pays the Commission”
Probably the most common Realtor lie. While technically true, the seller does pay the commission, but they just raised the price of the home to cover the cost in most if not all circumstances. Don’t be fooled, you, as the buyer are financing the entire commission!
If you’re buying a house, the good news is that you don’t have to cough up a payment for an agent, unless it’s a situation where the seller has not agreed to pay for a buyers agent — a situation sometimes found with For Sale By Owners (FSBO’s).
The reality is that there is cost to doing business and a good real estate agent can save you far more money than they cost. Ditching a good agent to save the small fee will cost you more in the long run.
So if you agent tells you that you don’t have to pay them, they’re not being truthful!
Lie #2- “You Can Write Off Your Interest From Your Home Loan”
…continued with: “So, you’re loan payment is $1500, but after taxes and deductions etc. it really only feels like $1100″. This generally always followed with, “But you’d better check with your tax adviser.”
Almost EVERY real estate agent and loan originator have been a part of the Mortgage Interest Deduction Hustle. The Federal Government does allow you to write off any interest paid on your loan, if you itemize on your taxes.
NOTE* It may not necessarily be to your advantage to itemize on your taxes, and if you do, there is no guarantee that you will get any type of savings or that “paying more actually feels like paying less”.
Lie #3- If You Can’t Sell Your Home For What You Ow On It, Do a Short Sale
A lot of agent’s feel comfortable telling their clients to stop paying on their mortgage so they can do a short sale. This has probably originated from the rash of $50 “Short Sale Expert Trainings” at the Holiday Inn.
The truth is, most banks will allow short sales as an option to getting rid of your toxic asset liability — but generally not until you have missed payments, which is why agents suggest missing a few payments.
What the agent isn’t telling you is that it can take up to a year or more in a bad scenario short sale to get the banks full cooperation and get the home sold. This has left multiple 30 day lates (or even 120+ days late) on your credit rating which may not matter to you now, but in the future, lenders may not differentiate between a foreclosure and a short sale because of so many late payments.
There’s also the issue of a deficiency judgment, or getting stuck with having to pay off a portion if not all of the amount you were short.
Best case for you is to talk with an attorney BEFORE you talk about selling. Find out your options and leave the Realtors out until you’ve gotten good council and know your best option.
Lie #4- The Real Estate Market Has Hit Bottom
What agent hasn’t said that? What’s more, if agents think that a couple of months of reduced inventory and a small rise in prices and increased home sales is the foundation to recovery, they’re crazy. Economies are far more complicated than that and since when did Realtors have a crystal ball and where was it before the collapse?
As I’ve said before, some markets are doing well while others are crashing and some are crashing while others are doing well. Markets are local and can be as isolated as a particular street. Without thorough examination, there is no way to tell if your market is on the rebound (whatever the heck that might be)
Some people including many Realtors want to see a rebound in the real estate market so bad that they are willing to take fairly insignificant stats out of context or out of the bigger picture and make fairy tale realities for their clients.
Listen folks, until people get jobs, the market is still in the tank. A spike in pricing, increased sales, and lower inventory are good things, but they are shallow indicators of a healthy economic reality.
Buying and selling should be based on what suits your family needs and goals, not solely on what the market is or isn’t doing.
There are certain areas within Boise where real estate will always do well and pricing while compressed and sales down, have more sustainable value and worth than their speculative counterparts. If you’d like a list of those areas, just let me know 
.
Conclusion — Work with an honest educated agent!
Finding an honest educated agent isn’t easy. When the Boise real estate market was hot, there were schools that were graduating over 100 agents per month into the Boise area!
The best way to find an honest agent who is look out for your needs it to call me! Honestly 
! If you don’t want to do that, then you need to interview agents to find out what they’re about. They need to have a good grasp of the market data, know how to negotiate, and most important, they need to be able help you look out for your goals!
For a list of references and testimonials from past clients, shoot me an email or give me a call!
In the mean time, don’t forget to subscribe to my blog!
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I agree with you that housing hasn’t bottomed out yet. It will also be interesting to see how much rates go up over the next year which could be a huge damper on housing as well.
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