Hi All,

Lately I have been hearing things around the Real Estate water cooler about Real Estate Rip-Off’s which I don’t like one bit. I decided I needed to do something about it. I think it is time someone pointed out some of the Real Estate Rip-Off Tip-Off’s. In my opinion, these are all sure signs that you are about to be ripped off during a real estate transaction. So, here goes…

1. The Agent you hire asks you for cash up front. Agents on both sides of a real estate transaction get paid on commission only basis at the successful conclusion of a transaction. While it is not unheard of or unethical to have an agent charge a fee for services outside of those usually associated with a transaction (notary or staging) having an agent ask you for one thin dime before the transaction is completed or having them ask for fees that are in excess of those which you agreed to contractually is a big Rip Off Tip Off.

2. The Agent you hire is not really an agent. In California unless you are selling property you personally own as a for sale by owner, you must have a valid Real Estate License issued by the Department of Real Estate (DRE) in order to legally assist buyer’s or seller’s in real estate transactions. Before you sign on the dotted line, ask to see proof that your agent has a DRE license. They should be able to produce a DRE number for you or, even better, a small wallet card that was sent by the DRE to them. Then, do your homework, go on the DRE website and check them out. See if they are current and have no skeletons in their closets.

3. The Agent does not have a Supra Key. The Supra Key is the defacto way that responsible agents give other agents access to their client’s homes. Not having a Supra Key tells you that the person you are working with is not really a real estate professional and probably either is not a Realtor, or may not be in good standing at their real estate board. Not being a Realtor means that, among other things, they may not subscribe to the Realtor’s Code of Ethics, or that they may be doing real estate “part-time”. This is going to be the largest financial transaction you will probably ever be involved with. So, why would you want to work with someone who, from the get-go, is sending up a big red flag that they may not take your transaction as seriously as you do?

4. The Agent Guarantees That They Can Short Sell Your Home. No one can guarantee that a short sale can or will take place. All an agent can guarantee is that they will do everything in their power to help make sure that the lender gets whatever they need to encourage them to allow the short sale to take place. It is ultimately up to the lender to decide if they want to allow the sale or if they don’t.

5. The Agent Recommends That You Stop Making Your Mortgage Payments. A reputable agent would NEVER suggest that you stop making your payments. Simple as that. If the Agent tells you to stop so that they can do a short sale for you, run, don’t walk for the door. A short sale should be, and must be the very last resort after you have tried everything else, not instead of trying other options.

6. A short sale is suggested by your agent who knows you own more than one property, have money in savings or equity in your home. This is short and sweet, if you are not upside down on your loan with no equity and no other assets available to you, no short sale, period.

7. Your Agent communicates with you in one language but presents documents for you to sign in another. If your only communication with your agent is in any language but English then the documents you sign must be written in the language you communicate in. Spanish spoken, Spanish signed, Chinese spoken, Chinese signed. Bottom line – if you can’t read it, don’t sign it.

8. You don’t receive copies of everything you sign when you sign them. One of the things that you are agreeing to when you sign your real estate contracts, no matter which side of the transaction you are on, is that you have read and understood the documents you are signing. If you don’t understand what you are being asked to sign, ask for an explanation and don’t sign until you understand. If you sign a document and don’t immediately receive a copy be sure to ask for one. If the agent has not brought an extra copy for you (as any good agent should) take a road trip to Kinko’s or run the documents through your own scanner at home, just make sure you get a copy – and read it!

9. Your agent never returns calls. If they won’t call you, their client back, what makes you think that they will call anyone else back? I can’t tell you how angry it makes me when I place repeated calls to an agent in order to set up a showing of their listing for my clients only to get no response or a call back days late. If they are not taking the calls and they are not making the calls they are not doing a big part of their job.

10. Your agent INSISTS that you must use a certain lender, or the lender INSISTS that you must use a certain agent. Let me be very, very clear here – there is NOTHING wrong with your agent providing information to put you in touch with a lender. And there certainly is nothing wrong with the lender you trust offering you a referral to an agent. The Rip-Off Tip-Off comes when the agent or lender implies or flat out states that the only way you can have a successful transaction is if you work with a specific person. You as the client should ALWAYS have the final say in who you choose to work with.

If your loan, sale or purchase is tied to using a specific agent, and if the agent is not YOUR CHOICE don’t use them.

These Rip-Off Tip-Off’s are just that, tip-off’s, so, while they don’t guarantee that you will be ripped off, they can all be things that should put you on your guard. I can only give you advice, it is ultimately your choice and your responsibility to decide what, or who you want to listen to.

Take care & have a wonderful day!

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5 Responses to Real Estate Rip-Off Tip-Off’s – Sure Signs You Are About To Be Ripped Off During A Transaction

  1. Great tips. Love the one on the ” If the lenders forces you to use a Realtor and vice versa. I love when a new home sales agent tells the customer they will NEVER EVER get the closing cost incentives unless they use their preferred lender.

    If you aren’t on Active Rain, you should be!

  2. Hi Uptight Mortgage Guy,

    Thanks for the kudos. I agree. Oh, and I am very happily on Active Rain – In fact, I am the number one agent in Claremont and one of the top voices in Los Angeles County and California. I have just not been as prolific there as I had been in the past. Thanks for stopping by and have a great day!

    Tisza

  3. Glad to see you posting again Tisza.

  4. Great post Tisza! You may have inspired my next post!

    Did Project Blogger wear you out like it did me? I’m finally getting back into the swing! While fun, it was a draining experince!

    ~Julie

  5. JHRealtor says:

    Retainer fees for all of the incidentals that Realtor incur are becoming industry standard. How many times has a Realtor shown a buyer dozens of homes, only to have them “change their mind” out of the blue OR they go behind your back and buy from another Realtor? Too many! I expect to be compensated some small bit for the gas and time wasted. The retainer is returned to the buyer upon closing. Reasonable buyers understand this.

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