Two types of Real Estate Agents

To make things simple, we can categorize agents into two types. Real Estate Agents make money in the same way any commission salary based salesperson does.

The first type is the honest agent with the belief "If I work hard and treat my buyer with respect and honesty, the buyer will come back to buy more homes from me." These agent work by referral and they have a conscience.

The second type is the "I need to get the buyer to buy a house quickly so that I can move on to the next buyer (sucker) so that I can maximize my time for profit." These agents look at the commission and only care about getting it. Honesty and integrity does not matter to them.

The bottom line is that you are looking for the first type and you want to avoid the second type.

We'll call the first type, the Good Real Estate Agent.
We'll call the second type, the Bad Real Estate Agent.

So what kind of characteristics does the Good Real Estate Agent have that the Good Real Estate Agent does not have?

1. The first characteristic is Patience.
Bad Real Estate Agents will attempt to sell you a home quickly to get the money quickly. Do not buy a house without spending a lot of time looking at several different homes. Be careful of tactics such as Real Estate Agents claiming the house is the perfect and acting like a salesman rather than providing you with useful information. Bad Real Estate appear to be patient, but if you ever feel he need to go fast probably because you beleive the house is an awesome deal, then most likely, the agent has successful tricked you into moving quickly.

2. The second characteristic is information.
A Good Real Estate Agent needs to provide you all the information to let you make the informed decision and we are not talking about their opinion. Real Estate's opinion does not matter. Real Estate Agents have data such as the history of the house being sold at, homes being sold near the area and type. A Real Estate Agent should be able to provide you with a compilation of official documents that tells you these kinds of data to let YOU make an informed decision.

3. The third characteristic is care.
You will know this during the actual signing of the contract to purchase the home at a certain price. Once you become interested in a property and want to buy the property at a certain price set by YOU, you have to write up a contract. The contract consist atleast three conditions that will null the sale of the home and a security deposit.

The common three conditions are, buyer can get financing, the home passes inspection and the appraisal value of the home is above the price to be purchased. Generally, you will want the lenders to appraise the home so that you know the fair value of the home and the lenders would only lend of you are buying the home at fair market value.

The security deposit is an amount you will provide to lock the home from being sold to other buyers while you perform to checks to see whether these conditions have been met. If these conditions are not met, then you SHOULD get your security deposit back.

The Bad Real Estate Agents will want to you provide very few conditions and a big security deposit. Doing so ensure the home is more likely to be sold.

Do NOT go through the internet and pick the first agent you see or the agent that has the most advertisements. They are just spending marketing money which they intend to recover from you. I especially find the ones that are top ranked search engines to be the most conniving, especially the Mississauga location!!!

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Real Estate Agent Trick - First Time home buyers trick, signing the waivers early

Once when the buyer has selected the house he would like to purchase, the next step is to negotiate the selling price of the house. To do that, the buyer's agent will require the buyer to sign a series of documents. Some documents are good for the buyer to sign. Some documents are not! One of them are waivers!

Waivers is a simple form that the home buyer signs to waive the conditions in the contract to purchase to house. The conditions in the contract, which is usually conditional upon financing, home inspection and appraisal value, protect the buyer from having to buy the house, if the buyer conditions cannot be satisfied. The contract usually indicates the conditions must be met within a week where the buyer uses that time to find a lender and home inspector to see if the house satisfies the conditions. If and only if the conditions are met, should the buyer then sign the waivers.

Now, imagine this:

You are new home buyer. Your trustworthy Real Estate Agent hands you a bunch of documents to sign. How often do you actually read through each document? There are so many documents and they can be so confusing. What is the likely hood of you simply giving up reading the documents and just signing everything the Agent tells you to sign?

Now Imagine if your Agent sneaks in the waivers and you being in a state of total confusion, what is the likely hood of you actually signing these waivers?

It happens.

Here's how:

1. The moment the home buyer selects a house to buy, the agent will then have to proceed with several contracts to sign. 

2. These documents are presented in a complex manner that confuses the buyer. The first couple of contracts, the buyer must really sign.

3. At this point of confusion, the buyer would eventually lose concept of understanding and pretty much, will sign anything because it just appears everything needs to be signed, any ways.

This the moment when the Agent quickly sneaks in the waivers and the buyer without even knowing it, signs it because the buyer becomes unaware of what the document is really about!

Now at this point, the scam is not yet finished because the waiver still has to be sent to the seller.

So how does the Agent trick the buyer into agreeing to send the waivers to the sellers?

Here's how:

1. The contract will expire in week. So the Buyer's Agent only has a week to send the waivers to the sellers.

The first thing the Agent does is calls the lenders and other parties involved early to see how the process to checking the contract conditions is going. By calling early, the lenders and other parties will not be able to claim the property to be purchased is no good. In fact, more often than not, the lenders will actually tell the agent there will always be a way to get the money for financing. The lenders say that really just to comfort the Agent they he is in good hands.

2. Using this confirmation, the agent quickly tells the home buyer, the lenders are ok and the house is good. The agent then ask if the buyer is would agree to waive the conditions now because the agent would be too busy later on claiming he is on an educational course.

3.  The homebuyer trust the agent and sees that the conditions will most likely go through. So to help the Real Estate Agent, the home buyer agrees.

Now, it is done deal. The Buyer's Agent now has the right to send the waivers to the seller's agent and the contract is no longer nullable. The buyer must now buy the house. The home buyer may not even know the house was overpriced.

This happens. It happens in Ontario. I am releasing this information because Canadians must know. Quite frankly, orea.ca may not even be aware of it or is not doing anything about it.

Real Estate Agent Trick - Sneaky tactics to rush you

Rushing your decision

There are many ways the Real Estate agent can rush their client without their client even knowing it. Time is money.  Rushing also prevents you from changing your mind and selecting another agent.

One tactic is complimenting all the houses the Real Estate Agent shows you.
There are good houses and bad houses on the market. The agent should tell you which one is good and which one is bad. The agent should have some sort of an opinion. However, if he tells you how spectacular all the houses are and how rare this opportunity, it will encourage you to buy. Fact is, opportunities are a dime a dozen. Generally, sellers do not sell houses to lose money. Your likelihood of finding that bargain house is rare. Do not be so gullible to believe your mighty agent has found that for you.

Another tactic is to claim the house could be taken buy someone else.
It is possible that there are multiple people wanting the same house. In this case, my suggestion to you is jsut back out of the deal. The seller will raise the price and give it to the highest offer. You will have no negotiating power. Further, once you make an offer to the seller and the seller has responded with a counter offer, then only you have exclusive right to purchase the property. That is, no one else can buy the property while you are negotiating with the seller. Therefore, there is absolutely no need to rush once the negotiation process has taken place.

A third tactic is leaving you out of the negotiation process.
The Buyer's Real Estate Agent may attempt to find the highest price you are willing to pay. You do not need to reveal that. By knowing the highest price you are willing to pay, your Real Estate Agent can secretly discuss with the seller's side to convince you the best price to pay and get the deal working. During the negotiation process, your Buyer's Agent may attempt to plan out the whole thing for you and leave you blinded. Do not ever allow this to happen. As the client, you are in charge. Always tell the Real Estate Agent what the next step is, which is dependent on how the seller responded. Never reveal to your Agent the highest price you would pay for the house.

There are many, many tactics the Real Estate Agent can use. The bottom line is that if you end up finding yourself buying a house in week of meeting your agent, then there is a high chance you have been rushed and you may not have even know it. Purchasing a house should be a long and time consuming process. There will always be plenty of houses for sale. There will always be plenty of opportunities. You only have one chance to make the right decision. Make sure you spend all the time you need and want to make that decisions.

Real Estate Agent Trick - Recommending a high deposit

Encouraging you to put a high security deposit when writing up a contract to purchase your desired home.

A security deposit informs the seller you are interested in purchasing the property and the amount lets the seller know how serious you are. The higher the amount, the more serious you are.

The moment the contract is agreed upon by both parties and signed, you must provide the security deposit within the set time specified in the contract. This security deposit is suppose to be returned to you if the contract becomes null and void, if the conditions (usually financing and inspection) specified in the contract fails.

Now, this procedure seems to be fair. Here is where the problem lies:

If the contract becomes null and void and you want your money back, all parties must sign a form called a Mutual Release. This signature must include the buyer, buyer's agent, seller and seller's agent. If any one party does not sign, you will not get your money even if the contract has been null and void. If anyone party refuses to sign, you have to go through court, most likely small claims court, to settle your dispute and if you know anything about the court system in Canada, you know your court date could be as long as two years away!

You should never be serious in buying house. It is poor negotiating tactics. If your Real Estate Agent encourages you to put a high security deposit, it is because your Real Estate Agent wants you to be serious about purchasing the property even though it is poor negotiating tactics.

The reality is your security deposit can be very difficult to get back. Sadly, this is the general process in most home buying transactions and it is a very poor process.

And did you know...

IT IS NOT NECESSARY TO PUT A SECURITY DEPOSIT AT ALL!


There are no limitations to a contract. It is only a matter of agreement. You can write anything you want on the contract as long as both party agrees. My suggestion is to encourage your Real Estate Agent to only provide the deposit after the contract passes the conditions. This is possible, but only if your Real Estate Agent is willing.

For the buyer, the purpose of the contract is to make the contract such that the buyer can get out of purchasing the house. For the seller, the purpose of the contract is to make the contract such that the buyer will purchase the house.

Once again, I cannot stress this enough, to find a Real Estate Agent do not search through the Internet and pick the first one you see. Good salesmen do not make good Real Estate Agents.

Real Estate Agent Trick - Making you travel to see these houses

This is a very common practice and it would seem to make sense. You would need to look at the houses before buying it, correct? Well, there is reason behind the Real Estate Agent wanting you to travel and spend your valuable time staring at these houses. By spending so much time on one house, it becomes too much of an effort to find your perfect house. You end up settling for your less than desired house.

What should be happening is that before looking at the house, you should request a comparable analysis. Your Real Estate Agent has statistical information about the houses you are looking at and houses similar to what you are looking at. This statistical information reveals the market value of the home and whether the home is worth you TIME. By not showing you the comparable analysis, the time, effort and pain it takes for you to search for a home causes you to make a decision faster. If the Real Estate Agent shows you the comparable analysis first, it reduces the pain and you would wait longer to decide. Also, the Real Estate agent has to spend time to create the comparable analysis report where most likely, they would not want to do.

Rule of thumb: Find a Real Estate Agent that will give you the comparable analysis first.

Now, this isn't to say you should never look for the house first.

There is one exception.

When you first meet your new Real Estate Agent, there is some level of concern on the agent's side. The agent is spending valuable free time on you, gambling that you would buy a house through him. So if you start off by requesting comparable analysis, he will not do it. Any honest Real Estate Agent would not do it. A comparable analysis is valuable information that the Real Estate Agent gets for being a Real Estate Agent. They need to pay a fee to be a Real Estate Agent.

What the Real Estate Agent needs to know, is that you need to provide some "level of comfort" that you will certainly buy the house through him in order to get the comparable analysis. To me, this is fair because if the Real Estate Agent is going to spend the time on you to help you find a home, then it would only be fair that you buy through him and let him get the commission.

The legal way to show this "level of comfort" is to sign the 90-day commitment contract that indicates you would only work with him and no other agent for 90 days. This legal way is by no means the only way nor is this a bad way, either. It is only a matter of preference and your relationship with your Real Estate Agent that determines the best approach.

Real Estate Agent Trick - Complimenting terrible houses

Showing you overpriced houses in terrible conditions before showing you the target house.

Once when you have a Real Estate Agent you are willing to work with. The next step or close to the next step is to visit the properties you are interested in purchasing.

A trick your Real Estate Agent may attempt to pull is to first show you a series of houses in terrible condition and is overpriced. Then, after you see your terrible selection and you believe these houses are what you have to work with. Once that belief is set in, then your Real Estate Agent will show you a nice house.

By the Law of Contrast, a valuable house looks even more valuable when it comes after a worthless house.

If you find yourself viewing houses that are just rip offs, be careful when you see a decent house. It is actually less valuable than you believe.  Further, your Real Estate Agent will even try to complement those worthless houses so that when decent house shows up, you believe it's your perfect home!

A Real Estate Agent is a marketing name for a salesperson. By complementing these houses and telling how spectacular these houses on sale are and what a great deal you are getting, it encourages you to buy. By buying, the agent gets paid!

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Real Estate Agent Trick - Not giving sufficient information

Information is vital for you to make important decisions. It is really up to you to decide what to do with the information your Real Estate Agent can provide. Do NOT ask your agent what to do with the information. It is you who make the decisions. You should already have a good idea as as why you are buying the property and how to intend to use property. Your agent cannot tell you that.
Bad Real Estate Agents will hide information in order to get you to make the decision to buy the house. To make sure the agent is being absolutely honest with you and providing you all the information you need to know, always have another reliable source to verify the information.

Often times, Bad Agents will tell you that because of their experience, they naturally know and so, you should trust them. That is NOT a relaiable source of to verify the information. They must have documents to back up what they are saying.

One good way to find honest Real Estate Agents is through referrals. If you friends have experience good results from the agent, then at least you found someone honest and you know the results.

Do NOT go through the Internet and pick the first agent you see or the agent that has the most advertisements. They are just spending marketing money, which they intend to recover from you. I especially find the ones that are top ranked search engines to be the most conniving, especially the Mississauga location!!!

If you have any questions or concerns about these articles, please comment below...

Agent tells you what you want to hear

If he can make you laugh, if he can make you think you are the most important person in the world, if he can make you believe without having any evidence to back up his claims, then he has managed to capture your interest, but not any case has he shown his loyalty or honesty.

You, as a client, is a number. He knows you can leave at any time. The agent does not really care about you. The agent cares about how much money he can make from you.

You, as a buyer, need to make sure you are in calculating, alert state of mind and not a happy, blind, pleasing state.

In fact, the more charismatic he is, the least likely he is honest. Your goal should NOT be to look for someone who is charismatic. Your goal should be to look for someone who is honest and ethical.

Agent pretending to be a hard worker

If you hire a Real Estate Agent, you want them to work hard for your money because you do. And Real Estate Agent knows that. Salesmen know that. But working hard never guarantees success. Sometimes, working hard causes stress and may cause the Real Estate Agent to think poorly and make bad choices.

A Real Estate Agent, like all people, should be have some level of workmanship and ethics, but not to the point of slavery. Do not be gullible enough to believe your Real Estate Agent will climb mountains for you. It is just a job. He should have other priorities. Do not base your Real Estate Agent selection based on how hard they work or how must time they spend with you. The only Agents that genuinely work hard are new inexperience ones trying to establish themselves. Experience agents only pretend to work hard to peek your interest.

If your Real Estate Agent is wasting too much time pretending to work hard, then your Real Estate won't have time to actually get you valuable information you need to make an informed decision.  The moment the contract is signed and the agent get the commission, Bad Real Estate Agents will run to the next sucker and never want to talk or help you any more.

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The biggest MYTH about the Buyer's Real Estate Agent

When we get a lawyer, we would expect the lawyer to be on our side. There is the defence lawyer who is on the defence side. There is the prosecutor who is on the prosecution side.

One would then naturally believe that just like a Seller's Agent would be on the seller's side, then the buyer's agent would be on the buyer's side.

Unfortunately, this belief is absolutely untrue. This belief is a marketing gimmick to trick the buyers. 

Fact is, both the seller and buyer's agent is on the seller's side!

Think of it this way. It is the seller that has agreed to use and commit to the services of the Real Estate Association in that province. It is the seller that is paying the seller's agent AND the buyer's agent. The seller wants to sell the house at a high price to get the most money. The seller's agent want to sell the house at a high price to get the highest commission. The buyer's agent want to sell the house at a high price to get the highest commission.

There is absolutely no benefit to the buyer's agent to help the buyer find valuable homes at low prices. If such houses exist, the buyer's agent would buy the houses instead of selling it to someone else.

Thinking a buyer's agent is on the buyer's side is like thinking the salesperson who works on commission (like FutureShop) is there to help you get the lowest price!

The buyer's agent is a salesman hired and paid for by the seller to help the seller sell the house.

The only control the buyer has over the agent is selecting the agent. The buyer has the right to hire and fire the agents he chooses. Once the agent is selected, the agent could be helping the seller get the most for his or her money. So be careful!

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