The 10 best and worst real estate practices
Real estate agents representing properties in states where they are not licensed, lying about other interested buyers or offers pending on a property, or failing to identify themselves as agents in their marketing and advertising efforts are among the practices that are most objectionable to real estate practitioners, according to an Inman News survey.
Agents who continue to market already-sold properties in order to attract new clients, and agents who do not identify themselves as agents in online conversations also top the list in drawing opposition from fellow real estate professionals, the survey found.
The good news: Real estate professionals say that such practices are not the norm.
Among the five practices listed above, which at least 85 percent of all respondents agreed are “unacceptable,” none was selected as “common” by more than one-third of survey participants.
About 31.8 percent of respondents said it’s “common” for a listing agent in their market area to tell buyers “that there are other buyers interested or other offers pending on the property when there are not,” for example, with an additional 31 percent of respondents stating that this practice is “infrequent.”
The online survey of over 500 real estate professionals, “Real Estate: Behind the Curtain,” was conducted from April 2011 to May 2011 and featured a series of about three dozen multiple-choice questions on the acceptability of a variety of real estate practices and a parallel set of questions about the frequency of those practices. The survey response rate ranged from 348 to 504 per question.
A majority of respondents agreed that two real estate industry practices are both “unacceptable” and “common”:
- 50.2 percent of respondents said it’s unacceptable for clients or prospective clients “to be unaware of a real estate agent’s previous real estate licensing violations, suspensions, etc.,” and a whopping 70.7 percent of respondents said this occurrence is “common,” with an additional 16.2 percent stating that it is “infrequent.”
- 63.5 percent of respondents said it is unacceptable for an agent or broker to make “vague or unsubstantiated claims about market share,” such as claiming to be a “top agent” or “No. 1 agent.” About 56.1 percent of respondents said this practice is common.
A majority of respondents said that following four real estate practices were either “acceptable” or “desirable”:
- Listing agent is from the same office as the buyer’s agent in the same real estate transaction (67.1 percent “acceptable,” 7.6 percent “desirable”).
- Major listing brokers in the same market area choose to offer the same commission rate or roughly the same rate to cooperating brokers on the buyside of the transaction (40 percent acceptable, 16.2 percent desirable).
- Agent is personally engaged in buying or selling homes while working with clients who are also buying or selling homes (49.4 percent acceptable, 5.8 percent desirable).
- Major listing brokers in the same market area choose to charge the same rate or roughly the same rate for services (41 percent acceptable, 12.6 percent desirable).
And at least half of survey respondents agreed on three practices that are “rare” or “never” occur:
- Listing agent agrees to represent properties located in a state where the agent is not licensed (45.5 percent “rare,” 41.6 percent “never”).
- Listing agent offers different level of compensation to buyer’s agent based on that agent’s brokerage company, fee structure or business model (34.7 percent rare, 22.4 percent never).
- Buyer’s agent shares client’s maximum purchase price with listing agent (40.4 percent rare, 9.6 percent never).
Among the five practices listed above, which at least 85 percent of all respondents agreed are “unacceptable,” none was selected as “common” by more than one-third of survey participants.
About 31.8 percent of respondents said it’s “common” for a listing agent in their market area to tell buyers “that there are other buyers interested or other offers pending on the property when there are not,” for example, with an additional 31 percent of respondents stating that this practice is “infrequent.”
The online survey of over 500 real estate professionals, “Real Estate: Behind the Curtain,” was conducted from April 2011 to May 2011 and featured a series of about three dozen multiple-choice questions about the acceptability of a variety of real estate practices and a parallel set of questions about the frequency of those practices. The survey response rate ranged from 348 to 504 per question.
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