Apr012016

Five most common lies realtors tell

realtors frequently lie to their clients to close deals and generate commissions, placing their needs and desires above their clients.

Every word she writes is a lie, including “and” and “the.” Mary McCarthy

realtor_and_platoWhen a realtor talks, do you believe a word of it? At some level you know that most of what they say is bullshit, statements made without regard to the truth, usually to manipulate customer behavior for self-serving reasons. realtors want only one thing: to generate the largest commission possible with the least amount of time and effort. Bullshit helps reach their goal because bullshit smooths over all objections by telling people what they want to hear.

The Credibility Continuum

The credibility of anyone’s opinions relies on the history of factual and truthful statements made by the individual. I’ve been writing about real estate issues daily for over nine years, so I have some credibility on the subject due to the large number of statements and predictions that proved to be accurate and prescient. Nobody is infallible, so achieving 100% credibility is impossible, but with skill and integrity, anyone can gain a great deal of credibility to comment on a subject.

The easiest way to visualize how credibility works is to see it as a continuum as described below. Infallibility (100% credibility) is on the right, and always wrong (-100% credibility) is on the left, and zero credibility is in the middle. Notice that always being wrong is not 0% credibility because if someone were always wrong, anyone could know what the right answer is by believing the opposite. Further, it takes a great deal of skill to be either right or wrong all the time because it would require the person to know the difference.

Zero credibility comes from random guessing; sometimes the person is right and sometimes the person is wrong. This can happen because the person has no skills or knowledge in a subject matter, or as in the case of realtors, the person may simply be making up opinions and guessing what someone wants to hear — bullshitting.

credibility_continuum2

realtors score less than zero on the credibility continuum. Many have minimal skills, but those that do are trained to offer self-serving bullshit answers to any question. Many realtors bullshit out of ignorance which puts them closer to zero, but still in the negative; however, many realtors are smart, and they knowingly lie and manipulate people making their credibility score even more negative.realtor_Duplicity

realtors are not alone on the negative side of zero. Politicians also consistently score less than zero, and since politicians are generally smart people, they generally score even more negative because they know exactly what they’re doing when they offer casual lies to manipulate public opinion. If you look at the current crop of candidates for President, you see that bullshit rules.

Combating lies in real estate transactions

Amy Thomas, March 29, 2016

Real estate agents are often accused of telling lies to seal the deal. Here are some of the most common mistruths in the real estate industry — and the disruptive effects they wreak on all involved.

Lies abundant and nebulous

Real estate agents are inherently liars. Whether they are deliberately omitting critical information or misrepresenting the facts, agents are fluent in the language of falsehood.

Yes. That is how most people see it.

At least, that’s what many homebuyers and sellers think. However, these opinions are tainted by the actions of an unethical few — actions which unjustly reflect on the numerous, ethical agents who deal honestly and are straightforward with clients.

realtor_little_rMany good Realtors exist (deserving of a capital “R”), and they are as dismayed about the practices in their profession as I am. I have the utmost respect for the character of Shevy Akason, the lead agent working with clients for OC Housing News, and Randy Rector, broker of record for Evergreen Realty. Many other Realtors and brokers have approached me and told me they share many of my frustrations. I characterize bad realtors with a broad brush, and I want to recognize that good Realtors exist, and my exasperation is not a reflection on them.

Although most agents don’t outright lie to their clients, agents on the whole haven’t necessarily proven this assumption wrong. …

A study conducted by researchers at Baylor University indicates real estate agents are highly likely to use neutralizations to justify their lies. Neutralizations are excuses which make a fib seem like a viable business practice since the lie is told to benefit someone or something else, like the agent’s family. For example, a buyer’s agent whose client is wavering may misrepresent a home as faultless in order to secure their fee, which helps the agent provide for their kids. …

So if they lie to their clients, and the lie harms their client, it’s an acceptable business practice?

If you go to a stock broker, and that broker puts you into a high-fee junk mutual fund that makes you little but them a lot, is that okay… wait… they do that all the time.

If you go to a doctor, and the doctor prescribes you an expensive medicine because the pharmaceutical company gives them a kickback, is that okay?

Whatever rationalization realtors come up with to justify their unethical behavior doesn’t make it right. The excuse might be convenient, and it may help them sleep at night, but it’s nothing more than an exercise in self-deception, a deception that hurts their clients.pinocchio_realtor

Common lies among real estate agents

Two types of lies are most common in the real estate industry: misrepresentations and omissions.

Misrepresentations are frequently made regarding the sales agent themselves. For example, agents may:

  • advertise as an undefined “neighborhood specialist”;
  • pad their production numbers to look better to clients;
  • stretch the truth about their past experience in particular transactions;
  • inflate their base of buyers when seeking a property listing; and
  • take credit for transactions completed by their brokerage, but not by them.

How many have fallen victim to these lies without knowing about it?

Omission of the facts

Lies by omission, on the other hand, tend to be made about the properties with which agents deal. These omissions include:

  • disclosures of material facts or property conditions adverse to value or use;
  • potentially negative neighborhood or area conditions;
  • appropriate demographic information, such as the presence of senior communities; and
  • conflicts of interest.

For example, some agents fail to disclose underlying damage on a property, such as water damage they’re aware of which is hidden from the buyer’s sight. Other disclosures are avoided under the principle of “don’t ask, don’t tell,” or more commonly, “as is.”  …

realtor_know_nothingI know nothing! NOTHING! (See: Sergeant Shultz from Hogan’s Heros)

The injured buyer has up to two years after the transaction closes to pursue the agent for money losses caused by the agent’s negligence or nondisclosure. [CC §2079.4]Despite the consequences, many agents still try to omit critical information to avoid killing a deal. These agents may figure if the client doesn’t ask the question, they don’t have to answer it — a dangerous gamble against the agent’s duty to disclose known adverse facts. All too frequently, as a matter of improper custom in the industry, agents deliberately wait until after a seller accepts a buyer’s offer before disclosing material facts to the buyer.

Isn’t that shocking to you? And this is standard practice in the industry!

The belief seems to be that as long as the disclosures are made before the buyer takes title it doesn’t matter when they are disclosed. However, agents are required to disclose any condition within their knowledge which might negatively affect the property’s value for a client — before the seller accepts the buyer’s offer. [Holmes v. Summer (2010) 188 CA4th 1510; CC §1102.4(a)]

Still, agents will make omissions and, when called out, claim to be unaware of the adverse property conditions.

In other words, they lie to cover their culpability in a crime.

Why do agents continue to lie?

As previously mentioned, many agents lie — ahem, misrepresent or omit — to close a deal without a hassle. They fail to consider how their conduct affects anyone but themselves.

Clients who trust a dishonest agent are basing their most significant lifetime investment decision on the agent’s false claims or failure to correct or provide missing information. Essentially, the agent leads their client into a trap, representing a property as better than it actually is and letting the client suffer for their silence.

With Expertise comes Responsibility

baghdad_bobBad realtors want to have their cake and eat it too; they want to be recognized as experts on real estate and real estate markets, but they want no responsibility when their expertise is confirmed as chicanery, a conundrum with no resolution. realtors are responsible for their representations that buyers rely on. Who is to blame when a realtors representations prove false? Are buyers culpable for relying on the experts, or the experts responsible for making stuff up that people rely on?

Does this make my butt look fat?

Perhaps this analogy is politically incorrect, but… Imagine you are shopping for clothes in a high-end retail outlet. You are trying on an outfit, and you are concerned about its appearance, so you ask the salesperson, “Does this make my butt look fat?” What is the salesperson to do?

If the salesperson responds, “Yes, that is not flattering to your shape,” they fear they will not close the sale, so even if the garment does, in fact, make your butt look fat, the salesperson is probably not going to tell you. As a customer, you asked a question hoping for accurate information to help you make a purchase decision. What you are likely to get is a self-serving answer that makes the salesperson money.

If a buyer walks out of the store with ill-fitting or unflattering clothes, who is to blame? Is the buyer responsible for failing to see the conflict of interest, or is the salesperson at fault for dissembling for dollars?

Being stuck with a bad garments is a minor inconvenience, but losing a home in foreclosure or being trapped in an underwater mortgage for a decade is a catastrophe.

Andrea_Straub_realtor

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