Real Estate Agent Scam – I will sell your home or buy it!
Real estate agent scam!
There has been a new real estate agent scam going around GTA lately. You may have noticed some signs in your neighbourhood that say “I will sell your house in 30 days or less or BUY IT”. Although some of those may be real genuine offers, I want to tell you about a real estate agent scam that I have recently uncovered.
The agent will generally ask you to list your home and will offer to guarantee that they will buy your home if they can not to sell it within the promised period of time. Sometimes they will not promise any of this AT ALL but the scam is the same from this point forward.
The main thing to be aware of about this real estate agent scam is that the agent will convince you that your home is really good and that it is worth more than you think and that he/she will sell your home easily and fast. All this is, to get you to sign a listing agreement and hire them to sell your house or condo.
Once you signed, you will very soon find out that there is no activity on your listing even though there are many showings on your home. If you have at this point already bought your new home where you will be moving and have firmed up on that deal, you are now in MAJOR TROUBLE.
As the closing day of your new home is approaching and getting closer, you will start to panic over the fact that your old home has not sold yet. At this point the agent will insist that the only way to sell it at this point is to drop your price DRASTICALLY, sometimes by 10-15% of your original price.
As your other closing on your new home is approaching closer and closer, you have no choice but to drop the price and hope that NOW FINALLY YOU WILL SELL. But you are wrong!
This is where the real estate agent scam gets really dangerous for your pocket. Once the last day approaches, the agent now tells you that since he/she feels bad that you have not sold your old house and since you are in a dire desperate situation because you need to close on your new property, that HE/SHE WILL BUY YOUR HOME THAT SAME DAY, but since you need money right away to close and since the agent only has X amount of $’s saved up, they can only offer you a much lower amount, which is usually another 10-15% of the price lower. In addition, suddenly, they will say that they have to will buy it using a close relative as a name on the agreement, for the tax purposes.
At this point you agree, out of desperation, and sell your home for 30% less than you listed it at and the agent walks away happily, and much richer.
HOW COULD YOU HAVE AVOIDED THIS REAL ESTATE AGENT SCAM?
Make no mistake – only a few of the tens of thousands of agents in GTA are doing this scam and they are the ‘bad apples’. The rest of real estate agents in GTA are generally hardworking, honest, knowledgeable professionals. Interview a few agents before you hire one. A good agent should demonstrate an in depth knowledge of the area and should be able to provide you with at least 10-15 references of previous clients on your request. Check ALL of their references. Sometimes it is just one person that bothers to tell you what that agent is really like.
IF YOU DECIDE TO DEAL WITH AN AGENT WHO GUARANTEES TO BUY YOUR HOME, YOU SHOULD DO AT LEAST THE FOLLOWING STEPS TO PROTECT YOUR SELF…. Any agent who guarantees you to buy your home should be dealt with cautiously and you should immediately involve your LAWYER if you do decide to continue. Have your lawyer draft a custom listing agreement and do not sign the agent’s version of listing agreement. Your lawyer will ensure that if the agent does guarantee to buy your home, that it is done on your terms and your price (trust me, most of those agents will run away at that point).
A good agent will simply present to you a free market evaluation of your home and it should be close to what other agents or majority of have said it is worth. A good agent will also not mislead you of how quickly they can sell your home. THERE IS NO WAY OF KNOWING HOW FAST YOUR HOME WILL SELL UNLESS THE AGENT CAN BRAK THE LAWS OF PHYSICS AND BE ABLE TO SEE IN THE FUTURE!!!
A good agent will tell you that the market will decide ‘how much’ and ‘how long’, but a good agent will have a strong plan presented to you showing how they plan to market your home and what they will do if the home can not be sold. In fact, in the above example of the scam, the seller had other options that could have been arranged had the seller been aware of it. (for example, if the seller was working with a mortgage agent, the mortgage agent could have taken equity out of the unsold property to cover the closing on new property etc. – there are a few ways and you should always hire a mortgage agent as well in my opinion, because they are with you during the entire process and can assist you if trouble arises).
A good real estate agent will be sincere and will care about YOU first and will NOT offer to buy your home (conflict of interest).
CHECK REFERENCES!!! At the very least 10 of them. A bad real estate agent can ask a few friends to lie for them, but it is not likely that they have 10, 15, or 20 friends like that.
Call me if you are not sure, or if you need help selling your home. I provide honest, reliable service that will exceed your expectations. My direct number is 647-892-5007. To learn more about me go back to my home page. To see what homes in your area are selling for, so that you can have a better idea of what your home is worth go to my search houses for sale website www.MyGTAhomefinder.com
What can you do?
1) Call POLICE
2) Call RECO (the ‘police’ of real estate agents) – this was a breach of RECO’s rules on many many levels – The agent would possibly loose the licence to practice as well (conflict of interest, failure to represent seller/client’s interest, etc, etc, etc)
2) Take it to the court. It is Possible that the agreement is VOID and the sale never took place. ANY AGREEMENT MADE UNDER UNDUE DURESS OR PRESSURE IS VOID. (means the home is still yours)
3) Gather as much evidence as you can. Was there any feedback from buyers that came to loo at your house? Do you have open house visitation records with contact names? Call buyers or the buyer’s agents and ask for feedback. Maybe you already know that feedback was great and buyers showed great interest in your home (but somehow miraculously no offer was ever made). Get your comparable examples of properties that sold in your area and the amour they sold for and the length of time they were on market before they sold. If everything was like your property, than it is likely that the agent manipulated the process and it confirms it.