Real estate agents can do many things. They market homes, value properties, network like crazy, show houses, and make sure the lenders, title companies, and inspectors all do their job. However, there are some things you should not ask an agent to do, and there are some things you should not ask or say. At worst, it is against the law for agents to answer certain questions. Additionally, some things you ask an agent may make them hesitant to work with you. Try to avoid asking, saying, or doing the following things to make the house buying or selling process go smoothly.
1. Do not ask your agent anything about race or ethnicity
Real estate agents are bound by fair housing laws. That means they cannot discriminate based on race, ethnicity, religion, any other protected class. If you tell a real estate agent you don’t want any Asian people to buy your house, not only could you easily offend the agent, but it’s also illegal for the agent to try to carry out your wishes. If you ask your agent if a lot of African Americans live in a neighborhood, it is illegal for the agent to say yes or no.
Not only could it be illegal for agents to talk about race, but there are people who work for the government and call agents, trying to get them to talk about race. There is a good chance an agent will suspect a buyer or seller is not legit if they are always talking about race.
2. Don’t ask “Is this a good neighborhood?”
Real estate agents cannot tell you what a good or bad neighborhood is. Sure, you may have a pretty clear idea of what a good neighborhood is to you, but everyone has a different opinion of what a good or bad neighborhood is. Real estate agents cannot give their opinion on how good a neighborhood is. If they did this, they would steer everyone toward the same neighborhoods, which would decrease values in other areas.
A good neighborhood to you may not be a good neighborhood to me. Maybe I want to live close to the city center where crime is higher yet there are more things to do. Someone else may want to live in suburbia where there are youth sports and more charter schools. We are all different, and it is not an agent’s job to decide what a good neighborhood is for you.
If you want to know what a good neighborhood is, use websites, call the local police department, and talk to people in the neighborhood.
3. Don’t ask, “my regular agent is busy, so can you show a house to me?”
A real estate agent’s job is to represent the buyer or seller of a home. Real estate agents are usually only paid when a buyer or seller they are representing closes on a house. If you ask an agent to show a house to you when you already have another agent, you are asking for trouble.
For one thing, you are asking someone to work for free. Secondly, there are rules about how agents get paid. If you are working with one agent but have another agent show you a house, there could be confusion about who earned the commission (procuring cause). Technically, the agent who showed you the house may be entitled to the commission, which could cause a huge mess with your original agent. Good agents should have backup or other agents who can show houses for them when they are busy or out of town. Working with a real estate team also can alleviate the problem if your agent isn’t available.
4. Don’t ask “is this house in a good school district?”
The question about schools falls in line with the question about neighborhoods. Some schools may have better ratings than others, but those ratings are subjective. People also have a different idea of what is most important in schools. Is it important that schools have good sports teams, or a good drama program, or only good education? Real estate agents will not and should not tell you what a good school district is.
To learn how to get the best deal and make the most money, check out my book: How to Buy a House: What Everyone Should Know Before They Buy or Sell a Home. It is on Amazon as a paperback or Kindle.
5. Don’t ask an agent to reduce the commission when selling your house
All real estate commissions are negotiable. There is no set commission and sellers are welcome to try to negotiate commissions. That does not mean it is always a wise decision. If you are interviewing many agents and pick one based solely on the commission they charge, you will get what you pay for. The agents who will take the smallest commission are most likely doing it because they are desperate and have nothing else going on. If you are negotiating the commission, remember that in most cases the buyer’s agent and the listing agent are splitting the commission. If you reduce the commission, you might be reducing the commission the buyer’s agent receives, which could reduce the number of agents who try to sell your home to their buyers.
I had a contractor who used to help me remodel fix and flips I bought. I also was a HUD listing agent and, as a result, could not buy any HUD homes at the time. One day, I saw a great deal on a HUD home, which I sent to my contractor and told him to buy. He bought the house, fixed it up, and made $30,000. When he listed the home, he said he would only let me list the house for him as an agent if I took a smaller commission. I agreed to take the smaller commission but never sent him a good deal again. I gave him a deal that made him $30,000 and he thanked me by forcing me to take a lower commission. If an agent is giving you awesome deals, do not push them away.
6. Don’t pretend like you know what you are doing even when you don’t
Buying a house is a complicated process. It can be very confusing for buyers and sellers. If you do not know something or are confused by what your agent says, ask questions. Make sure you know exactly what is going on and how the process works. Some investors or home buyers will pretend to know how much a rehab costs—or what homes are worth—when they have no idea. This can confuse the agent or cause them not to take the buyer seriously. If you don’t know something, that is okay, but don’t pretend to know because it can get you into trouble.
7. Don’t tell a real estate agent you have talked to a lender when you have not
One of the first things a buyer should do before looking at houses is talk to a lender. The lender can tell the buyer how much house the buyer can afford and if the buyer has any credit problems that need cleared up. One of the most frustrating things for buyers and agents is when the buyers find a house they want to buy, but they are not qualified with a lender yet. The seller will usually not accept an offer without a qualification letter, which could cause buyers to miss out on the home. The buyers may also find out they can only afford a $200,000 house when they have been looking at $400,000 houses. They may find out their payment will be $2,000 a month when they thought it would be $1,500 a month. Talk to a lender first to avoid problems and to avoid wasting a lot of time.
8. Don’t say you are not working with another agent when you are
If you are working with a real estate agent, it is best to work with only that agent or to fire that agent and choose another one. Using multiple agents at the same time and in the same market does not work well. Agents are taught not to steal clients and to be wary of buyers who are using multiple agents. If you are a buyer who has many agents, you may run into the procuring-cause issue where you owe real estate commissions to more than one agent. If one agent finds out you are working with another agent, they will most likely stop looking for houses for you.
9. Don’t say “I know what my house is worth on Zillow”
Zillow has a lot of great features and a lot of great information. But their house-valuing feature is not very accurate and can be very misleading. When I valued my rentals a few years ago, Zillow was off by more than 20 percent on many of the properties. They have gotten slightly better, but even Zillow admits they can be 20 percent off on values. It is best not to use Zillow’s valuation tool when deciding how to price your home. Real estate agents get paid to help you value a property, and the information they have will be much more accurate.
10. Don’t say “my neighbor’s house is listed for _______ so my house must be worth ________”
Many sellers like to value their home based on houses that are for sale in their neighborhood. There are a few problems with this technique:
- Houses that are for sale and have not sold are not a gauge of value. The houses could be grossly overpriced, and the reason they are for sale is because nobody wants to buy them.
- You have no idea how nice a home is or what features it has based on the exterior.
To value a home, you need to see what similar properties have sold for in your neighborhood in the last 6 months. You need to know what type of financing was used, how long they took to sell, and what condition they were in. Valuing a property is not easy, and coming up with values from active listings that have not sold is not accurate.
Real estate agents can be a great resource to get the most bang for your buck. There are some things that agents cannot talk about, and there are many things you could say or do that will cause an agent to not take you seriously. If you want to get the best deal on a house or make the most money selling a house, take the process seriously when choosing an agent and trust they know what they are doing.