Real Estate Home Finance

Watch Out for 12 Real Estate Tactics Designed to Make You Spend More

Buying a house is the single largest purchase most people will ever make, and while the process is exciting, it’s also complex. If you’re not careful, you could end up spending more than you wanted to, or buying a house you really can’t afford. Remember: Real estate agents are great at guiding buyers through the buying process, but they want to earn a commission as well. Be on the lookout for the following tactics some agents may use to get you to spend more—so they earn more.
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Ignoring Potential Stigmas

A stigmatized property is one that’s associated with a negative event, such as a murder, rumors of haunting, or criminal activity. These houses carry a stigma that often keeps renters and buyers away. State laws vary about whether a seller has to disclose a stigma. If you’re not familiar with what happened in the home—and your real estate agent doesn’t disclose the information—you could end up paying more for the house than anyone else would.

Related: 11 Lies You Can’t Tell When Selling Your Home

The Full-Price Counter

You found the house of your dreams and you made a respectable offer (within 5 percent of the asking price). You expect the sellers to make a counteroffer somewhere between the two amounts. If the house is newly listed, however, the seller’s agent may advise them to counter back at the full asking price. This puts you in a difficult situation. You can try countering again with a number closer to the asking price, or you can agree to pay full price. Either way, you’ll probably end up spending more than you thought.

Related: 10 Real Estate Negotiation Tactics That Can Really Backfire

Creative Descriptions

Real estate professionals are masters of marketing lingo, and it’s all geared toward making you see a property in a positive light so you’ll make an offer. For example, when an agent tells you the yard has mature trees, this may mean the trees are old and need immediate pruning to keep branches from falling on the roof. When she tells you the house has real potential, it often means you’ll need to spend a lot of money on repairs and renovations just to make it livable. Keep your eyes open, and trust your own instincts.

Related: 8 Red Flags to Look For in a Real Estate Listing

“As Is” Listing

When a house has physical defects that won’t pass a termite, structural, or mechanical inspection, it’s often listed “as is.” This means the seller makes no guarantees whatsoever about the condition of the house. In the real estate world, this is a last-ditch effort to sell a home that’s seen better days. Unless you’re an expert renovator, you could easily spend more for the house than it’s worth.

Related: Real Estate Regret: 10 Simple Ways to Avoid It

Selling at Auction

Some houses never make the multiple-listing service. They may be sold as part of an estate because they’ve been foreclosed on, or because they’ve been seized for nonpayment of taxes. Whatever the reason, these houses are sold on the auction block. It’s a high-risk scenario because if you win the bidding war, the house is immediately your responsibility. You don’t get to reconsider. In some instances, potential bidders don’t even get to inspect the property before they buy.

Related: The Top 10 Costly Mistakes Home Buyers Make

Selective Showings

An agent receives a commission when a house sells, but the commission is split between the listing agency and the selling agency. Most commissions are 5 to 7 percent of the selling price, but not all. Some agents will take a 2 or 3 percent commission when they list a house. If your real estate agent isn’t showing you all the houses in your price range, it may be because she wants you to focus on houses where she’ll get a higher commission. On a positive note, most agents won’t do this.

Related: 10 Questions to Ask Before Hiring a Realtor


It’s a common tactic, and it can cost you big bucks. Upselling is the practice of showing clients homes that are just above their price range. Your agent may feel you’re underestimating your budget, so she may encourage you to look at more expensive homes. She may tell you that a more expensive home will raise your mortgage payments by just a few hundred dollars a month. Don’t let yourself be talked into overspending. Work with your lender to establish a price range, and stick to it.

Related: Buyer Beware: 9 Real Estate Scams to Watch Out For

Competitive Offers

If you’re buying a house in a hot market, it’s not unusual to get into a bidding war, but if a house has been on the market for more than a couple of months and the agent tells you someone else just made an offer, be suspicious. This may be a tactic designed to encourage you to make a higher offer than you normally would have. On the flip side, it could be true, so make your offer based on your price range and how badly you want the house.

Related: 9 Ways to Get the Best Price on Your Dream Home

Manipulating Sales Comps

When a house is listed, the listing agent will often compile a market analysis to compare the listed house to nearby homes of similar value that recently sold. This is a good way to estimate the eventual selling price of the house, but the listing agent can manipulate the comparison houses (comps) to make the listed house appear to be worth more than it really is. The best way to establish value is to have the house appraised by a certified appraiser.

Related: 11 Sneaky Ways to Save When Buying a Home

Selling the Neighborhood

Your real estate agent may tell you “location, location, location” is the most important factor when buying a home. While it’s true that location is very important, if you buy a house you can’t afford just because you love the neighborhood, you could wind up regretting it. Make sure your agent knows you’re looking for the perfect house, not just the perfect neighborhood.

Related: 11 Myths Home Buyers Should Never Believe

Taking You Out on the Town

If you’re buying a house in a new community, some agents will wine and dine you and show you a great time. They know that by establishing a friendly relationship, you’ll be more likely to buy a house from them. Don’t refuse their offer—you could end up becoming good friends—but don’t let the agent’s kindness make you feel indebted to buy a house you don’t want or can’t afford.

Related: Find the Right Realtor: 9 Tips from Happy Homeowners

Short Counter Time

Houses rarely sell for their initial asking price. You make an offer, the seller counters, and then you either take the deal or make another counteroffer. When you put in a bid on a house and the seller counters, you usually have a couple of days to consider the seller’s new offer. If the seller’s agent gives you only a few hours to counter, however, it’s a ploy to force your hand. You can avoid making an emotional decision on the spur of the moment by deciding beforehand on your top bid price and then sticking to it.

Related: 10 Simple Mistakes That Could Cost You Your Dream Home