…and other dishonest practices you could come across in Real Estate Dealings.

The title is rather long, but well suited to this undesirable breed of real estate agents and ‘deal makers’ who consider themselves Real Estate Professionals.

While there are laws to protect a home buyer and investor, these laws are only now being enforced swiftly and effectively. However, this has not slowed down the pack of deceptive agents who had got a foothold in the market from the early stages, and like bad parents are influencing another ‘generation’ of real estate agents toward walking the wrong path.

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As a home buyer or seller, it is but natural that you consider a real estate professional as a mentor, in guiding you toward making a smart investment and/or decision when related to property. After all it is in both your interest and the interest of the Real Estate Agent to guide you, in the understanding that a happy client will be a repeat client.

This unfortunately is not always the case. That basic human sin of greed is hard to subdue when you come across Real Estate Agents who do not have the desire to build an honest career, but are just going with the flow, so to speak.

Deception Tactics you should be aware of:

One common tactic employed by unscrupulous agents here is to call you when you have a hot property for sale, and tell you with a straight face that they have a client and the deal can be closed within two days. To seal their commitment they will not hesitate to thrust a ‘holding deposit’ cheque in your hands as proof of intention. The more daring of this breed will even offer you a huge cash deposit!

Then starts the next phase. Two days later, the excuses will start to trickle in…’ The client unfortunately had to travel on a family emergency and he will be back only next week’…
As this pattern of text book excuses plays out, the unscrupulous agent is meanwhile only now looking for a buyer. Unlike the current situation in markets where there is a slump, here the prices are seeing a healthy rise. Thus the bad agent has effectively held the seller at ransom with a deposit and is having a field day (no pun) with a property.

You may be wondering why at the time of accepting a deposit there isn’t a formal and binding contract? well besides the few professional real estate agencies that do take care of their clients, most real estate agents and their brokerage houses run on what is unique to the market in this region, ‘TRUST’.

It is always advisable to seek legal counsel when undertaking any matters related to property, and this fact cannot be emphasized strongly enough. Fortunately there are a number of growing and established law firms that do have very good knowledge on the newly created laws of the land and are out there to help new investors and home buyers.

If this sounds like an agent bashing post, it is not. Both naive, and fresh real estate agents entering the market are just as likely to fall victims to these bad seeds as are home buyers and sellers.

The unique way in which real estate dealings are done in the region, sees more transactions done directly between real estate agents than between buyer-agent or seller-agent.
This means that honest real estate agents really need to learn how to pick the right associates to deal with, or face being victims of scams and the behavior of the unscrupulous ones.

Professional Real Estate agents can fall into a potential trap which goes something like this:

‘I gave you a deposit, that seals my first right of refusal’. The problem arises in the fact there are rarely any formal agreements to fall back on between Agents who may be associates and/or collegues. So such a scenario holds the agent (or seller) at ransom until the unscrupulous agent has managed to find a client, with no clear time frame for release from this informal binding being defined.

Some other Deception Tactics faced by Buyers and Sellers:

• Listing a property that is no longer available, in the hope of lead generation by receiving calls from interested buyers or agents

• Listing a property under the current market value, then telling an interested client that the property has just sold out, but the next best unit (always at a much higher price) is available.

These are only some of the ways that unscrupulous agents operate in the market. The biggest blessing in recent times is the opening of an institution such as the DREI ( Dubai Real Estate Institute) that teaches real estate from a career point of view and with the mission of instilling in real estate agents, best practices and a more professional approach to this industry.

If you are dealing with a Real Estate agent and have doubts about their reputation, it is well worth your time to interview them on relevant questions about the property and the market. Most times with a little reading and home-work beforehand, you will be able to spot the fly-by-night operators from the more informed and serious professionals.

This way not only are you doing yourself a favor, but you are helping to weed out the bad seeds. These bad agents will be forced to learn more about their industry, and hopefully at the same time, help them develop a conscience.