The other day my wife suggested that we should take the boys to get some new shoes after saw a flyer saying that shoes were 50% off. When we arrived the front of the large big box store was plastered with large flyers advertising their 50% off sale, but as we got closer I noticed the fine print on the signs; “on selected merchandise”.

When we found the shoe section I quickly noticed that out of the dozens of kids shoes for sale, only 4 pairs were marked down. None of them had velcro and all of them were the style of shoe that any six year old would have a difficult time tying. In short, these were the shoes most people would never buy.

example 2

Example of an advertisement, this is not the store I am referring too.

Are there people who’s sole job it is to come up with creative ways how to mislead people? To advertise products that no one wants in the hopes of them buying something much more expensive? I mean they must have paid a ton to send out flyers across the city advertising the sale and there was nothing worth buying on sale. Needless to say we left without buying anything. It wasn’t a money thing, but the principle.

Like many low end retail stores, Gimmicks, False Marketing, and Bait and Switch are some of the tricks that the unethical real estate agent uses to land new business.

The problem is that unlike a $60 pair of shoes, a house is worth hundreds of thousands of dollars and in most cases is a person’s biggest investment. Personally and professionally I hate this stuff. I see it everyday and while I bite my tongue, whenever I see another sign from one of these unethical agents on a lawn, I think to myself, “another one fooled”.

Below are some of the more common real estate advertising gimmicks, misleading offers and bait and switch offers that you should be wary of.

Guaranteed Sale Program


Notice the “*” by the exclamation mark? Always read the fine print.

Perhaps one of the most misleading tricks in the book, is the “Guaranteed Sale Program”. Promoted by unsavoury real estate trainers and agents, this program is designed to take advantage of unknowing home sellers in two ways.

First, it’s combined with high pressure sales tactics to get people to buy a home before they feel comfortable, because the agent will use the line “there’s nothing to worry about, I will buy your home if it doesn’t sell so there is no risk to you“. The problem is that these guaranteed sales programs have so many conditions, that no one usually qualifies.

Second, the program gets the home seller to acknowledge in advance what their bottom dollar is, which is a much lower price than market value. To give you an example, let’s pretend that a home seller has a house worth $600,000. In a guaranteed sale program the agent will offer to buy their home for $540,000 if it doesn’t sell. At this price the real estate agent will be able to make a profit (or spin the home to an investor) if she has to buy the home and resell it, but she won’t have too.

By agreeing to a deal like this, the home seller in not so many words is saying they will accept anything higher than the guaranteed sales price of $540,000, even if it is much lower than market value.

Sounds like a raw deal to me.

Here’s the secret, real estate agents are not in the business of buying their client’s homes, they are in the business of selling them and this is a gimmick they use to overcome legitimate concerns on the part of sellers and get the listing contract signed.

Buy and Sell and Save Commission

This is a popular gimmick in markets with high average selling prices. In order to cut through the competition without offering any real value, some real estate agents are offering to discount or even waive the listing commission if the seller agrees to buy a home with them.

Sounds good right? Not so fast. These agents aren’t doing this out of the good of their hearts. Keep in mind that they still have to make a living which means they will not spend time or money properly market the home. In most cases will this agent fight for their client in negotiations? I don’t think so.

It’s well known that with home staging and a top notch marketing plan, a home seller can make 5-10% more on the sale, however by ignoring this and falling for the discount offer, the seller stands a good chance of actually loosing money.

On the flip side, in order to make their business viable, this real estate agent is going to try and sell the client a home as fast as humanly possible, usually ignoring their clients wishes. Normally a program like this locks the seller into very long contracts that way the agent increases their chances of making a deal. If you are considering a ‘deal’ like this, think twice.

Cash Back When You Buy a Home

While legal, I find the idea of someone paying you money to hire them a little unsettling for a number of reasons. First, as a real estate agent in general, acting as a buyer representative is hard work and could involve weeks of house hunting and leg work.

When an agent voluntarily gives cash rebates to people buying a home just to get their business, you have to ask how much do they value doing a good job, or are dedicated to business principles? Do they really care what the outcome is for their client, will they fight for them or are they just desperate to earn a cheque?

For Sale By Owner Programs

Many for sale by owner companies are the kings of misleading advertising. With promises of listing a home on the MLS for a low upfront fee, they claim commission saved without comparing the final numbers or the actual outcome with a seller who uses a full service realtor. They also don’t disclose that in the majority of cases, their sales still involve a buyer real estate agent that their clients end up paying a commission to, so the promise of5 or 6% saved in many cases is misleading. According to the National Association of Realtors, the average For Sale By Owner sells for 13% less than a seller who is represented by a real estate agent.

Personally I have no problem with different business models, and I realize that my service won’t everyone. What I have a problem with is the misleading advertising and low ball attack ads used by many for sale by owner companies to try and get people’s money.

Misleading Advertising has always existed and always will, because there are people out there who will fall for unrealistic or false promises because they don’t take the time to think about the actual offer. Just like when we fail to read the small print on a flyer, we are blinded by the too good to be true offer from a less than upfront real estate agent. My advice? Be sure to ask many questions and read the fine print before agreeing to a sweet ‘deal’!

  • The Village Guru
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