In a hot real estate market, those eager to purchase a home can be susceptible to common sales tactics used by the real estate industry.

David Fleming, a realtor at Bosley Real Estate, outlines some of these tricks, and explains how potential buyers and sellers can spot them.  

1. Advertisements

You may have heard an advertisement on the radio that promises if a firm’s realtors can’t sell your house within a certain number of days, they’ll buy it from you. 

This tactic is “usually trying to prey on people who aren’t well-informed,” Fleming told BNN in an interview. In a hot housing market, homes will likely be snapped up quickly, so sellers shouldn’t be worried, he added.

If the firm does keep its promise buy the home, it would likely be at a lower price than what it would go for on the market.

“I think it’s safe to say if something seems too good to be true it probably is,” Fleming said.    

2. Underpricing

A long-standing tactic, underpricing is when an agent prices a house lower than it’s actually worth. The idea, Fleming said, is to boost the competition but it’s not exactly misleading.

“I think people understand a lot of times it’s not so much the price, it’s more so the holdbacks on offers,” which Fleming explains is a way for sellers to attract more buyers by delaying the date the offers are reviewed.  

While Fleming said the holdbacks aren’t popular among the public they are a “necessity” to show off the product.

3. Exclusive listings

An exclusive listing is one that isn’t included on the Multiple Listing Service (MLS) system and an agreement exists where the listing agent is the only person who can bring an offer on behalf of the buyer.

“To be perfectly honest, I see no real advantage for the seller,” Fleming said.  “I think you are crazy in this market to not bring it to the open market.”

Another form of exclusive listing is a “coming soon to MLS” ad with the goal of pulling in a non-represented buyer before the listing shows up on MLS. Fleming warns that this tactic is beneficial to the listing agent, but doesn’t offer the same type of benefit as open market exposure would.

4. Handling multiple offers

There are no set guidelines from any regulatory body in terms of how to review multiple offers, Fleming explained.

While most agents will accept a clear winner, they will often consider better closing dates, higher deposits or even accept another round of bids if the multiple offers are close in number, he said.

A proper procedure should be put in place, otherwise “you go into the process and you don’t really know what to expect,” Fleming said.