Dishonesty in Real Estate

by Michael Repka, Esq.

Dishonesty in Real Estate — Fraudulent Marketing Techniques

There are an awful lot of real estate agents out there and they all seem to be scrambling for the same potential clients. Given the low barriers of entry in the real estate industry, and the tremendously high commissions, some agents give in to the temptation of fraudulent marketing.

Expired Listings

Whenever a listing expires, or is canceled, there seems to be an inevitable “feeding frenzy” of agents trying to take over the listing. Unfortunately, one of the most common dishonest techniques is for an agent to pretend that they have a buyer that is interested.

These dishonest agents will contact the sellers claiming that they have a buyer ready to put in an offer, and in some circumstances, they will even bring someone pretending to be a buyer over to the house, only to have that “buyer“ change their mind at the last moment. The agent then has their foot in the door to argue for the listing.

Rest assured, an agent that really had a buyer would reach out to the former listing agent because experienced real estate agents know that doing so the best way for the seller to take the offer seriously.

Overstating Experience or Sales Volume

Another area of concern are agents that exaggerate their experience or sales volume. Some agents will try to lump in the sales experience of other agents in their office or sales experience from when they were merely an assistant to an experienced agent.

Some agents even go so far as to present newspaper ads from their brokerages to potential sellers.  These ads lump together all of the sales of all of the independent contractor agents in their office, yet some unscrupulous agents imply that the stats are reflective of their own market share or experience.

To safeguard against this, sellers should ask for a detailed list of all of the sales that the agent has personally handled. This should be provided in writing with a clear statement saying that the agent was the one responsible for the listing.

Overstating Services Provided

Many agents are particularly good at giving the impression that they are going to provide marketing or services that they don’t actually provide. Perhaps the most common example of this are agents that emphasize a “secret network” of buyers that they know.

Another common example is that some agents imply that they are going to market the home on Zillow, Trulia, and other websites, when in fact all homes on the MLS are automatically syndicated to all of those websites unless the agent or the seller proactively opts out.

Sellers should also watch out for agents that imply that their office will provide a real estate attorney if something goes wrong. To my knowledge, DeLeon Realty is the only real estate office that provides free access to an attorney to handle a contractual dispute or to help answer specific questions related to the preparation of disclosures.

The purpose of this article is not to say that all real estate agents are dishonest. However, there are a significant number of dishonest real estate agents out there that are very good at misdirection and misrepresentation.  Therefore, a prudent seller should ask agents to put everything in writing.  Also, all listing agreements should include an addendum that specifically outlines what marketing, home preparation, professional services, and staging the agent will provide for their listings.


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