Real estate agents are a tight-lipped lot, but here’s why

Real estate agents are a tight-lipped lot, but here’s why

  • Real estate agents are not allowed to disclose all the information that a client may wish to know.
  • For instance, real estate agents are not allowed to label neighbourhood X or Y as being “good” or “safe” and vice-versa.
  • An agent's job is not to decide for the client what a good neighbourhood is but to let the client figure that out for themselves.

If you’ve been in the property industry for long enough, chances are you’ve interacted with several real estate agents. Agents provide prospective clients with useful information to enable them to make a buy or rent decision. But the agents are sometimes reluctant to provide certain information, but it is not their fault.

Property brokers and agents operate in a highly-regulated space, and as such, they can only disclose so much to their clients.

Why can’t real estate agents answer all questions?

The fair housing laws regulate all real estate agents. The regulations are meant to prevent discrimination and steering. The Federal fair housing laws restrict the agents from providing discriminatory information relating to race, colour, religion, sex, national origin, disability or familial status (kids, no kids, married, single, etc.).

Real estate agents are not allowed to talk about any of the above-stated matters, at all; the restriction also limits them from expressly saying “this or that is a good neighbourhood.”

Why can’t real estate agents talk about how good a neighbourhood is?

It is prevalent for investors and tenants to ask the question: “Why is my agent reluctant to tell me whether this or that neighbourhood is any better? We’re relocating from two states away and have no idea where the good neighbourhoods are.”

But in all fairness, a “good” neighbourhood is relative; the agent might have a very different perception of what a good area means. A pleasant surrounding may mean having a huge backyard with a perimeter fence and neighbours who you don’t have to talk to. To someone else, it merely means living next to social people.

What you like might not be what some else will prefer, and if you try to talk every client into buying your idea of a “good” neighbourhood, it only amounts to “steering”. If clients are steered towards a particular neighbourhood that is considered good, over time, the value of the properties in that area will rise as the opposite happens to the other regions.

A real estate agent’s job is not to tell you which neighbourhoods are good and which ones aren’t; It is the responsibility of a client to conduct proper due diligence and rent or invest in their area of choice.

By Damian Wood
As an experienced trader, I work for myself managing my own small portfolio and also contributing on several investment news sites. I mix my passion for the industry and journalism to bring my readers informative and trustworthy articles.

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