7 Deadly Sins Of Real Estate Agents

Being a real estate agent is not an easy task. It comes with a lot of duties, responsibilities and temptations. Lawyers, estate surveyors, brokers and other realtors are all under this umbrella. Once you are acting for a client in a real estate transaction, you are in a way acting as an agent for your client who is the principal. It really doesn’t matter if you have the power of attorney or not because agency relationship can either be direct or implied.  

History has shown us how many in the past have fallen for these temptations. However, it takes a strong zeal and firm resolution to avoid making these foolish mistakes.

Greed - Too much love for money causes greed, especially for those who are not able to control their taste for expensive luxury. Everyone needs money but when your need for it becomes superficial, you may be pushing yourself to do all it takes to have it. There are many stories we have read about greedy real estate practitioners ripping their clients off.

For instance, a certain lawyer acting on behalf of a client inflated the price of a property in order to make himself richer. He was later caught and disciplined.

The price of greed is often steep.

Greed can lead to the transgression of every law known to the human race. You can eliminate greed by controlling your spending habits and improving your character.

The love of money is the root of all evil – 1 Timothy 6:10

Keeping Secrets: In the law of agency, it is a transgression to keep secrets from your principal. You owe him a duty to disclose all information regarding your assignment.  If you discover that something is wrong somewhere, NEVER KEEP IT TO YOURSELF.

Sometimes, you may be tempted to hide a piece of information from your client just because you want him to close the deal, that amounts to a serious transgression.

Also, making a secret profit is one of the biggest transgressions. A real estate agent is not allowed to earn any other money in the transaction except the one he has received from his principal. It does not matter if you earned the money. The law of agency requires you to disclose it to your principal. It is up to your principal to either chose to let you have the profit.

If the agent makes a secret profit and refuses to disclose, the principal is entitled to punish the agent by demanding for the profit.

Money Laundering: This one sin we read about in the newspapers every day. It has also become an issue of great concern how many real estate agents are employed to help to launder money.

When money is obtained in a corrupt manner and used to purchase real estate properties, this is a real bad transgression.

The culprits are both the principal and the agent as they are both liable.

Engaging in money laundering can lead to prosecution and conviction.

Slothfulness: There is a lot to do when acting for a principal especially in real estate transactions.

Being slothful can be one of your biggest undoings. When you are slothful, you miss out on a lot of crucial details.

Most real estate agents are expected to carry out physical and legal due diligence on behalf of their clients. However, if you succumb to slothfulness, you would not only be giving your client wrong advise, you would also be putting your career in jeopardy.  

Undercharging: Undercharging is also a transgression of the law of real estate.

When a real estate agent charges or accepts to be paid a fee that is considered too low, then it hints at something not going really well for him.

Although it is an arguable fact that both the principal and agent are free to decide the amount or percentage to pay the agent, the profession has a standard which every real estate practitioner should adhere to.

Ignorance: If you are in the real estate business, you have to be and act like a professional.

There are no rooms for mistakes.

Hence ignorance of the law of real estate and the general practice is a grievous transgression of the law.

You may want to ask why.

The reason is that no knowing the law, or the latest trends of real estate practice might lead you to commit blunders. Some blunders are costly to your client and you may be professionally liable.

Ignorance of the law is not an excuse.

Tax Evasion: Tax evasion is when you have received a fee and refused to deduct and pay your taxes to the appropriate authority. This is a serious transgression of the law that could catch up with you anytime.

As a real estate agent, you should be aware that every fee or commission you receive is subject to Value Added Tax (VAT).

This tax is remitted to the Federal Inland Revenue Service (FIRS). There are also taxes that go to the state where you reside such as Personal Income Tax and Stamp Duties.

You need to be aware of these taxes and ensure that your slate is clean, otherwise, you may be looking at heavy fines and penalties.

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There are none of the sins of real estate agents that cannot be forgiven especially if the sinner confesses and makes restitution. If you have committed any of the sins just make sure you do not go back into them.

About The Author

Ezra Akintonde, Esq is a real estate acquisition lawyer whose work is centred around the development of real estate acquisition and management.