10 Things Real Estate Agents cannot Do
Real estate agents are at the center of the buying and selling process of a property and take on significant responsibility. However, there are certain practices that are beyond their reach or are legally prohibited. Both buyers and sellers should be aware of these limitations, as they may violate the real estate ethics code or the law. At the same time, agents must adhere to these regulations to avoid legal consequences and potential lawsuits. Regardless of where you are in your real estate transaction, this guide can be helpful. So let’s take a look at what real estate agents cannot do.
1. Evaluate Properties
One of the main activities that real estate agents cannot perform is property evaluation. Although they are familiar with market trends and the potential value of a property, they are not licensed appraisers. Conducting a formal appraisal requires specific knowledge and qualifications. Therefore, buyers and sellers should consult a licensed appraiser if they need an official estimated value, such as during the mortgage application process.
2. Legal Advice
Real estate agents typically do not have legal training and therefore cannot act as lawyers. While they are familiar with the legal requirements related to real estate transactions, they cannot advise on legal matters. Buyers and sellers should consult a licensed attorney to draft contracts and obtain support in enforcing their rights. However, real estate agents can provide advice within their limits.
3. Engage in Discriminatory Practices
It is legally prohibited for real estate agents to engage in discriminatory practices. In many countries, anti-discrimination laws protect buyers from unfair treatment based on race, gender, religion, national origin, skin color, marital status, or disability. Therefore, agents cannot refuse to sell or rent a property based on these characteristics and must ensure they comply with fair housing laws.
4. Misrepresentation
Misrepresentation refers to providing false or misleading information about a property. This can include exaggerating square footage or omitting defects. Agents have an obligation to provide accurate information to all parties, as false statements can have serious legal and financial consequences. A high level of professionalism and ethical standards is essential to provide the best possible service.
5. Lie About Existing Offers
It is illegal for real estate agents to lie about existing offers on a property. This practice, often referred to as "phantom bidding," violates the ethics code of many real estate associations. Agents are expected to maintain a certain level of honesty and should not invent offers that do not exist.
6. Withhold Offers
Agents are required to present all offers to the seller promptly, regardless of their terms. Even if an offer is below the accepted price, agents must inform the seller, thus giving them the opportunity to reject it.
7. Offer Below Market Value
Offering a property at a price lower than what the seller is willing to accept is illegal. Agents cannot use fraudulent tactics to attract buyers and must always act in the best interest of their clients.
8. False or Misleading Advertising
Agents may not publish misleading or inaccurate advertising, as this violates their ethics code. The use of outdated or digitally altered photos to attract buyers or sellers is not permissible. Advertising must be clear and truthful.
9. Tax Advice
Real estate agents are not qualified to provide tax advice. While they can offer some basic information about the tax aspects of properties, they are not tax advisors. Buyers and sellers should consult a licensed tax advisor or accountant to address specific questions regarding tax obligations, deductions, or other relevant topics. Professional tax advice is particularly important, as errors in this area can have costly consequences.
10. Speaking Negatively About Other Agents
Agents should not speak poorly of other real estate agents or make negative comments about their companies, as such practices are unprofessional and violate ethical standards. It is essential that they treat their colleagues with respect and courtesy, regardless of differing opinions or approaches.
Conclusion
In summary, real estate agents can perform many tasks, but there are certain legal, ethical, and knowledge-based limitations that must be considered. These restrictions are designed to protect all parties involved and maintain standards. Real estate agents should not exceed their role, engage in discriminatory practices, or intentionally misrepresent facts. By adhering to these limitations and ethical standards, real estate agents can provide the best possible service to their clients and maintain a good reputation in the industry.
For top-notch real estate advice, sales, and rental services in Barcelona, Hoffmann Real Estate is at your disposal at all times.