My husband and I were thrilled to finally be in a position to buy our first home together. We found a real estate agent through a friend's recommendation and trusted that she would guide us to the perfect starter home for our young family. Little did we know, our agent had a different agenda that ended up costing us time, money and heartache. We later learned that we were victims of a shady real estate practice called "steering."
What is Agent Steering Anyway?
Steering is when a real estate agent influences a buyer toward or away from certain properties for reasons that benefit the agent, not the client. Some agents steer buyers to listings that offer higher commissions, even if the home doesn't match the buyer's needs or budget. They may also steer clients away from lower commission listings or homes sold by owner. Discriminatory steering based on race, class or other protected factors is also illegal.
Basically, steering puts an agent's financial interests ahead of their duty to help the buyer find the right home. It's unethical and can really hurt buyers, as I learned the hard way.
From Business Insider, "America's hidden homes - These are the houses your real-estate agent doesn't want you to see."
Steering is what got the National Association of Realtors into trouble. It is part of the 2024 settlement agreement. Read more here, HOME BUYER'S AGENT SERVICES AND COMPENSATION - WHO PAYS FOR WHAT?
The Red Flags We Missed - How To Tell If Your Agent Is Steering You
Looking back, there were definitely warning signs that our agent was steering us, but we were so eager to find a home that we missed them. Here are some of the red flags:
1. She was always unavailable to show us homes we found online that seemed promising. Later, we realized these were likely lower commission listings she wanted to avoid.
2. Our agent kept pushing homes - real estate agent steering - that were over our stated budget, emphasizing how the pricier homes would be a better investment. In hindsight, she was probably focused on a bigger payday.
3. When we asked about putting in an offer on a "for sale by owner" home, she dismissed it as too complicated. Now we know that she likely wanted to avoid a lower commission or no commission.
4. She made offhand negative remarks about certain neighborhoods that seemed to be based more on stereotypes than facts. An agent should give objective guidance and info to help buyers decide for themselves.
The Wake-Up Call
What finally opened our eyes? We found our dream starter home online that checked all our boxes and was well within budget. But when we asked our agent to show it to us, she came up with excuses, saying it would surely sell fast and that we should look at a pricier house instead.
That didn't sit right with us, so we did some digging. Turns out, the home was offering a lower buyer's agent commission than many other area listings. Suddenly, everything clicked. Our agent had been steering us the whole time to maximize her profits, not to help us get the right home for our family.
Lessons Learned
After firing our agent and starting over with someone who truly put our interests first, we finally found the perfect starter home. Along the way, we learned some tough lessons about steering in real estate:
- Always prioritize your needs, wants and budget - not your agent's opinions. You're in the driver's seat.
- Do your own research in addition to considering your agent's advice. If something feels off, don't ignore it.
- Ask agents directly about their commission structure and how they avoid conflicts of interest. The right agent will be upfront and transparent.
- Don't be afraid to walk away if an agent is pressuring you or not providing the service you deserve. There are plenty of ethical agents out there.
The Bottom Line
Buying a home is stressful enough without having to worry about your own agent working against you. While most agents are honest and professional, steering can and does happen. By knowing the signs, advocating for yourself and partnering with an ethical agent, you can avoid the nightmare we went through. Here's to finding your real estate happily ever after!
