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As a real estate professional, it’s fair to say that you’ll have plenty of opinions regarding the properties you show buyers. Depending on your time in the industry, you may have seen hundreds, even thousands of listings at a wide variety of price points. Over time, you’ll cultivate a personal opinion about properties, sometimes within seconds of stepping over the threshold. But when should you share your opinion with a buyer? It’s not always appropriate to tell them what you think, but in other cases, sharing your thoughts is required by law. Here’s how to walk that line.
What the law says
Real estate agents are obligated by professional ethical standards and the law to preserve confidential information about a client or property (or a seller’s motivation for selling). On the other hand, the National Association of Realtors also requires its certified REALTORS® to disclose information provided by professionals or available to the public via databases (i.e., flood zones or any large planning projects in the works).
Real estate agents must also comply with state and national anti-discrimination and fair housing laws. This non-preferential access to housing opportunities is critical, especially in light of a recent study that found that 75% of sellers believe real estate agents give certain clients preferential treatment. It’s crucial for preserving the public’s trust in real estate professionals (and to stay compliant) that agents follow both the spirit and the letter of the law in this regard.
It is also illegal to share demographic data on a neighborhood about race, religion, disability, and other protected classes. This also includes offering an opinion on a school district as “good” or “bad.”
When to stay quiet
One of the most essential guidelines on when to stay quiet regards personal taste. Do not comment on the design or aesthetics of a property unless a buyer specifically asks for your opinion. Again, err on the side of data. For example, instead of giving a negative opinion of a specific type of architecture, educate your buyer on common features of that architecture and how a property conforms to (or deviates from) those.
You should also refrain from offering a specific emotional reaction to a property (either overly negative or overly positive) and not offer what might be considered a legal statement about the condition of a home. Save these assessments for a licensed inspector or a real estate attorney.
When to share your opinion
So when is it appropriate to share your opinion with a buyer? There are specific situations where not only is it appropriate but also part of your duties as their real estate agent.
1. If a buyer asks for your opinion
Buyers, especially those with little experience in real estate, will want your educated opinion on their potential purchase. For most people, this is the largest purchase they will make in their lifetime, and it’s normal to want to ask a professional for their thoughts. When this situation occurs, provide an honest but professional response.
It helps to focus again on data and your professional insights rather than a personal preference. If asked, frame your response on whether a property meets a client’s stated goals or has the features they need instead of offering a personal value judgment.
2. If you see red flags
Even if you are not a licensed inspector or contractor, some properties have glaring red flags that buyers need to know. These include structural problems, outdated electrical systems, or signs of water damage that your buyer may overlook. Again, you’re not diagnosing the issue, simply pointing out its potential existence.
In some cases, buyers looking to invest in a fixer-upper may move forward even with these red flags. This is their prerogative, and it might match their real estate investment goals. However, ensuring they are aware of these issues is well within your duties.
3. When you have market insights
As a real estate professional, you can access data points your buyer cannot. This includes how the house compares to others in the area, its resale potential, and whether or not the listing price is fair. Other market insights might include if an area has any other planned development or significant modifications, such as a street widening project.
4. When you have industry insights
There’s a reason that real estate professionals need licenses to represent buyers and sellers.
The industry can be complex and challenging to navigate, and buyers need help understanding the process and what a specific listing might require. In this case, it is your job to give buyers an idea of what to expect from a transaction (from offer to closing) and to help them consider if it matches what they want.
5. If the property has value-adding features
Many first-time home buyers don’t know what they don’t know. They may have a specific idea of the number of bedrooms and bathrooms they want, but not much beyond that. As a real estate agent, you can highlight value-adding features that buyers may overlook. This includes things that make the property a great investment, like its location, any recent renovations that were done well, or the potential to convert the property to a rental.
The key here is to understand your buyer’s goals and highlight a property’s features that might help them reach them.
6. When expectations are unreasonable
Buying a home can be overwhelming and exciting. When buyers visit many properties, it’s easy to get carried away by a house that doesn’t align with their needs, budget, or goals. In this case, it is appropriate to share your opinion of a home with a buyer who may have lost sight of what they are actually looking for.
The client decides to purchase a property, but it is your job as a real estate professional to steer them towards listings that match their stated goals and keep their budget in mind.
The final opinion
Buyers hire their real estate agents based on professional experience, but they are also looking for someone who can advise them on their purchase. They want someone who knows what to look for in a property and can offer insights. Ultimately, thinking strategically about sharing your opinion on a house is essential and can help you better meet your client’s needs as they navigate their purchase.
Luke Babich is the CEO at Clever Real Estate.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the editor responsible for this piece: zeb@hwmedia.com.
