Do Real Estate Investors Make Bad Brokers?

Added March 23, 2009 by Ilyce R. Glink

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Summary: Many real estate brokers also dabble in real estate investing. Investing in real estate themselves could help your broker understand the market and the real estate process. Some brokers that invest in real estate might take advantage of their clients, but not all.

Q: My real estate broker buys a lot of properties. My brother-in-law says that's a bad sign because he may be taking advantage of sellers.

I did become a little concerned last week when the broker recently suggested that I should lower my price if I want to sell. What do you think? Should I find another broker?

A: There are some unethical brokers who will try to make you think your property is worth less than it is, so they can purchase the property at a discount.

Not every broker who suggests you lower your price is looking to snap up your home and flip it for a profit. There are always a few bad apples in every business, and they, unfortunately, tend to give the whole industry an unpleasant smell. Your job is to know what your home is worth. If you know the market value of your home, no one will be able to take advantage of you.

As for your particular broker, it's tough to pass judgment from a distance. Just because he invests in real estate, that doesn't mean he's a bad broker. In fact, some of the best real estate brokers dabble in real estate investing. In some cases, it means they know the process better than peer brokers who never purchase or sell properties.

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