A license adds credibility to your work, no matter what industry you are in. Thus, a real estate license makes you an agent that property owners and buyers can trust. However, a license comes with responsibility. One mistake could put your license and career at risk.
One of the common reasons why you could lose your real estate license is through overvaluing a property. Misrepresenting the value of a property could often result in fraud cases.
Why real estate agents overvalue a property
The pressure to secure a deal could drive you to market a property with a value higher than it is supposed to be. In some situations, overvaluing a property might seem like it will improve the property’s ranking on the market. People looking for properties are usually attracted to those with high value. So, when your property has a high value, it is an opportunity to gain more potential buyers.
Other times, you might think you are only helping a potential buyer get a mortgage loan when you boost the property’s value. Among other considerations, lenders would take the property’s value into account when deciding how much they can lend a borrower. A higher property value could trick lenders into approving higher loans.
Consequences of overvaluing a property
While property sellers and buyers have potential benefits from the high property value, they could also sue you for misrepresenting the property’s value. Lenders and appraisers could also find fault when your property’s value does not align with the market. The government takes real estate pricing schemes seriously and often proceeds with investigation. Being involved in overvaluing a property could get your license suspended or revoked.
Overvaluing a property is unethical and seen as a law violation. If you find yourself in a situation where your license is at risk, seeking legal opinions as early as possible could help you manage these challenging times.