Unfair Practices Used by Real Estate Agencies That Buyers Often Don’t See

When approaching a real estate transaction, especially in a market like Milan, it is common to assume that the agent’s role is to facilitate the meeting between demand and supply. In theory, that is correct. In practice, however, the process is far less neutral than it appears. 

To better understand how these dynamics actually play out in Milan, including how agents operate, how demand is shaped, and how properties move both on and off market, you can refer to our in-depth guides, where we break down the process from a buyer’s perspective.

In most cases, the real estate agent’s interests do not align with either the seller or the buyer. It is an independent interest, shaped by the structure of their compensation. The objective is to close the deal as quickly as possible and, when possible, with the highest commission. There is also an operational factor that is often overlooked: many properties are managed under time-limited mandates, which creates additional pressure to complete the transaction within a certain timeframe to avoid losing the listing.

Within this context, a number of practices emerge that are not always visible to buyers, but that have a direct impact on the outcome of the transaction.

1. Undervaluing the Property to Create Margin

One of the most common dynamics occurs at the very beginning of the process, during the property valuation.

It often happens that the agency suggests a listing price that is lower than the property’s actual market value. The reasons given are always similar: sell quickly, avoid the property sitting on the market, and capture demand immediately.

From an operational perspective, this strategy works. A property priced below market generates more inquiries, more viewings, and significantly increases the likelihood of closing the deal in a short period of time.

The point is that this positioning creates a margin that could be used later. The property is presented to the buyer as an opportunity, and on that basis, higher-than-standard commissions are often requested. It is not uncommon to see commissions of 5, 6, or even 7 percent instead of the typical 3 or 4 percent, justified by the idea that the buyer is getting a good deal anyway.

In this way, part of the value that the seller could have obtained is effectively shifted into the brokerage fee. This is one of the reasons why understanding how properties are actually priced in Milan becomes essential before entering any negotiation.

2. Inflated Commissions Justified Through Ambiguous Documents (Personal experiences)

Another situation I have personally encountered concerns how commissions are presented and justified.

While searching for a property for a client, I came across a case where the agency requested a 5 percent commission on an already significant purchase price. When asked to explain, they stated that they were not receiving any commission from the seller and therefore needed to recover it entirely from the buyer.

To support this claim, they immediately showed a mediation agreement indicating a 0 percent commission from the seller’s side.

At an early stage of the process, this type of information is very difficult to verify. The buyer has no direct access to the agreement between the seller and the agency and therefore tends to accept what is presented.

The reality emerged later, at the notary stage, when commissions must be formally declared. It turned out that the agency was also receiving 4 percent from the seller.

This means that the document shown during the negotiation did not reflect the actual situation, but was used as a tool to justify a higher fee on the buyer’s side.

3. The Use of Fake Offers as a Negotiation Tool

Another practice that is rarely discussed, but does exist in the market, is the use of non-genuine purchase offers to influence decisions.

This is not a theoretical concept, but something I have either witnessed directly or had explained to me openly by real estate agents, even in collaborative contexts, as part of how certain situations are handled.

The underlying logic is always the same: use an offer, or a simulated offer, to shape the perception of the person on the other side.

One application concerns the seller. An agent may receive a real offer that they believe will be difficult to get accepted, either because it is too low or because the owner is still undecided. In such cases, a second, lower offer may be created to provide a comparison point. Faced with a worse alternative, the seller may begin to see the original offer as more acceptable and become more inclined to proceed.

Another application concerns the buyer. In this case, a reference offer is used to push the buyer to increase their bid. A pre-filled offer may be shown, with a figure close to the minimum price the seller is willing to accept, to suggest that another buyer is already willing to pay that amount. The buyer is then encouraged to exceed it in order not to lose the opportunity.

An interesting detail, which was explained to me directly by an agency during a conversation about these practices, concerns how people actually read these documents. When I pointed out that someone might notice inconsistencies by carefully reviewing the proposal, the response was very clear: in most cases, people look almost exclusively at the price.

Their attention goes immediately to that number, which is perceived as the key piece of information. The rest of the document becomes secondary. And even when someone looks more closely, there are often pre-prepared explanations to justify any inconsistencies.

This is something I also recognized in my own experience. In the case described earlier, when I was shown a mediation agreement stating a 0 percent commission on the seller’s side, my attention focused entirely on that figure, without verifying the rest of the document in detail.

This is why these practices work. Not because they are particularly sophisticated, but because they rely on a very simple behavior: the tendency to focus on the most immediate piece of information, especially in a context where time feels limited.

Situations like this are also connected to how demand is presented and perceived in the Milan market, which is often very different from the reality behind the scenes.

4. Exploiting Information Asymmetry Between Seller and Buyer

The most delicate dynamic concerns the control of information between the parties.

The agent is in a privileged position. They know the minimum price the seller is willing to accept and, at the same time, they have a sense of the buyer’s level of interest and financial capacity.

In some cases, this position is used opportunistically.

It can happen that, when dealing with a buyer willing to pay more than the seller’s minimum, the agent informally suggests submitting a lower offer than the buyer’s actual willingness to pay, with the understanding that the difference will be shared. Part of the benefit remains with the buyer, while the other part is retained by the agent as additional compensation.

This dynamic takes place entirely outside the formal structure of the transaction. The seller has no visibility into what is happening and effectively suffers a loss without being aware of it.

A Necessary Clarification

It is important to be clear that these practices do not represent the entire industry.

There are professionals who operate with integrity and transparency, managing transactions in a balanced way between the parties. However, it would be unrealistic to consider these behaviors as isolated cases. Anyone who works daily in the market knows that they exist and that they have a real impact. 

Conclusion

When buying a property, the risk is not only choosing the wrong one. It is making a decision within a context that has not been fully understood.

For this reason, the real skill is not just identifying a good property, but understanding the structure of the negotiation, recognizing which levers are being used, and maintaining clarity even when all the information seems to push in the same direction.

In this context, the role of a property finder is not simply to find properties, but to bring the negotiation back to an objective level, reduce information asymmetry, and allow the client to make decisions based on data rather than pressure.

Because in the end, it is not just about the price. It is about controlling the process.