Debunking The Top 10 Myths About Realtors, And Why Being an Agent Isn't All Roses All The Time

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We’ve all heard these questions or statements at one time or another, so I decided to answer them in an easy-to-digest list you can forward to all your associates and misinformed friends.

Whether buying, selling, leasing, or looking, many clients or prospective clients have offered at least one of these statements to us, and we’ve all done our best to suppress a vigorous eye-roll.

So read on for a thorough debunking of the Top 10 Myths About Realtors:

1) You’ll get a better deal if you buy directly from the listing agent.

Not true. In the majority of contracts, the seller has agreed to pay a set commission beforehand. If the buyer has their own agent, the commission is split between the listing agent and buyer’s agent. It makes little difference to the seller either way. In fact, it will likely help you, as a buyer, to have your own representative during negotiations.

2) Agents are paid the entire commission.

Definitely not. For most agents, they are splitting the commission with their broker. It can be as low as 50/50.

3) Agents get paid to drive clients around or show property.

Not so. We only make money when a transaction is closed and funded.

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4) If you’re not being offered as much as you want for your home, your agent just isn’t working hard enough.

Not really. An overpriced home just doesn’t sell. Also, unless it is a cash sale, your home will have to appraise. The appraisal will be based off comparable sales of similar homes in your area that have recently sold. Your agent has no control over this. Just because your neighbor is asking $50,000 more for his home still doesn’t mean that is what it’s worth, or what he’ll actually get for it when it eventually sells. A home that doesn’t appraise will not be financable. Also, an outdated home is not worth as much as an updated one.

5) All Realtors are rich.

While real estate can be a big money maker, it’s also true that 20 percent of the agents do 80 percent of the business. It may seem like an agent makes a lot of money at once on a transaction, but real estate is a very expensive business to be in. Namely, yearly and monthly dues and fees to national and state associations, local MLS, local showing service, and your broker. Plus, the agents pay for gas, signs, advertising, key boxes, websites, professional photography, health insurance, etc. Pretty much anything real estate related comes out of the agent’s pocket. Most are lucky to walk away with 1 percent of a transaction.

LA-Hottest-Realtor

 

Not all Realtors have huge billboards and fancy cars!

6) Realtors are just trying to make a sale, and will lie or stretch the truth to do so.

Again, definitely not. Not only are there legal liabilities, a realtor’s business is based off referrals. They’d rather have you refer three friends than tell three friends about your bad experience.

7) An agent can only show his or her own listings, or those of their sponsoring broker.

Not true. A buyer’s agent can show any listing on the market. The agent makes no more money from their client buying a listing from their personal broker or someone else. That said, the agent will make “both sides” of the commission if they sell their own listing to one of their buyers. In Texas, this causes an agent to go into “Intermediary Status,” meaning they are no longer advising either client, as opposed to double agency where the agent is actually advising both sides.

8) Real Estate is an “easy” job since its just “driving around and looking at pretty houses.”

Real Estate is VERY hard. It is constant marketing, prospecting, and handling complex transactions. It can be a lot of time and effort with no guaranteed return. Agents are trying to make a living like everyone else. It can be extremely stressful. It’s very rewarding to find someone the right property, but until the transaction closes, it’s pretty high stress for the agent as well as the client.

It’s rarely part time. Agents are constantly answering calls, emails and texts. Nights, weekends and holidays included. And it’s not easy either. Agents work with people on the biggest financial transactions of their lives. It’s emotional and complicated.

Not just anyone can be an agent. An agent has to be a special person that is knowledgable, helpful, and very think skinned. We deal with emotional people, rude people and time wasters every day. We have to stay up to date with mandatory continued education classes and be great negotiators.

9) You do not need to talk to a lender until you have found a home to buy.

It is better to have financing worked out before you even start to look. If you do find a home you’d like to purchase, you’ll need a preapproval letter to place an offer. If your potential new home is in a popular area, it may get several offers on the first day. If you’re not preapproved, you could miss out. Plus, you want to know the amount you’ll qualify for, and not be looking at homes outside of your budget or possibly be able to afford more home than you originally thought.

Mortgage House Keys

10) Driving a fancy car or having a bunch of “million dollar listings” is a directly related to how good an agent is.

Not necessarily. Some agents have huge, very visible businesses. Some do not. There are plenty of great agents that provide wonderful, personalized service that do not have a billboard or magazine cover. Find an agent that you get along with, who understands your needs.

Kathryn Roan 1Kathryn Roan is an Ebby Halliday Realtor focusing on farms, ranches, and equestrian properties. Kathryn lives in Poetry with her 7 horses. Contact Kathryn at Kathryn@TexasEquestrianProperties.com

Kathryn Roan

Reader Interactions

Comments

  1. Dena Stevens says

    Ha! I know 2 people whom I like and respect who got their licenses. They thought all these things were true! After representing them several times I must have made it all look easy. They jumped in, did all the reading, took the test and got their licenses. After the licenses arrived in the mail they decided not to get into the business. Really, it’s tragic they aren’t getting into the real estate business they would be good at it. But now they know it’s not easy!

  2. Susan Treleaven says

    Good article yet you forgot a couple of key points.

    Realtor is always capitalized as it is a registered trademark and you must be a member of The National Association of REALTORS to use the trademark. Not every real estate agent is a Realtor. The NAR is one of the oldest trade organizations in the United States of America.

    Secondly, a huge part of the reason that having a Realtor represent you in a real estate transaction is the fact that the organization has an enforceable Code of Ethics, 16, Articles in all. They deal with our duties to the public, our duties to our clients and our duties to one another.

    I am proud to be a REALTOR-Susan Treleaven ASP CRS ePRO GRI SRES Kw Coastal Realty Portsmouth NH http://www.susant.com

    • Justin/JRW says

      Hardly. The R is always capitalized in realtor? Wrong. The National Association of REALTORS is a trademark, the term “realtor” is age old and in no way trademarked. Or in most cases, deserving of the capital R.

  3. Jane Peters says

    You beat me to it on this one. This has been the topic of a lot of conversations lately, how the public don’t understand our business, what we do, and how we are compensated.

  4. Donna Walker says

    This article is just what I expected – realtors think they are performing a great service. – and for that they receive a percentage of your home! A home they never paid for, never worked on, never fixed up! Don’t know many realtors who leave the house EVERY DAY and 7 am and get home at 6 pm or so – the biggest myth about realtors is that we need them at all! Somehow we’ve been convinced that somehow these people with 6 weeks of training or so, are entitled to outrageous sums of money. Try to talk yourself into thinking that you are qualified to earn a lot of money when you risk nothing! It’s because of people like you the prices of housing is escalating.
    Surely you could be more useful to society than to think you actually earn your money?
    For shame to all of you!

    • Britt says

      @DonnaWalker Donna, I’m not a Realtor, and I’m perfectly fine with those who have enough knowledge to buy our sell without help. But I think you underestimate what the value of a GOOD Realtor is. As with all professions, one can find inexperienced people or incompetent people who are Realtors, but there are also lots of very good ones who add a ton more value to the transaction than they take out. I’ve seen lots of examples of buyers/sellers who try to do things without Realtor help who end up regretting it – on the biggest financial transaction of their life! I don’t think a person has to have money “at risk” to earn a living (think doctors, teachers, etc). And the existence of Realtors has nothing to do with the prices of housing escalating – people used Realtors in the past, and they continue to do so today, so they have always been factored into the price of housing. Prices are escalating due to a supply/demand imbalance – lots of people moving here wanting homes, and not enough homes being built to accommodate those newcomers.

  5. Joe Lumbley says

    Your #7 is incorrect. An agent who gets both sides of a transaction does not automatically go into intermediary status unless that agent’s broker (meaning all agents working for that broker) has agreements to represent both buyer and seller. Otherwise, in the situation where an agent sells his listing to someone who walks in off the street and is unrepresented, the seller is considered that agent’s “client” and the buyer is the “customer”. The agent has a fiduciary duty (similar to a lawyer) to the client and a duty of honesty and fairness to the customer. One of the earlier commenters almost got it right but erred when she said that one agent can’t handle both sides of a transaction. S/he can handle both sides as long as s/he has representation agreements with only one of the parties (her client, whether it’s a seller representation agreement (listing) or a buyer’s representation agreement.

    • Joe Lumbley says

      Also, these both the seller and buyer representation agreements are usually in writing, but they don’t have to be. Representation and agency agreements can be generated by the actions of the parties. For example if an agent does not have a written agreement with a buyer but has shown that buyer properties or otherwise behaved like that buyer’s agent, it’s very possible that they’ve created an agency relationship. “If it walks like a duck….”

      Intermediary status is one of the most misunderstood areas of Texas real estate law as well as one of the most complicated. If an agent sees the possibility of going into intermediary status, they should discuss it with their broker and be sure to dot all the i’s and cross all the t’s.

  6. Sharon Harding says

    Not just anyone can be an agent. An agent has to be a special person that is knowledgable, helpful, and very think skinned. We deal with emotional people, rude people and time wasters every day. We have to stay up to date with mandatory continued education classes and be great negotiators. “think” skinned??

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