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.
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 Also, an outdated home is not worth as much as an updated one.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.
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.
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 is an Ebby Halliday Realtor focusing on farms, ranches, and equestrian properties. Kathryn lives in Poetry with her 7 horses. Contact Kathryn at [email protected]
Sharing my friend's info on real estate myths. Kathryn Roan is a horse expert (for real) and a new realtor in this area – the closest area to Dallas with sandy loam soil and sweet neighbors.
Let us not forget the fees to join a health club to get ABS OF STEEL! Like PETER KLAVEN!
Great stuff, Kathryn, I tell people this all the time!
Thanks for writing this article!
Good article!
Excellent article!! Right on the money.
I could not have written a better article. Good Job!
Well done! The best version of this list I've seen. I'm passionate about #2. I wrote a post about it late last year. Check it out! (Might have to copy and paste) http://jimellishomes.typepad.com/triangle_real_estate_and_/2013/12/do-real-estate-agents-make-too-much.html
Great information!
Bravo!
EXCELLENT article. If only they knew the half of it!!!
So well said-helps me realize again what a bond real estate agents have-no matter where and who they are.
Inspirational! Number 5 and 8 really resonated with me. Too many people think our jobs is easy. If only! Thanks for the write up. I will be sure to share.
Thank you for busting the myths that surround our industry.
Thanks! Well written.
You nailed it. Thanks.
#7: Agents can't go into intermediary. The BROKER does. Agents are appointees of the broker in intermediary. Therfore, agents can give advice to the side they are appointed by the broker to work. They buyer and the seller must agree to intermediary status in writing.
Otherwise, good article!
#7: Agents can't go into intermediary. The BROKER does. Agents ate appointees of the broker in intermediary. Therefore, agents can give advice to the side they ate appointed by the broker to work.
Otherwise, great article!
One agent can't handle both sides, according to TREC and Texas law. Only the broker can. The broker is the only intermediary.
Thanks for all the positive feedback, y'all! It may not be the 'perfect' list, and is certainly not all-inclusive, but I believe it touches on the misconceptions we all hear the most! I hope, at minimum, this list inspired a chuckle.
Enjoyed the article. Plenty of common held beliefs in this writing. Thanks for the share Kathryn…
We listed our house on several FSBO free listing sites. Sold it for only $2000 less than asking. The bank we and our buyer used took care of arranging everything to complete the sale. Not a bad way to go if you're confident in selling 🙂 We did use the services of a very nice realtor to see MLS homes we were interested in buying.
Great article Candy! So true
This is an excellent article – it not only debunks several myths, as the author mentions, but offers a few nuggets of wisdom for prospective buyers and sellers. Do have a read …
Thank you so much for this artical, people need to know how hard we work! BLAKE KAISER
RAALTOR
Ouch!! Unfortunately too true
Great post, thanks!
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