I’ve had it on my list for awhile now to write a blog post about these myths. I’ve experienced each of these in my own way the last several years of working full time as a licensed Realtor. I’ve met several people who ultimately didn’t understand the job of a Realtor. I’ve had to explain, educate and debunk many of these myths with friends, family and customers myself. This is one of the better articles that explains a lot of what I’ve been through. You’ll see I’ve added my two cents below each of them.
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.
She’s right. It all depends and anything can be negotiated. Ultimately, if you’ve been working with your Realtor or buyer’s agent who has been helping you find the right place then you’ll want them to be there to represent you through the process.
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.
Yep, definitely not. It usually is split 3 ways if another agent is involved and then you still have to split that balance with your broker. The other myth is that there is a set commission rate. That is illegal. There is no set commission rate. There are “industry standards”, but no percentage set in stone.
3) Agents get paid to drive clients around or show property.
Not so. We only make money when a transaction is closed and funded.
Definitely not so, sometimes I wish there was an hourly wage, but I don’t receive a 9 to 5 paycheck. And some transactions can take several months and sometimes over a year or more depending on the type of transaction and contingencies involved with the sale.
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.
A seller has to be motivated to sell their home, period. If not, they are wasting everyones time and money. Seller’s need to be open to the feedback they are receiving from their Realtor, other Realtors and the Buyers who view the property because that is their market.
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!
I drive a 2013 two-door Fiat 500C Pop. Before that, I sold my KIA SUV and bought a 4 stroke scooter with a sidecar and drove that for 6 years after the economy tanked. I’m a Millennial. I know that can mean a lot of things to a lot of different people, but for me it means that I grew up with very different priorities. I want to be apart of changing the world for the better in any little way that I can. I want my job to mean something and I want to be able to make a difference. I also had the Internet growing up and FernGully and then An Inconvenient Truth which opened my eyes and my heart to the larger picture that us humans have on our planet. I’m a huge nature lover, so I try to be environmentally conscious and economically aware of my impact and the footprint I’m leaving behind for the next generation.
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.
When I first got into real estate at the age of 19, I discovered there was a dark cloud that hung over Realtors and it also made me leery. The old school art of selling has changed. After the housing market crash and then purchasing our first home, I knew I wanted to get back into real estate to help young people like us. I don’t look at myself as a salesman, but as a consultant or like an advisor of sorts. It’s a tough business to navigate and I wanted to be an advocate for the young first time home buyer. Getting back into real estate at the age of 25 wasn’t about the money. It was because I knew I loved it and now I knew it was about doing the right thing because I had seen what was happening behind the scenes.
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.
We all have our go-to hair dresser, mechanic, or our go-to accountant, financial advisor, etc. when we need a specific service. We have built a relationship with them, they know what we want and we trust them. Same goes for a Realtor. In Florida, majority of the time we are transaction brokers, which means we can work for both the Buyer and the Seller. You can use the same Realtor for any and all of your real estate transactions as long as they are licensed in your state. If not, they will be able to refer you to a good agent in another area or another state. So, when you find a Realtor you enjoy working with, don’t call the number on the sign. Always call your Realtor that you have on speed dial when you see a property you like or that peaks your interest. They will be able to get you all the details on it and the showing instructions to get you inside to view it. There is an exception in the State of Florida for mobile homes. There is a special license to sell mobile homes, but your Realtor can still make the call for you to find out all the right information.
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 thick 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.
ANOTHER TRUTH BOMB!
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.
The first and best piece of advice I can give any first time home buyer is to find a local lender you want to work with and get all of your financing ducks in a row before you start looking. Especially in this type of housing market we are in now. You want to be absolutely ready to pull the trigger if the right house comes along.
10) Driving a fancy car or having a bunch of “million dollar listings” is 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.
Some of the best advice I’ve received over the years from very successful Realtors is that “a great Realtor doesn’t need to be seen or flashy to be great.” In fact, some of the flashiest agents don’t have the long time experience needed and trusted or the personality to be successful in this business. It’s about the customer and giving genuine, quality service. A good Realtor who sleeps really well at night doesn’t need to flaunt their success to prove themselves.
Kathryn Roan is an Ebby Halliday Realtor focusing on farms, ranches, and equestrian properties. Kathryn lives in Poetry with her 7 horses
Subtext Content written and added by Samantha J. Irvin