Top 10 Myths About Real Estate Agents
The Top 10 Myths About Real Estate Agents
Buying or selling a home is a big process. It can be confusing, stressful, and tends to make you feel like you have no idea what’s going on. To make the process easier, real estate agents are trained to help. It’s their specialty and one of the best ways to make the buying or selling process as simple as possible. Unfortunately, for whatever reason, some people have a lack of trust in the real estate business. They think that agents are self-motivated employees who are trying to take everything they can get from the seller. This isn’t even close to the truth. Real estate agents rely on their reputation to build their careers, so why jeopardize that? To give you some clarity on the industry, here are the top 10 myths about real estate agents debunked.
1. Real Estate Agents Keep the Entire Commission
A typical commission rate is about 6% of the selling price. Many people believe that the entirety of that 6% goes straight into their real estate agent’s pocket, but it doesn’t. It gets split between the involved parties. So, at the end of the day, you’re not even really paying your real estate agent that 6%—you’re paying the brokerage. The brokerage then takes that money and splits it between your real estate, the buyer’s real estate agent, and the broker himself. The reality of it is that the 6% sum ends up being split three ways, which can substantially decrease the amount of money that ends up in your real estate agent’s pocket. Plus, the commission rate of 6% isn’t set in stone. It’s an industry standard, but many times it’s negotiable and can fluctuate between 5% and 7% depending on the home.
2. Agents Get Kickbacks
When working with your real estate agent, they’re going to make recommendations on certain appraisers, surveyors, lenders, and eventually, inspectors. Many people think that this means the agent will end up getting a kickback if they use them for their services. This isn’t true. The reason that your agent is making these recommendations is because they know and trust these people to do their job well. The Real Estate Settlement Procedure Act (RESPA) makes it very difficult for any corruption like kickbacks to occur and a good real estate agent won’t take the risk.
3. Real Estate Agents Sell Their Own Homes for More Money
For some reason, people have this notion that real estate agents put in more effort and sell their own homes for more money than they sell their client’s homes—even if it’s not worth more. This isn’t true. Many real estate agents don’t have time to waste trying to pinch a few extra dollars out of their own home. They take the same process they do when selling client homes. If anything, an agent might sell their home for less so they can focus on work and expedite the process.
4. Once You Work with an Agent, You’re Stuck
At the beginning of your relationship with a real estate agent, it’s important to take the time to ask questions and get a feel for how well you’ll work together. If you end up signing a contract and find that it’s not a good fit down the line, you’re not always stuck. First of all, many contracts are short and only last about six months to a year. However, if things just don’t seem to be working, it is possible to ask to be released from the contract early. Just make sure you’re honest and try to end things early to avoid wasting either of your time.
5. Agents are Responsible for Telling you Everything About a Neighborhood
A lot of home buyers think that their agent is responsible for disclosing all of the nitty-gritty information regarding the neighborhood that a house is in—they’re not. In fact, there are plenty of laws in place that make doing so illegal. The Federal Fair Housing Act prevents real estate agents from disclosing certain information, especially information that could discriminate against a protected class. Some things that real estate agents can’t disclose includes crime rates, ethnicity of the neighborhood, and even school statistics. If you want to know this information, you have to contact the respective facilities on your own.
6. Agents will Say Whatever it Takes to Make a Sale
A lot of people think that their agent is only saying certain things because he wants to close a sale. A good real estate agent will work with your best interest at heart. Some agents will lie to you, but that’s why it’s important to make sure that you find someone you trust, who has a good reputation, and who’s known for their honesty and integrity. When you work with someone that you feel comfortable with, you’ll be more likely to take their recommendations to heart and will probably end up selling your home faster and for a better price.
7. Marketing Expenses are Reimbursed to the Agent
You know all of the marketing campaigns, websites, video production, 3-D tours, professional pictures, and other tools that agents use to sell your home? They have to pay for them on their own. Marketing expenses aren’t reimbursed to the agent and therefore, are considered an out-of-pocket expense. If the seller ends up pulling their home off of the market after all of these attempts have already been made, the agent incurs a loss. This money spent is not reimbursed and is therefore a risk. Good real estate agents are willing to take the risk if it means potentially getting your home sold for what it’s worth.
8. It’s Better to Overprice Your Home and Come Down Later
Many sellers believe that putting their home on the market at a higher price is the best way to proceed through a sale. If no one shows any interest, they can always lower the price, right? Yes and no. You can lower the price over time, but that means that your home is going to sit on the market without any interest. Then when you lower the price, it doesn’t always mean that the interest will be sparked. Some people see a home’s decreasing price as an indication that other buyers didn’t find it appealing and therefore they might not be interested in seeing it. It’s better to set the price competitively from the beginning to get the best interest possible.
9. You Don’t Need a Real Estate Agent
While there are plenty of options to put your house on the market for sale by owner (FSBO), it’s not always the best idea. Yes, there are thousands of ways that you can market your home, advertise it, and sell it without an agent, but buying or selling a home is a huge transaction. If you’re not familiar with the process or don’t know the details as to what goes into it, it’s going to be extremely difficult to do it without an agent. Real estate agents have years of experience and their sole job is to understand the market and the entire transactional process so that you get the best deal without an overbearing amount of hassle. When you forego an agent, just be prepared to do extensive research on housing markets and legal contracts.
10. All Agents are the Same
This is probably one of the most outlandish myths about real estate agents that floats around. All real estate agents are not the same. Every personality is different, and some people are better at persuading and selling than others. With an experienced real estate agent, you’re also going to get a wider list of contacts and a more expansive network. A new agent might not fully understand the market, the legal knowledge, and can struggle with properly assessing the realities that goes into a sale or purchase. Not all real estate agents are the same and if you want to get the most out of buying or selling your home, it’s important to find one that will work in your best interests and who has the experience necessary in such a dynamic market.
If you’re looking for a real estate agent who is honest, works with integrity, and will always put your best interests at the forefront of decisions, First Star Realty is here. We’re committed to providing five-star realtor services to Northwest Arkansas and work with you throughout the entire buying or selling process so that you have the peace of mind you need during such a life-changing experience. Our clients always come first, which is why we only measure achievements through client satisfaction. If you’re ready to buy or sell a home, contact us today. Our team of highly seasoned real estate professionals is dedicated to providing exceptional, personalized service to all of our clients. Call us today at 479-267-1600 or fill out a contact form on our website.