February 19, 2014
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/firm. It can be as much 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 Also, an outdated home is not worth as much as an updated one.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 BC, this can cause an agent to go into a 'Customer Relationship', meaning they are no longer advising either client, as opposed to Dual 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 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.
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.