So you think you have found everything you need to know about how real estate agents work from ton of misinformed and well-meaning websites? Here's what you need to know about real estate agents.
9 Myths About Real Estate Agents
1) The
Higher the Price of a House, The More the Agent Makes
Not True. Have you ever heard someone
say "Every dollar more you pay for that house makes the agent more money,
so don't trust them." That is a misnomer. The difference between $400,000 and
$420,000 for sellinginherited house is about $3,000 to an agent Do you think the agent pays
attention to the commission difference of a $20,000 price spread?
2) Real
Estate Agents are Always Late for Their Appointments
Not True. There is no excuse for
habitual tardiness among any professional. It doesn’t matter if it's your
doctor, your plumber or your agent. Everyone deserves to have their time respected,
and respect is earned by providing professional service and being on time. If
your agent has a self-deluded impression of his self’s own importance, find
another agent. Professional agents who take selling house
and selling land listings are
on time for their appointments. Clients who listen to their agents' excuses
allow their tardiness to take place. The best agents are always prompt for
their appointments. Don't let a few bad agents give the entire industry a
perception it doesn't deserve.
3) Realtors Must Show You Homes On Demand
Not True. Unless you have a signed
buyer representation agreement with an agent or that agent represents the
seller 100%. That agent you call doesn't have to show you any homes. You can't
call a local real estate office and demand service or demand to be shown
houses. Like you, agents don't work for free.
If you aren't planning to write an offer with the Realtor you call, be
upfront and don't waste the Realtors time. Don't expect the Realtor, who is not likely to
earn anything, to be excited about jumping in the car with you. That agent is
not obligated to show you any houses. Nor
is the listing agent obligated to show you a listing if you are represented by
another agent without a request from the other Realtor.
4) The Less Commission You Pay to Sell, The More Money You Will Make
Not True. Every discount real estate brokers like to propel this myth. They will claim to save homes seller’s money by charging less commission. The reality is that agents who are top producers and succeed in real estate business do not discount their services. Why? Because they don't need too. Less than full service brokers cannot afford all the bells and whistles paid for by full service brokers which many times tend to bring higher offers. It comes down to, you get what you agree to pay for. A 2.5% reduction in commission doesn't amount to much when your price is discounted 5% or more because your agent couldn't afford full market exposure to sell your house.
5)
Agents Receive Kickbacks from Lenders / Title Companies / Etc.
Not True. Since way back in 1974, real
estate agents have been prohibited from receiving any type of kickback or favor
from real estate vendors. It's against the law. It is also against the Real
Estate Settlement Procedures Act (RESPA). Some Realtors are slower than others
to realize how the law affects them, but most have heard of RESPA and would not
jeopardize their license, regardless of the temptation.
6) An
Agents Home Inspector Will Favor the Agent
Any smart agent wants full disclosure. This is
because they want what is best for their client but also because they do not
want to be sued. Agents must disclose all material facts. A buyer is always,
without fail, better off knowing the truth about a house. Good agents want
their buyers to receive full disclosure and are willing to fight for repairs on
their buyer's behalf or help them cancel the transaction.
7)
Agents Make Too Much Money
Not True. A typical agent annual
average income is less than $46,000 a year. You will find that about half the agents
in any brokerage firm close less than four transactions a year. Also, office fees need to be paid, MLS fees
and lockbox fees are deducted, overhead and expenses for the agents are
deducted, errors and omissions insurance and office supplies are paid.
8) Agents Will Say Anything to Make the Sale
Not True. There are occasions that
some agents will lie to you, it is not fair to paint all agents with such a
broad paint brush. Top producing agents, who enjoy a solid reputation in the
community and practice real estate with high ethical standards, are very
careful to uphold a client's trust. Making
misrepresentations or false statements is against the law and the ethical code
set by the Board of agents. Any agent who breaks fiduciary relationship or fail
to disclose material facts to their clients are subject to legal prosecution
and a loss of their real estate license.
9) Agents Should Tell You About Crime, Schools & Ethnic Make-up of Neighborhoods
Not True. Fair housing laws prevent agents from discriminating against several protected classes, which automatically prohibit them from disclosing anything that remotely relates to protected classes. It may come as a shock to potential home buyers that agents cannot disclose crime rates, school stats or ethnic mixes of neighborhoods. If that kind of information is important to you, an agent can tell you where to find it but cannot provide it.
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