5 Myths About Real Estate Agents

Most people enter the world of buying and selling real estate with many misconceptions of real estate agents – such as what they do, how they get paid, how much they make, and what their job really is.

The basics are quite easy though. In general, you have 1 agent working with the buyer and 1 separate agent working with the seller. Unfortunately, this is where the line is drawn on what’s clear and what isn’t. Without further ado, here are 5 common myths about real estate agents.

1. Agents receive a “standard” 6% commission.

Most people think that both the listing agent (working with seller) and the selling agent (working with buyer) receive a 6% commission and pocket the entire amount… If only that were true!

The reality is that there are 4 parties that split the commission, which has no “standard” amount.  There is a brokerage and agent on both the buying and selling side of the transaction which all share the commission amount. The amount can sometimes be negotiated by the seller, but just remember you get what you pay for.

2. All agents offer the same service.

While most agents offer most of the same services, this is just not true. Remember when I said you get what you pay for?

There are plenty of “discount” brokerages and agents that charge a little bit less for the services that they offer, but in return discount the services that are offered. On the other hand, there are brokerages and agents that charge top dollar and for good reason. Now mind you, this isn’t always the case, so make sure you do your research before committing to one.  A great local agent can save you a ton of time and money simply by knowing the area and market like the back of their hand, having relationships with other local agents, and receiving the inside scoop on properties that haven’t even hit the market yet!

3. You don’t need an agent to buy a For Sale By Owner (FSBO)/ or to list your home.

Your right, you don’t need one! Let me tell you why you should though. Remember when I said that typically the seller pays the commission? That’s right, a good agent is going to be free to the buyer whether it is listed with an agent or not. So, not only are they free, but they are experts in negotiating and have access to a ton more listings that you may end up liking better anyways!

This brings me to FSBOs. Listing your home without an agent may sound like a great way to save money, but it almost never works out that way. How will buyers find your property if you’re not on the MLS? Remember, agents are free to buyers and agents spend most of their time looking on the MLS for properties. Are you an expert negotiator? Do you know the market like a trained professional? Do you have the know how to market your property to pull top dollar? Remember, this is most likely the biggest purchase/sale of your life… So, hire a professional.

4. As a buyer, it is OK to use the same agent that has the property listed.

Once again, your right. Once again, there is a but. Here is how this works – The seller is paying the listing agent and has an agency representation in place, meaning the agent is in the corner of the seller. Now when the buyer wants to use the same agent for that property, an agency representation is put in place for them as well. Here is where the issue comes in, the agent now must remain neutral in the deal since he/she has a representation agreement with both parties. That being said, the agent is and always will be slightly biased to the seller. So, do your research and find a great agent to represent you and keep your best interest in mind… not the sellers.

5. Once you start with an agent, you are stuck with them.

Generally, once you sign a representation agreement with an agent, you will stay with them until the deal is done. But do you have to?

What if they are major slackers, don’t know the market, don’t communicate, or just don’t jive the greatest with you? Then toss them to the curb and find a one that does! Never settle for mediocre in this game, remember, this is possibly the biggest purchase/sale you will ever make.

What if we flip the table here and your agent was absolutely stunning in every way? Well, this sounds like one to refer to everyone you know and keep their info in your back pocket for your next real estate purchase/sale!