The more real estate prospects go online to search and determine their own destinies within the housing industry, the more those prospects are becoming real estate experts. Here are some real estate myths your clients may or may not believe.
1. Real estate agents get paid a salary. Wrong. Most agents work totally on their own dime. Their time and expenses are theirs alone. Some low fee brokerages such as Redfin pay their agents salaries but those salaries are contingency-based.
2. Real estate agents keep all of the sales commissions. Wrong. Commissions are legally paid to the agent’s brokerage firm. The brokerage then pays the agent. Unless the agent represents both the buyer and the seller, the brokerage firms earn the listing or the selling side commission. Any commission “split” paid by the brokerage to the agent is usually based upon the company’s business model and/or the agent’s transaction production level.
3. All commissions are 6%. Wrong. All commissions are negotiable and different markets pay commissions differently based upon such things as property type, property price, etc.
4. Real estate agents are reimbursed for all their transportation and travel costs such as gas, mileage, hotels, meals, flights, etc. Wrong. Most agents work on their own dime.
5. Real estate agents are not responsible to pay for any and all marketing expenses. Wrong. Agents have to pay for all design/printing/distribution of brochures and fliers, broker open house events, specialty websites, digital marketing campaigns, 3-D tours, video productions, extras such as flowers, musicians, beverages, etc.
6. A home either passes or fails an inspection. Wrong. A home inspection essentially assesses the condition of each component of the home (plumbing, roof, HVAC, etc.) and estimates the life remaining on those system components
7. Home inspectors have to find something wrong with the house…they are just out to get you. Wrong. Even newly constructed, never before lived in houses have things that don’t work properly. If home inspections aren’t done carefully, lawsuits could follow.
8. Weekends bring out the most serious prospects. Wrong. Most serious prospects view properties mid-week.
9. If Zillow says it, it’s true. Wrong. Zillow’s CEO, Spencer Rascoff, sold his house for 40% of Zillow’s Zestiment.
10. It’s best to price the house on the high side. Wrong. If prospects and/or agents think the price is too high, they won’t bother to look at the house.
11. It’s best to make a low offer and then negotiate from there. Wrong. A low-ball offer can easily alienate the seller. If and when that happens, there won’t be any negotiating at all.
12. Multiple offers give the seller an advantage. Wrong. Every buyer, no matter how many there are, has a limit. There is always another house.
13. Multiple price reductions mean the seller is desperate. Wrong. Often, multiple reductions mean the seller is finished negotiating for any price.
14. All real estate agents are the same. Wrong. Some agents are more committed to excellent service, more knowledgeable, better problem solvers, better negotiators, etc.