Ten Myths About Real Estate and Agents

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Services for Real Estate Pros
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Real Estate Myths and Misconceptions

Myths and Legends about real estate

According to most consumer surveys, real estate agents fall somewhere on the professional scale between personal injury lawyers and used car salesmen. Now I have known and worked with about 25 or more of them from all parts of the country. There are some bad apples amongst them, but there are also some of the nicest people you'd ever want to meet that are Realtors.

The good real estate agents are serious professionals who take pride in the industry and are sincerely dedicated to helping their clients achieve the dream of home ownership. In addition to being licensed by the state, agents take continuing education classes and acquire designations that help them serve their clients and become better agents. The good ones love their job, and are always people who love people.

Here are some of the myths associated with buying and selling real estate, and about Realtors:

1. When buying, working directly with the listing agent will help you get a lower price for the house-

Some buyers think a seller can save money on real estate commissions if there is no buyer’s agent involved with the transaction. In reality, sellers have usually negotiated to pay a total amount of commission, regardless of whether one or two agents are part of the process. If you don’t have a buyer’s agent representing you, it just means more commission for the listing agent. There can be exceptions, but in most cases, there’s nothing to be gained and a lot to be lost by not availing yourself of the expertise offered by a buyer’s agent.

2. All Real Estate Agents Make Too Much Money-

An agent's average annual salary is less than $36,000 a year. You will find that about half the agents in any large brokerage close fewer than four deals a year. Of those deals their commission is often shared with the broker and other agents involved in the transaction. Agents also pay office fees, MLS fees, lockbox fees, overhead and expenses. They also pay for their own health insurance. And small town agents often have a tough job.

3. Working with a lot of real estate agents will improve your chances of finding the right house-

Some buyers call half a dozen real estate agents, thinking that the more agents they have, the better their chances will be in finding the right house at the right price. Firstly, real estate agents work from the same multiple listing service, there is no “secret” list or inside track. You may get redundant information. Second, developing a close relationship with just one agent will allow that agent to more fully understand your real estate needs and wants. Finally, letting an agent waste hours of his time and gas showing you places, just for you to turn around and buy from another agent is just plain RUDE. 

4. The higher you price your house, the more money you're likely to get for it-

Pricing a house for sale is one of the most important parts of a real estate sale. Some sellers think they’re building in extra negotiating room by overpricing their home, but this generally results in a negative impression from buyers. That impression will ultimately depress the perceived value of your property. Correcting the error of being overpriced can result in a lower sales price than would have been achieved if the house was reasonably priced from the start.

5. With all the information available on the Internet, consumers don't need a real estate agent-

There are many internet sites that can help you locate possible homes to buy. When it comes to negotiating a purchase or making sure a transaction actually gets to settlement, a laptop will never replace a real live agent. Agents are familiar with all the forms and deadlines associated with a home purchase or sale, and can spot errors or omissions you may not catch. You should never sign a contract for this kind of money without a professional looking over your shoulder.

6. In today’s market, it’s always a good idea to first low-ball sellers-

Since we’ve been in a buyer’s market for some time now, many buyers think “What the heck, let’s throw a lowball offer in there and see if we get lucky.” If it’s a house you’re willing to walk away from, that may be fine. But, if it’s a house you really want, low-balling the seller might poison your ability to ultimately do a deal. When the initial offer is unreasonably low, sellers frequently get their back up, and they can become significantly less willing when it comes to further price negotiations.

7. Sellers should never take the first offer-

Every once and a while, we put a house on the market and it gets an offer right off the bat. Even if that offer is a good one, sellers frequently start second-guessing themselves and are reluctant to take a contract that comes in quickly. We can’t tell you how many times we’ve seen a seller turn down that offer, only to find (six months later) that it was the one they should have taken. A fast offer for top-dollar doesn’t automatically mean you underpriced your home. You may have just been lucky to get someone who wanted a place exactly like yours, who was out there shopping right when you put it on the market.

8. Agents Should Tell You About Crime, Schools & Ethnic Make-up of Neighborhoods-

Federal Fair Housing laws prevent a real estate agent from discriminating against a number of protected classes, which automatically prohibits an agent from disclosing anything remotely relating to the protected classes. Therefore, it may come as a shock to many people 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.

9. Real estate agents try to drive up home prices so they will get paid more-

People know agents get paid as a percentage of a property’s selling price. So it’s not unreasonable to assume that agents would have a vested interest in higher prices. But that’s not really true. If someone pays an extra $5,000 for a house, the additional commission for the agent will be less than $100. The market itself, the seller's motivation, and comparable sales dictate prices; not agents.

10. Agents will say anything to make the sale-

Making misrepresentations or a false statement is against the law. Agents who break fiduciary relationships or fail to disclose material facts are subject to prosecution and a loss of their license to sell real estate. Top producing agents - those who enjoy a solid reputation in the community and practice real estate honestly and truthfully - are very careful to uphold a client's trust.

These are just a few of the misconceptions people have about real estate and Realtors...there are many more. But I can attest as one who knows more of them than most people; in general, agents are genuinely nice people who like to do their best to help others find the perfect home.

Thanks to Greg Harrelson for the input on this article. 

 

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Gary L. Waters Broker Associate, Bucci Realty 03/26/2014 11:28 PM
  2. Will Nesbitt 03/27/2014 12:51 AM
  3. Chandler Real Estate Liz Harris, MBA 03/28/2014 02:37 PM
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Rainer
307,291
Clay R. Seay
Florida Homes Realty & Mortgage - Saint Augustine, FL

Jan, thanks for sharing the myths and the truth. I wish all consumers knew more of the truths and less of the myths about our business.

Mar 26, 2014 10:45 PM #1
Rainmaker
1,976,933
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

The reputation we want the public to hold in their hearts and heads starts with how we describe ourselves. If you are an agent that points out the flaws of another to make yourself look better, that is not going to advance your career or the industry perception. Just do a better job marketing with more time and money saving delivery of the FAQ, property listings, area information. And don't slander, slur another wearing the blue and gold R.

Mar 26, 2014 11:21 PM #2
Rainmaker
1,534,077
Gary L. Waters Broker Associate, Bucci Realty
Bucci Realty, Inc. - Melbourne, FL
Fifteen Years Experience in Brevard County

Great list here for all consumers.  The myths are greater than the realities!

Mar 26, 2014 11:23 PM #3
Rainer
196,465
Karen Mathers - REALTOR®
Keller Williams Vero Beach - Vero Beach, FL
When it Matters, Choose Mathers! 772-532-3221

There is a stigma out there!  If people truly understand what is done on their behalf and the knowledge and experience an agent brings them.  

Mar 27, 2014 01:23 AM #4
Rainer
483,118
Chandler Real Estate Liz Harris, MBA
Liz Harris Realty - Chandler, AZ
#ChandlerRealEstateAgent

Another wonderful top 10 List.  Especially liked #9 because that truly is a myth. 

Mar 27, 2014 02:00 AM #5
Rainmaker
401,573
John Wiley
Fort Myers, FL
Lee County, FL, ECO Broker, GRI, SRES,GREEN,PSA

Jan, you have given the consumer a great list of myths and explained why they are a myth. This is valuable information for Buyers.

Make it a great day.

Mar 27, 2014 02:29 AM #6
Rainmaker
21,138
Cindy Graesser
Keller Williams - Temecula, CA
CG Premier Realty Group. "We'll Get you Moving!"

Great article - blowing wide open all the 'myths' -  it always does amaze me at how people want to handle the most valuable asset they own!

Mar 27, 2014 03:14 AM #7
Rainer
6,626
Gail Jones St Augustine, Florida
St Augustine Realty - Saint Augustine, FL

Great post.  I hope the public begins to understand that these are myths. 

Mar 27, 2014 04:02 AM #8
Rainer
233,926
IRMA Beltran
Century 21 M & M and Associates-Turlock homes Real Estate - Turlock, CA
Your Real Estate Agent 4 Life Always there 4 You!

Great information for everyone to use to educate clients.

Have a blessed day.

Mar 27, 2014 06:06 AM #9
Rainmaker
209,231
Jan Chilton
Myrtle Beach, SC
Real Estate Marketing

Thank you all for the comments! This all started when I read a comment about Realtors being bad people on one of our local news sites and started defending them. Greg took off with the myth stuff, and made it into a pretty good article, I thought! I've had first hand dealings with a trial attorney (website) and I was married to a car salesman. You all aren't even in the same stratosphere...LOL.  I'm glad I found my niche with you.  :-)

Mar 27, 2014 06:12 AM #10
Rainmaker
1,408,972
Jeff Jensen
The Federal Savings Bank/Lending in 50 states - Greenwich, CT

The mortgage business has a similar list of misconceptions

Mar 27, 2014 08:15 AM #11
Rainmaker
19,598
Brian Habel
HomeSmart Advantage - Saint George, UT

Gosh, great list!  I can relate to all of what was said as a Realtor- this is a goodly list of common myths.  It never ceases to amaze me that they do a lot of times think about number 9, that we somehow want them to pay more on a house givng us more commission.  I used to think that some agents are like that as to why they might have thought I might be like that, but now I just wonder if it just comes from the people themselves.  They have no idea about the professional reputation we try to uphold.  Also, they have no idea about the trainings and like 'to be fair to all parties', to include representing our clients best interests, not our own... and to not just be out for me or even just them, but really do have an ethical code we try to abide by.

Mar 27, 2014 10:47 AM #12
Rainmaker
209,231
Jan Chilton
Myrtle Beach, SC
Real Estate Marketing

One thing about it, Brian...nobody who ever met you has that opinion. Thanks for the comment, and you, too, Jeff.  :-)

Mar 27, 2014 12:42 PM #13
Rainer
51,094
The Tonnesen Team
Berkshire Hathaway Home Services Nevada Properties - Las Vegas, NV
Put a #1 Team to Work For You!
A truly excellent article, Jan! Good agents truly want their clients to get the best deal possible. Not only does it give them a sense of pride and well being to know they did a great job, they also know those clients will be delighted to recommend them to more clients AND be repeat clients themselves one day. We become very attached to our clients personally as well as professionally. I have tons of momentos from previous clients scattered around my office and they make me smile every day. :)
Mar 27, 2014 01:01 PM #14
Rainmaker
209,231
Jan Chilton
Myrtle Beach, SC
Real Estate Marketing

Thanks Diann.  I know how attached I get to most of my customers, so I can believe it. :-)

Mar 27, 2014 01:14 PM #16
Rainmaker
760,447
Pete Xavier
Investments to Luxury - Pacific Palisades, CA
Outstanding Agent Referrals-Nationwide

Thanks for puttining this mythbusting blog out there.

Some understand the realities, some will, others NEVER!

Mar 27, 2014 01:34 PM #17
Rainer
44,718
Fran and Rowena, La Canada Realtors - (818) 952-0077
Dilbeck Real Estate - La Canada, CA

Great article Jan!  Great information, well written.
This should be required reading for buyers and sellers.

Thanks so much!

Mar 27, 2014 01:45 PM #18
Rainmaker
209,231
Jan Chilton
Myrtle Beach, SC
Real Estate Marketing

Thank you Fran...and you too, Pete. 

Mar 27, 2014 03:57 PM #19
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Rainmaker
209,231

Jan Chilton

Real Estate Marketing
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