As in any industry, there are plenty of myths out there about real estate agents – what they do, why they do it, and when their interests align with yours. A lot of people seem to think of real estate agents as a necessary evil they need to be wary of – but in fact, your real estate agent is on your side.
These three myths seem to persist from Florida real estate agents to California based deals, so let’s put them to rest once and for all.
Myth 1: You don’t really need a real estate agent to sell your home
One of the first things you will hear when you get ready to sell a home is that For Sale By Owner (FSBO) will save you thousands of dollars – because you won’t have to pay a real estate agent to help you. The commission on a sale is usually around 3% - which would be $7,500 on a $250,000 home. The idea of being able to pocket that money yourself is attractive, but when it comes right down to it you probably won’t see a dime for a variety of reasons:
- You’ll lose time (and therefore money) handling all of the things a real estate agent usually does for you – advertising and listing the home, meeting with potential buyers, struggling to get through reams of paperwork
- You’ll lose actual money because FSBO homes often end up taking longer to sell, and sell for less than asking price – if you are still paying a mortgage on the property, you could lose thousands waiting for it to sell, and a drop of $20,000 off of the asking price can make the agent commission seem like a steal.
Myth 2: Your buyer’s agent won’t fight for the best price
If you are a buyer, you may think that since they work on commission of the sale price they aren’t invested in getting you the best deal. Honestly, though, there are two reasons you shouldn’t worry about this:
- The difference in commission really isn’t big enough for the agent to factor it in on how hard they work for you. If the price drops by $10,000, their commission only drops by $300 – not really enough to provide a disincentive for them to try to close the deal – which means getting the best price for you they can.
- You can offer your agent a bonus if they manage to get the seller to drop the price below a certain point, meaning they don’t lose anything by getting you a better deal!
Myth 3: Real estate agents are shifty, and unwilling to answer questions
Too many buyers feel like the real estate agent is “withholding information” from them and don’t understand that there are very real laws dictating what kind of conversations your agent can have with you and which ones they cannot, especially on FHA homes.
- For example, of course you want to live in a low crime neighborhood with good schools. However, if you ask your agent questions about statistics in the neighborhood, they actually can’t tell you – because those statistics could include information which could cause discrimination against protected classes. They can only tell you where to look for the information and you have to go find it yourself.
- Your agent also wants you to have the best, most accurate information about the property, so they are unlikely to withhold information about inspections and so on- they could be held liable if it were found that they failed to disclose pertinent information.
Don’t let myths about real estate agents drive your decision on whether or not to use one to buy or sell your home. Know the facts, and make the right decision. For more advice from the pro's, check out The Official Real Estate Agent Directory Blog today!