Common Myths about Real Estate Agents Debunked
People are mentioning many myths, especially about real estate agents. They hear many stories, and they try to conclude out of it without digging deeper. Just because they hear or read something does not necessarily mean they are true. Common myths are circulating, and tackling them would be a great way of showcasing the truth behind them by trying to debunk them.
Myth #1: Real Estate Agents Have Salaries
The general public seems to be confused about how real estate agents make a living. They often believe that they have employers who pay them with a basic salary floating. Nah! Real estate agents host events, open houses, and other marketing activities but their time and expenses are all paid for by them. There is no monthly allowance nor basic salary they receive for the services they offer. Most of their income is from commissions, and they may have extra revenue from other investments. Real estate agents are like small business owners who have to work hard for their business to survive and prosper. They have flexible schedules, but they are at the whims of their client's schedules, which means they are likely to work more than eight hours a day, including weekends sometimes.
Myth #2: Real Estate Agents Make Easy Money
People believe that real estate agents make a ton of money because they are dealing with properties. But many are not aware that they only make a small portion of the amount from the sale. The seller usually pays the agents a certain percentage ranging from 5 to 6 percent of the deal, which is still negotiable. The commission is then split between the buyer's agent and seller's agent once the brokers take out their fees. The higher the amount closed in the deal, the more commission an agent and their realty firm receive. It may sound lavish, but an agent's income is not constant, unlike those who are employed. They have to sell many properties or luxurious homes to make a significant profit. In addition, they have to pay for marketing expenses, gas, insurance, and many more. They have to budget the money they received and stretch it out until the next sale to receive another one. Although they have unlimited income potential, they have to work for it non-stop and have closed deals to earn. It is definitely not "easy money" since they put a lot of time, energy, and effort.
Myth #3: The Real Estate Agent Keeps All the Commission
Real estate agents are not allowed to work independently without a licensed real estate broker. After agents earn their license, they must be under a broker or hired by a brokerage in order to perform real estate work. The brokerage usually provides agents with support and guidance. They can also provide training and resources to help them do their job. Whether the agent represents the buyer's or seller's side, or on rare occasions handling both sides of the transaction, the brokerage takes a share from the sales commission to run the company to support everyone in their team to keep the business afloat. People might be surprised at how much an agent takes home after the split and deductions, not to mention withholding taxes. The sharing is according to the marketing plan, business model, and agent's production level of the company they belong to. They are just like everyone else with their income, but the only difference is their paycheck does not come every two weeks.
Myth #4: All Real Estate Agents are the Same
With tough competition in the market, buyers and sellers are selective with whom they will trust to help them buy or sell a property. Many may believe that all real estate agents are the same because they are the representatives of either party. But in general, agents differ in their approach, ability to negotiate, resources, and skills sets. They have different characters and experiences. Some prefer to work independently, and some prefer to be in a team, whichever they choose; working well with others would have a higher chance of getting the transaction done.
Myth #5: Buyers Get a Better Deal When They Hire the Listing Agent
Buyers may often believe that it is ideal to buy a home through a listing agent because there is only one middleman. Although it is possible, it is unlikely to benefit buyers since listing agents represent the seller's best interest. Like offers below the selling price, negotiations about the prices may not be effective since listing agents do not represent the buyer.
Myth #6: Real Estate Agents Lie To Make a Sale
Reputation is vital for a real estate business to prosper. Although they have to make a sale to earn money, it is not the only thing that matters. It is their source of income, so they have to take good care of their name and follow a strict code of ethics or lose their license. Part of an agent's job is to disclose material facts and relevant information that could affect the buyer's decision-making apart from the price. While other agents bend the truth to convince, it would be unfair to mark all agents as the same (as mentioned in Myth #4). Good real estate agents are honest, and they care sincerely about their clients in helping them find their perfect home. Top agents know that word of mouth is vital, so they can build the real estate business through referrals when a client is satisfied with an agent's service.
Conclusion
Every real estate agent has their strengths and weaknesses. It would be unreasonable to treat them negatively, especially when someone has a bad experience with one. There are still many perks of being an agent, and the opportunities are limitless, not only on income potential but also in self-growth. It is best to understand these things better and correct what the general public thought is true. Like any other profession, real estate agents are committed to excellence, and they devote their time and energy working with buyers, sellers, and colleagues to act as problem solvers. They are resourceful, responsive, and creative professionals who never stop learning, improve their services, and share their knowledge and insights to help clients in their decision-making, such as purchasing a home.
