Top Myths About Real Estate Agents
What's True and What's Not
Just when you think you've found out everything you need to know about the "dirty, little secrets agents don't want you to know" from bazillions of misinformed and, in all fairness, probably well-meaning Web sites, here's what you really need to know:
Forget the hype. Forget the books you need to buy, the online services you need to subscribe to and start looking at what's really going on. Here's the straight story:
1) Real Estate Agents are Always Late for Appointments
False. There is no excuse for habitual tardiness among professionals. None. I don't care if it's your doctor, your cable TV installer or your Realtor.
Every person deserves respect, and respect is earned by providing what is promised and being on time. If your agent has a god-like, self-deluded impression of her or his own importance, find another. The agents I know are on time. Clients who listen to agents' excuses allow tardiness to happen. The agents I know are always prompt. Don't let a few bad apples give the entire industry a perception it doesn't deserve.
2) The More You Pay for a House, The More an Agent Makes
False. Ever hear a friend say this: "Every dime more you pay for that house makes the agent more money, so don't trust that agent." That's a misunderstanding. The difference between $300,000 and $310,000 is about $150 to an agent.
Do you really think the agent pays any attention to the commission difference of a $10,000 spread?
3) The Less Commission You Pay to Sell, The More you Make
False. Discount brokers like to propel this myth. They claim to save sellers money by charging less. The truth is agents who are top producers and excel in this business do not discount services.
Why? Because they don't have to.
Less-than-full-service agents can't afford all the bells & whistles paid for by full-service agents, who tend to draw higher offers. It boils down to you get what you pay for. A 2% commission reduction doesn't amount to much when your price is discounted 10% or more because your agent couldn't afford full market exposure.
4) Agents Must Show You Homes On Demand
False. Unless you have a signed contract with an agent or that agent represents the seller, that agent you call doesn't have to show you anything. You can't call a local real estate office and demand service or demand to be shown homes because agents don't work for free.
If you aren't planning on writing an offer with the agent you call, be upfront or don't waste that agent's time. But don't expect that agent -- who is likely to earn nothing -- to be too excited about jumping in the car with you. That agent is not obligated to show you anything.
Nor is the listing agent obligated to show you a listing if you are represented by another Realtor without a request from that Realtor.
5) Agents Get Kickbacks from Lenders / Title / Inspectors
False. Since 1974, agents have been prevented from receiving any kind of kickback or favor from real estate vendors.
It's against the law. It's against RESPA: the Real Estate Settlement Procedures Act. Some agents are slower than others to realize how the law affects them, but most have heard of RESPA and would not jeopardize their license, regardless of the temptation.
6) An Agent's Home Inspector Will Always Favor the Agent
Any agent worth her salt wants disclosure. Why? Because she wants what is best for her client but also, and this is not to be taken lightly, because she does not want to be sued.
Agents must disclose material facts. A buyer is always, without fail, better off knowing the truth about a house. Good agents care that a buyer receives full disclosure and are willing to fight for repairs on the buyer's behalf or help the buyer cancel the transaction.
7) All Real Estate Agents Make Too Much Money
False. 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 less than four deals a year. Nobody can live on that. Not once office fees are paid, MLS fees and lockbox fees are deducted, overhead and expenses for the agent are deducted, errors & omissions insurance and office supplies are paid.
8) Agents Sell Their Own Homes for More Money Than Yours
False. Busy agents and top producers don't have the luxury of time to waste when selling their own home. They also understand the market better than your average home seller, which means if a home isn't selling within a reasonable period of time, it means it is priced too high.
I have witnessed first-hand what happens when agents put their residences on the market. If they need to sell, they might even cut the buyer a better deal than the buyer can get on the open market. After all, the person most likely to be persuaded by a sales pitch is a person who sells for a living.
9) Agents Should Tell You About Crime, Schools & Ethnic Make-up of Neighborhoods
False. 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.
Those who tell you otherwise are misinformed.
10) Agents Will Say Anything to Make the Sale
False. Although it is true that some agents will lie to you, it's unfair to paint all agents with such a broad brush. 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.
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.
At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.