While most people aren’t well-versed in real estate, there may be some inaccurate information spread by those who aren’t familiar with the business. Someone who bought a property 15 years ago may believe the process is still the same and pass on misleading information to others who think it is correct.
It can be a surprise when someone begins the home-buying process and discovers that the process is not what they expected. Here are some popular real estate fallacies that have been debunked! You might come across some of these real estate myths, so it’s wise to be aware of what’s out there.
Myth #1
Every Agent Makes a Lot of Money.
False. Real estate brokers only receive a tiny commission from selling a home. The seller pays the realtor costs for both the seller and the buyer, typically around 6% of the sale price. After the brokers deduct their fees, the two agents share the commission. A house that sells for $300,000 results in a 6 percent commission split of $18,000, leaving each agency with $9,000. Most agents pay for promotions and marketing out of their wallets, so once those expenses are deducted, along with taxes and other costs such as gas, car maintenance, health insurance, and so on, the amount they bring in is much lower.
Myth #2
Agents Can Always Show You Any House You Want.
False. For an agent to show you homes, you must be under contract with them as a buyer. Also, a listing agent for a seller is not required to show a buyer a listing if another agent represents them unless the other agent requests that the listing agent show the home. If a prospect isn’t planning on writing an offer and just wants to look at houses for pleasure, you don’t have to waste your time and efforts on something that won’t result in a sale. You might respectfully inform the customers that when they are ready to buy a home, you would be delighted to work with them and show them houses that fulfill their requirements and are within their budget.
Myth #3
Most Agents Will Say Anything to Make a Sale.
Any agent worth their reputation will be truthful with a customer. As an agent, you must follow a reliable code of ethics as well as numerous rules and regulations. Many people believe this myth since agents aren’t paid until a home sells, so they feel the agent will say anything to execute the sale so they can get paid faster. You want to do the most satisfactory thing for your client, but you also don’t want to get sued or lose your license.
Before writing an offer, agents must disclose significant facts and a good agent wants their client to have sufficient information to make an informed decision.
While some agents will stretch the truth to make something appear better than it is, it is unreasonable to put them all together. A respected realtor is genuinely concerned that their client gets a home that fulfills their wants because a satisfied client means recommendations, which is how agents continue to grow their business.
Myth #4
Pre-Approval Happens After Finding a Suitable Home.
Negative! Before going property hunting, a buyer should be pre-approved, so they realize how much they can genuinely afford. Many buyers assume that being pre-approved occurs just after choosing the perfect house. A buyer may find the perfect home, make an offer on it, and then be declined by the mortgage lender and lose out on the deal. A buyer who has been pre-approved has an edge in a bidding war since they have proof that they can genuinely afford the home.
Myth #5
List the House High.
Don’t do it. This will not work if the purpose is to make as much money as possible. Interested buyers consider pricing, bedrooms, baths, and square footage, and if a home meets the requirements but is out of their budget range, they will search elsewhere. Buyers compare comparable properties in terms of amenities and price, and if a house is far beyond market value, it will not receive offers. By pricing too high, the seller may end up losing money. If someone expresses an interest, they’ll have to haggle the price down regardless of whether the appraisal finds that the prices are high for what the appraisal shows.
Buyers become wary of homes that have been on sale for more than a couple of weeks because they begin to question what’s wrong with them that no one has made an offer. The seller will want to price the property competitively for the current market and not so high that people ignore the listing. A qualified agent will be able to assist clients in pricing it effectively while also getting the most bang for their dollars.
Hopefully, this knowledge will assist you in dispelling any real estate fallacies that your clients may present to you. It is critical to approach the purchase or sale of a home with as much precise information as possible to avoid costly mistakes.
