Real Estate Fact? Or Fiction?
January 22, 2020
Let’s face it. Just having been through the process of buying or selling a house makes everyone an expert. You’ve done it, and now you know how real estate works, right? Let’s consider some of the most popular myths about the real estate industry.
Realtors get paid to show me as many houses as I want to see. False. Realtors get paid $0 for showing houses. In fact, Realtors must pay all their expenses on their own, and they literally do not make a dime until they sell and close on the house. To put that into perspective, let’s say you work at a toaster factory. You work 50 hours a week making toasters. In a normal week, you make, advertise, insure, answer hundreds of phone calls, respond to countless emails, make sure the toasters meet local, state, and federal guidelines, and show your toasters to multiple interested buyers, as well as retail stores who might want you to represent their toasters, but you do not get paid until you sell a toaster. Even then, not until the buyer has had time to make sure they really want it and have inspected it fully and gotten their financing complete to purchase the toaster 30-45 days later. All the while, you paid every expense yourself up-front before you ever sold one toaster.
Those commissions must be huge, and the agent gets all of it. False. The principal broker actually gets the commission from the sale, and your realtor gets a percentage of that commission. Out of that commission, the realtor must pay for their errors and omissions insurance, subscribe to the MLS, pay for their lock boxes and the electronic monitoring of them, continuing education requirements, and most expensive—advertising, etc. After all that is paid for, then the Realtor gets paid.
Marketing expenses…Who pays for those? Must be “the company.” Nope. The Realtor pays for them. Video, drones, professional photos, specialty websites, broker opens, open houses, brochures, and even more if it’s a high-end listing, are all paid for by the agent. What happens if the seller changes their mind and no longer wants to sell or won’t agree to a reasonable offer? Oh well. The agent just lost all of the money and time they spent on advertising the property
The Zestimate. If I had a dollar for every time I’ve heard “the Zestimate says,” I’d be rich. People. When did Zillow last visit your house? Does Zillow have an office or someone working in your area that’s familiar with the local real estate market? The answer to all of these is NO. If that doesn’t open your eyes, then let’s really put that in perspective. The same person coming up with those Zestimates from an office chair in Denver, Colorado is Zestimating Los Angeles, California and Knoxville, TN. Are these two markets the same? No. How would they know that if they aren’t familiar with either of them?
Here’s another good one. It’s best to price your house on the high side because a buyer can always make an offer if they’re interested. FALSE. Pricing your house high can deter potential buyers. When buyers search for homes, they search in a price range. If your house is reasonably priced at $249,000, but you want to list high at $259,000 because you’ll “probably have to come down,” you might lose buyers searching for homes that are $200,000-$250,000. It’s much better to price your house reasonably, thus more buyers will consider it and potentially a multiple offer situation could ensue.
The best advice to remember is not every real estate scenario is the same. It’s most important to be genuine and down to Earth in every transaction. Listen to your realtor. They’re your local expert.
Gail Hardy is an affiliate broker with Southland Realtors. Reviews on Gail can be found on Zillow and her business page on Facebook. She always welcomes new clients and can be reached at 865-805-3054 or email Gail@southlandrealtors.com!