Buying a Home: Top 4 Real Estate Agent Myths Debunked | Money Hints

You’re ready to buy a home, but you don’t know what you should be doing as far as talking to or working with an agent. You know you need someone, but you’ve heard so many negative things about agents. Don’t believe everything you hear. Fortunately, most of the bad news out there is just a myth. Here are the most insidious ones that refuse to die.

Real Estate Agents Don’t Know How To Tell Time

Some agents aren’t great with keeping time, but most agents are actually very punctual. They have to be. Real estate agents live in an industry that’s fiercely competitive. If they’re chronically late to appointments, they’ll lose clients. Eventually, they won’t have any clients.

You Must Sign A Lengthy Buyer Agency Agreement

Some agents do try to get you to sign a buyer agency agreement. These agreements are set up so that you must work with the agent through the home-buying process. It’s a way to protect the agent from “tire kickers” or people who use one agent to look for homes and another to actually make purchases. When you sign an agreement, you must use that agent to buy your home and the agent will receive the commissions on the sale.

But, when you’re first starting out, you might not be sure about which agent you really want to work with. So, ask your agent about a short-term buyer agency agreement that lasts only for a few days or a week. This will give you an idea of how the agent works. It will also give you an idea of the ethics of the agent

Most agents won’t mind you wanting to shop around to find the best agent for your needs. If your agent resists this idea, it’s time to move on.

The Lower the Commission, The More You Make On The Sale Of Your Home

Discount brokers perpetuate this myth. But, the reality is that the best agents in the industry don’t discount their services because they don’t have to. Think about it for a moment. If you find a real estate agent that’s charging you a lower commission, promising to make the sale quick and painless, he might just sell it for a lower price than the full-service agent.

A 2 percent commission reduction doesn’t really amount to much when your price is discounted 10 percent because your discount agent couldn’t afford full market exposure or just doesn’t have the skill set or ability to sell the house for more money.

Agents Get Kickbacks From Lenders and Mortgage Brokers

This hasn’t been true since 1974. The Real Estate Settlement Procedures Act prohibits this kind of activity. If you suspect this is happening with the lender, the real estate agent is breaking the law and could lose his license. Similar prohibitions apply to the broker as well, so you shouldn’t run into this very often in the modern age.

Real Estate Agents Will Do Anything For The Commissions

This is something that critics of the real estate industry often use to make buyers afraid of using an agent. But, most real estate agents only make $36,000 a year or less. Most agents in any large brokerage close less than four deals in any given year. Out of that, they must pay MLS fees, lockbox fees, overhead, and errors and omissions insurance.

Sure, there are successful agents out there, and they make a lot of money, but this is usually because they’re good agents, not because they’re ripping people off. You have to remember that most agents get business from referrals, and they work locally. If they were doing a disservice to their clients, it wouldn’t be long before the entire community found out – they’d be out of business.

Annette Goree is passionate about real estate. From her years of buying and selling, she enjoys blogging about market trends and tips to successful experiences.

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