Every profession has its fair share of myths and tall tales; Real estate is no exception. In every market from New York City to Houston Real Estate, you’ll find buyers and sellers alike with misconceptions about their agents. We’re here to clear some of that confusion up. Let’s review these common myths about real estate agents.
Being A Real Estate Agent Is A Full-Time Job
For some this is true, but only about half of all real estate agents in the U.S. are full-time. There are plenty of licensed part-time agents out there who only work twenty hours a week or less. Though these agents can be just as competent as their full-time counterparts, it’s always worth vetting your agents to make sure, whether part-time or full, that they’ll be giving you their best.
Agents Get Paid A Salary
Real estate is almost purely a commission based industry as far as the agents are concerned. For successful agents in hot markets, this commission is a blessing and better than any salary they could want. For agents in slower markets, they’ll need to stretch their commission for a long while. In addition to not getting paid on a salaried basis, agents must give part of their commission to their broker (otherwise the broker wouldn’t be a brokerage for very long) and pay a variety of monthly fees to their brokerage if they are part of one.
All Agents Make Big Paychecks
Some real estate agents make a hefty commission, but most don’t. But don’t let that fool you into thinking being a real estate agent isn’t a well paying job. According to NAR, real estate agents nationwide have a median income of $49K, which compared to the U.S. median personal income of $35K is quite impressive indeed. The longer you stay a real estate agent, typically the more favorable your commissions will be, with more experienced agents making around $75K. It all depends on the local market and the agent-broker relationship.
It’s too bad they don’t make reality T.V. about every-day real estate agents, otherwise, the public would know that agents aren’t all that flashy, and the rumor about them making a ton of cash is just another myth about real estate agents. You can make a good living being a real estate agent, just don’t expect millions.
Agents Take Home Their Full Commission
Agents take home about a quarter of the full commission that the home seller pays. Typically that commission is 6%, but the commission is always negotiable. That commission is then split between both the buyer’s agent and the seller’s agent, who then gives their brokerages a cut. Depending on the brokerage, that can be a 50/50 split between brokerage and agent, but also as high as ⅔.
In eXp realty’s case, the commission is split 80/20 until the agent earns $16K for the brokerage in the calendar year, after which all earnings are kept by the agent. If that sounds good to you, learn more about how to be an agent for eXp Realty.
You Have To Stay With the First Agent You Choose
Most of the time, as a buyer, you’ll never sign a contract with your agent until you’ve settled on a home. Until that happens, you are under no obligation to stick with the first agent you choose. If after a month your agent hasn’t helped you find the right home, or you’re unhappy with the relationship, you can split ways. It’s not always the fault of you or the agent, sometimes you’re just not the right fit.
All Agents Are The Same
Real estate is a very accessible industry, which means you can find people from all over and every walk of life who become real estate agents. Some agents are better at some things than others, and you’ll find that each agent has their special niche of neighborhoods and buyer types that work well for them. For instance, an agent that is great with millennials might not work for empty-nesters. This is why it’s very, very important to interview several agents personally before settling on one.
Real Estate Agents Aren’t Necessary To Buy A Home
While technically it’s true you don’t need an agent to buy or sell a home, you also don’t need a windshield to drive a car, does that mean you should drive without one? So it goes with Agents. Agents will help keep the ‘wind’ out of your face. They’ll steer you clear of common problems that arise in the home buying process. They’ll put you in touch with trustworthy inspectors, appraisers, lawyers, and title companies, all of whom you’ll need to work with at some point in the home selling process. Remember, just because you can buy or sell a home without a realtor doesn’t mean you should.
The Lower The Commission, The More Money You’ll Make As A Seller.
It’s a time-tested fact that the less you pay someone in comparison to the competition, the worse of a job they’ll do for you. Let’s say you negotiated an agent down to 4%; that doesn’t mean the agent’s other clients also negotiated them to 4%. The agent might be making 6% or even 7% commissions. What that means for you, with your 4% commission, is that, unless you’re selling a luxury property, they’re going to focus on the clients paying them better first, and put you on the back burner.
Agents Are Just Trying To Get Their Commission And Get Out
Getting paid is just one of many end-goals that good agents have in mind. A good agent knows that creating a positive, trusting relationship between themselves, their clients, and other agents, is absolutely necessary to having a healthy, prosperous real estate market. Agents thrive on referrals, and if it’s clear they see their clients as an easy stepping stone to a paycheck, they most likely won’t get referred as much as the agent who sees their client as a vital part of their job.
