Whether you are buying or selling a home, it’s important to understand the role of your real estate agent. Often times, what we think we know about agents and what we believe to understand about the role they play is often misconstrued. Here we cover some of the most common myths about real estate agents and their role in assisting their clients, whether they are the buyers or the sellers.
- Buyers should be able to use the same agent as the seller. While this might sound like a convenient solution to your “find an agent” dilemma, buyers should use their own agent. An agent that is hired to represent the seller in a transaction has the seller’s best interest in mind, just as an agent the is hired to represent the buyer should have the buyer’s best interest in mind. The agent, regardless of if they are working for the buyer or seller, has a responsibility to their own client to negotiate the best pricing and terms of the transaction. That being said, the agent should be trying to negotiate top dollar for his seller, while the buyer’s agent should be trying to negotiate and get the best reasonable price for the buyer.
- Once you contract with an agent, you are obligated to stay with that agent. Before we jump into this one, it is important to note that you should always interview multiple agents before signing a contract, and a typical contract is for six months to one year. The agent you hire is someone you need to feel comfortable with and work closely with. They need to understand your expectations and hopes for selling your home, and you need to understand that you are hiring this agent to offer you the best realistic advice that they can and you need to be willing to work with the agent and listen to suggestions and concerns. The agent is an advocate for you. If you follow the advice of interviewing multiple agents and still end up being unhappy with the agent you contract with, it is often possible for you to ask the agent to release you from the contract.
- Agents will tell you what you want to hear to get the commission. Although each and every profession has its share of bad apples, most agents are not going to lie to you or give false hope. Most agents are either trying to build a solid reputation for themselves or have spent time and money building a solid reputation and will not jeopardize their standing in the field or community by breaking a client’s trust by not offering the best professional service they can.
- Agents receive a commission on top of a salary. Though any agent you speak to will likely tell you they wish this were true, it simply is not the case. Conversely, agents work strictly on commission earned, and not even expenses, such as marketing and fuel, are covered by the company they work for.
- Speaking of commission, many believe that agents walk away with a standard 6% commission. This is incorrect on two levels. First off, there is no such thing as a standard commission amount. The commission is often negotiable depending on many factors; therefore it is important to discuss commission amount in detail when interviewing agents. Also, your agent does not walk away with the whole amount made on the sale. Generally speaking, the commission that the seller pays is typically split between the two brokerages and the two agents (seller’s and buyer’s).
- Agents get kickbacks from lenders and inspectors they refer to. Not only is this untrue, it’s completely illegal for agents to receive any type of kickback from any vendor they might refer you to. If an agent is making a referral, it is because they have a good working relationship with them, they believe their work is trustworthy or have had good luck with them in the past. No reputable agent would be willing to jeopardize their reputation or their license by bending this rule. It is also important to note that you are under no obligation to use the vendors your agent recommends to you.
While it is safe to say there are likely other myths and misconceptions about real estate agents, just as with any other profession, by taking the time to ask questions and by doing your research, you will find the truth in how agents work and what you can actually expect when contracting with an agent.