Can you believe that agents keep all of the commission? If you do, that is a serious rumor about the real estate industry, and don’t believe it. Every industry has its rumors, and real estate is no exception. A lot of the rumors center around agents and valuing homes. We just want to share some of the rumors you might have heard, and what the real truth is about these rumors.
1.) Agents Keep Total Commission
First of all, commission is paid to the agent’s employing brokerage, who then pays that money over to the agent. The brokerage will earn the commission taken from either the buyer or seller, and then take out their share from the commission. The spilt depends on three things: the company, their business model, and the productivity of the agent. There are also additional fees, and agents have to withhold some of that money for taxes and social security. They make a living like everyone else; the paycheck just might not be as frequent.
2.) Agents are Reimbursed for Travel
In the perfect world, a brokerage would have a fund set up for reimbursing agents for driving around for multiple days between houses, but that is not the case. All the open houses, all the days spent driving with clients to houses, all the prepping for showings, all of this travel is paid for with the agent’s own money.
3.) Weekends bring Serious Buyers
As a matter of fact, the most serious buyers come out during the week. Open houses on weekends tend to bring out the curious neighbors looking for design ideas. In the real world, waiting until the weekend for an open house might be too late.
4.) Zillow knows the Exact Value of your Home
No offense, but Zillow does not walk through every house on the block to figure out their value. The “Zestimate” given on the website is merely a starting point, a general idea that is by no means the exact value of your home. Fun fact: CEO of Zillow, Spencer Zascoff, sold his home for 40% less than what was said on Zillow!
5.) Multiple Price Reductions = Desperate Seller
Price reductions on a home are meant to bring the price to a more comparable and current rate. The price drop is meant to make the house more competitive on the market. Price reductions also indicate that a seller is basically done with negotiating on the home anymore.
For more real estate myths, check out some of these websites below: