Myths of Real Estate
It’s crazy how many rumors there are about the real estate industry, which you, as a home buyer, should definitely not believe. But every industry has its rumors, so it’s not a surprise that the real estate industry is no different. A lot of the rumors within the real estate industry revolve around agents and the value of homes. We wanted to share some of those crazy rumors you may have heard in the past and inform you about the real truth.
1.) Agents Keep Total Commission
Let’s clear this whole process up. First, commission is paid to the agent’s employing brokerage, who then pays the agent. The brokerage will earn the commission taken from either the buyer or seller, depending on which side that agent was working. Finally, the agent will get their commission from the sale. But this sum of money still depends on other thing, such as the company, their business model, and the productivity of the agent. There are also typically additional fees that again, reduce the agent’s commission. They also have to withhold some of that money for taxes and social security. Their paycheck may not be a consistent as yours, but they’re not just gaining a crazy amount of commission from selling one home.
2.) Agents are Reimbursed for Everything
If the agents had it their way, there would be a fund set up for reimbursing agents for driving around between houses four countless days, but that is not the case. All of the open houses held, the days spent driving around with their clients to look at houses, all the prep work for house showings, and more is all paid for with the agent’s own money. There’s no magic account that reimburses real estate agents for the costs or time used before a client purchases a home.
3.) The Weekend Brings in More Serious Buyers
This is also very false. In fact, the most serious buyers typically look at houses during the week. Open houses that are held on weekends often times tend to bring out the curious neighbors or individuals looking for design ideas or their current real estate competition. In reality, waiting until the weekend to hold your open house may be too late and may backfire on you.
4.) Zillow Knows the EXACT Value of a Home
Now if you believe this one, we have some major conversations that need to take place. Zillow is a great website to quickly look at homes on the market and possibly some pictures, but the operators of Zillow do not walk through every house on the site in order to figure out its value. The “Zestimate” given on the website is simply a starting point or an estimate, which by no means is the exact value of your home. Here’s an interesting fact! The CEO of Zillow, Spencer Zascoff, sold his home for 40% less than what was listed on Zillow!
5.) Price Reductions = Desperate Seller
Price reductions on a home do not mean that the seller is becoming desperate to sell their home. Although this may be true for some seller, price reductions are mainly meant to bring the price to a more comparable and accurate rate. The price reduction is also meant to make the house be more competitive on the market, in comparison to other listings. Price reductions also indicate that a seller is pretty much done negotiating on the price of the home, since they’re already asking for less money.
For more real estate myths, check out some of these websites below: