8 real estate myths that need to be busted for good
By Cara Ameer (Beaches Office). Originally posted on Inman.com.
People don’t know what they don’t know, and what they do know is enough to create false perceptions of a profession that is often surrounded by damaging assumptions. Here are eight real estate myths — busted!
1. An agent’s job ends once a property is under contract
If only that was the case. This is where the real fun begins. Crafting and negotiating an offer is just the first step. There are house inspections, managing the results and any subsequent repair requests, concessions and negotiations. Scheduling and gathering estimates from contractors, as well as the actual repairs, can be quite time consuming for all involved.
Then there is dealing with the appraiser. You must ensure that they have access to the property, provide important information to them about the home to ensure that no detail is overlooked. You must provide them with the survey, floor plan (if applicable) and comparables the agent feels should be considered. Of course, the appraiser is likely going to do what they want, but an agent must put forth the effort to ensure that the appraiser is educated about the property and neighborhood — particularly if it is someone that the agent is not familiar with.
Staying in touch with the lender handling the loan is paramount to the entire transaction as well and monitoring the progress of the buyer’s loan. You have to stay on top of the whole process, from ensuring your client has made a timely loan application and are submitting all required documents and so forth.
As the closing date approaches, the agent may spend a considerable amount of time coordinating logistics for all involved with respect to access, utilities, providing vendor lists, termite bond and pest control information as well as other helpful information for the new buyer.
All of the above activities require a lot of back-and-forth communication via phone, text message and email. Nothing is just a five minute thing, but rather multiple items that turn into a lot of time spent communicating and relaying information.
2. A real estate agent should be available at all times
Most every business has an established set of hours in which they do business. Consumers think that real estate agent’s hours are typically any time and all the time. However, agents happen to be people with families, children and lives to attend to, so there may be times where they cannot drop everything to show you a property right then and right now.
They may also have commitments to other customers such as property showings, listing appointments, writing and negotiating offers, meeting builders with customers, attending inspections, walk-throughs and closings. This is why they may not be immediately available to call, text or email you back. They may be driving, and voice-to-text messages often comes get garbled. There is often a lack of forgiveness among those unfamiliar with the industry about agents who cannot stop, drop and show a home.
Let’s see, your accountant works by appointment, as does any attorney. Have an urgent legal matter? There’s a good chance the attorney you want to speak to is in court and will have to get back to you in a few days. If you have an urgent medical issue, you go to urgent care or an emergency room. It’s easy for people to get really agitated. Agents prefer to work by appointment, too.
While they may not need that much lead time to schedule a time to service the customer, having a bit of notice so they can appropriately coordinate is appreciated.
3. Calling an agent numerous times will induce them to answer the phone
Speaking of being instantly available, many hold the notion that calling an agent multiple times without leaving a message will increase their chances of having the agent answering the phone immediately.
Not so fast. Calling an agent repeatedly, unless it is an emergency regarding someone’s health or that of a family member, friend, accident, or a property has been broken into, going up in flames or has a water leak, is not appropriate.
In fact, it borders on harassment and may actually make the agent reluctant to engage further with the prospect. If the agent is not picking up the phone on the first try, there is a good chance that they aren’t doing so because they are doing something else at the moment. They could be, heaven forbid, taking a moment for themselves, like going to a dentist appointment, or otherwise doing any number of other things that they’re usually engaged in on behalf of clients.
For the best chance of a response, simply leave a message or send them a text.
4. Selling my home to an iBuyer will result in a similar price as an open market transaction
Not so much. While it sounds easy to sell your house with the click of a mouse, there is so much more to it than that.
The price an iBuyer is willing to pay is a bargain to them. In most cases not a true reflection of market value. With property values pushing higher throughout the country and available inventory at an all time low, everyone is looking for an off-market deal. iBuyers are a modern day real estate investor looking for an advantageous situation. Unfortunately, what an unsuspecting seller may not know can hurt them. While selling your home “as is” may be appealing, they will discount the purchase price to reflect that fact, even if potential issues are not that costly to fix.
An iBuyer may go through the home with a fine tooth comb with a host of specialty contractors that find much more than a home inspector would notate with a regular buyer as justification for paying a lower price. There are often a slew of closing fees that an unsuspecting seller does not understand and may not think to question because they are selling their home instantly.
When it comes time for closing, it may be handled by a mobile notary that is not well versed in a real estate transaction like a local title agent or attorney is. Do you really want to risk your single largest transaction for the sake of convenience? You don’t know what you don’t know, and it can hurt you.
Leverage and exposure are two elements that always help bring the highest and best price that a property should sell for.
5. Buying new construction without an agent representation saves money
This myth is a huge misnomer. Most builders account for the commission as part of their marketing budget. They recognize that working with a real estate agent can be a significant source of business and serious buyers that result in a sale, as opposed to tire kickers that wander in to look at models and design ideas.
It is important for the consumer to remember that the builder represents themselves and only that. They are in the business of selling homes and while they may be concerned with delivering a quality product, the term “quality” can be quite subjective and mean different things to different people. Think of having agent representation as your own personal watchdog to ensure that expectations are being managed.
Consumers’ agents will be the one to suggest bringing in their trusted inspector to thoroughly check out the property at each phase of construction, and help keep the entire process in check from contract to closing. Ridiculous closing fees? A good agent well versed in new construction will be there to call that out. Costs for upgrades that may not make sense? A trusted agent will help the buyer separate the wheat from the chaff and determine what choices offer the most return on investment versus others that should be avoided, or better done after closing with more reasonably priced vendors.
Why trust the single largest investment you are making to someone that does not represent you?
6. I will get a better deal by going through the listing agent
Speaking of representation, many buyers think that if they don’t use an agent to assist them, they will get a better deal on a home they are interested in by just working with the listing agent.
Depending on the state where the property is located, state licensing laws may not allow an agent to represent a buyer and seller at the same time or only with consent. In other states, the guidelines are less strict and an agent can facilitate a sale with a buyer and seller. However, keep in mind that working through a listing agent can create a precarious professional position as the agent works to get a seller the best terms and price trying to balance that against what is important to a buyer. There is often a disconnect between the two and trying to achieve a fair solution can be difficult with one agent involved. Inevitably, either one or both parties may feel as if they got the short end of the stick which is not the best way to conclude a transaction.
Keep in mind that an agent handling both sides of a transaction is doing twice the work and may not feel inclined to give a discount “just because”. In other words, there is more to simply electing to go through listing agents only so a buyer can get a supposed “deal”.
Like everything in real estate, it is usually much more complicated than that.
7. I don’t need to stick with the agent I’m working with – it doesn’t matter who I buy the house from
In theory, yes you can buy a property from whatever agent you want. If you started with one agent and they were not a fit for you, you can shift gears to another agent. Some buyers will have an agent that responds to an internet inquiry on a home show them just that property or maybe one or two more, but then will turn to another agent to further assist them for whatever reason. Others will try one agent and if they aren’t available, will call another one.
Each time you engage with an agent, they are typically offer to set you up with information on new listings and the latest market information. However, the more consumers change agents, it will cause a lot of confusion and consternation. The real estate community is pretty insular and it will quickly become known in the community that you were the same buyer that has looked at the property five times with three different agents.
It may raise some eyebrows as to your seriousness and what kind of buyer you will be to deal with. Word gets out pretty fast and consumers may end up on the “most unwanted list” that top agents will not want to deal with.
8. Agents are hungry for business, so of course they will work with me, no matter what I want to buy or sell
Well … maybe. While most agents are motivated by opportunity, they also recognize that time is money. One of the most precious commodities that an agent is giving is of their time, and that is often more valuable than money.
Agents want to focus their time on activities that will lead to productivity. So while consumers may think every agent is waiting to drop everything to run out and show them a property no matter where or what it is, think again. It can be costly for an agent to work on something that is a road to nowhere.
The unrealistic property search looking for the impossible, exhausting every possible option with resales, including bringing in contractors and interior designers for remodeling ideas, checking into every new construction opportunity only for nothing to be suitable results in a lot of lost time.
Marketing the heck out of an overpriced listing and leaving no stone unturned, only to result in it not selling, or sellers rejecting reasonable offers leaves an agent with a lot of bills for photos, video, staging, print advertising and digital ad campaigns. So no, not every agent wants to continually handle these situations. These are often encounters taken on by unsuspecting real estate rookies who are ripe with hope and green for opportunity.
Almost every agent needs a few of these situations under their belt to know better the next time. Because the most they may get after putting forth a tremendous amount of effort is a “thank you” and that is a huge “maybe,” if that.
Wise agents learn to assess the opportunity cost of every lead to determine what is and isn’t viable. Trying to be everything to everyone only results in burnout.