Everyone has to live somewhere so it’s no surprise Real Estate and the topic of Homes is so popular. However, there are so many myths about the industry and what a REALTOR® really does so I wanted to dispute some of the most common misnomers.
1 – We just drive people around all day looking at homes.
Well, maybe this is true for some, but never has been for me. While there are some “Buyers Agents” that are only allowed to work with buyers when on a team, most Realtors work with both buyers and sellers. Of course sellers are not being shown a ton of homes and even on the buy side, if the agent is doing their job well, a ton of homes won’t need to be viewed in order to find the right one. Much of my day is in the office… working on marketing, learning & researching, prospecting, negotiations, client follow-up, planning, accounting, etc.
2 – It works just like HGTV.
This is going to be a three-part answer…
- First of all, not all homes look like the fresh remodels from Property Brothers. Not every home is in perfect condition and most are not staged to the 9’s either. That’s okay though. This is real life and that’s why inspections are important along with proper expectations.
- Rarely do buyers see just three homes and pick one of them to be their own. On average, we will see 8-10 homes to find the right one. Also, in a competitive market, you could get beat out a time or two before getting a seller’s acceptance.
- Most buyers do not have $150,000 lying around for renovations… on TV we often see where someone will buy a home for say $450,000 and then put $150,000 into a remodel. Well, unless you have the cash on hand to make those repairs, it’s not so simple to finance the total amount to conduct the renovations. This sort of scenario would take creativity and options for financing are limited for renovation programs.
3 – All you need to do is pass the Real Estate Exam to become successful.
Why do you think the attrition rate is so high. Less than 20% of new licensees ever renew their license after the first 2-years in the business. Real Estate is tough. What you learn in school (90 hours) is almost entirely to pass the test. You do not learn about how to run a business, accounting, how to advertise, branding, marketing, negotiations, inspections, appraisal process and so many other aspects of our profession. Arizona has more agents per capita than anywhere else… everyone knows a Realtor, but there are differences – see #6 below.
4 – Agents keep all the commission.
Haha – this one makes me laugh… every agent will be setup differently. Whether they belong to a small boutique brokerage or are just a number among thousands of agents within a large one, there are costs to belong. Monthly & annual fees, transaction & processing fees, E&O Insurance cost, brokerage splits, etc. If an agent is on a team, they have not only the brokerage expense, but the team takes something as well. These arrangements will vary significantly, but majority of agents pay many THOUSANDS of dollars in fees from their commissions. Some are even on 50/50 splits, which means that commission is cut in half right from the start. That’s before hiring professional photographers, videographers, online marketing, recurring dues for MLS access, association membership, lockboxes, signs and the list goes on. Can this be a lucrative business? Absolutely. However, it’s not as sweet as the consumer may feel sometimes.
5 – Always price your home high because all buyers will offer less.
Market conditions differ and evolve over time and therefore the answer to this one can shift some. However, I have always been a big believer in pricing a home where it should be and holding firm. We market the heck out of it to gain maximum exposure and justify that value with our presentation. Remember, a home needs to appraise, unless being purchased with all cash. If someone prices a home high, a couple of things could happen. Either they’ll be letdown once it fails to appraise and the whole transaction blows up, which causes a bunch of other issues, or it will sit on the market and buyers won’t look because it appears overpriced. The longer a home sits on the market, it can develop a negative stigma, which leads to less activity and that’s not good for the wallet. Finally, in competitive markets, buyers will NOT always offer less. If they’re serious and value is justified, you’ll get what you want. That’s partially up to the agent to market appropriately and negotiate on your behalf.
6 – All agents are the same.
Laughing again… this couldn’t be further from the truth. First of all, there are roughly 125,000 transactions that take place each year here in Arizona. That means about 250,000 total sides/opportunities for Realtors. There are 60,000+ Active Licensees in the state currently so if you do the math, that breaks down to about 4 transactions per agent per year. Someone like myself, who represents 80 Buyers/Sellers per year takes market share away from many others. Some “dabble” in the business and work full-time elsewhere, which means less availability and market knowledge. Some have 30-years of experience, but aren’t super active while a 10-year vet could have sold thousands of properties. Budgets & philosophies for marketing will fluctuate as well. For me, this is a CAREER and has been since 2003. This is all I do and I work a lot. I am hands on in the transaction too so when you work with me, you’re working with me. Yes, I have a team of people to help in the journey, but I am pulling the strings and the main communicator. Not everyone runs their business that way. In fact, many let their business run them. Ultimately, the consumer has a lot of choices. We always encourage them to do their homework and choose to work with whom they believe will represent their best interests properly and get the job done.