If you’ve ever bought or sold a home and turned to the Internet for guidance, you know there is a ton of information swirling around out there. But how much of it is really good advice? Some buyers and sellers have misconceptions about real estate agents, how the process works, how agents work, and what a real estate agency is all about. Here is some info about myths and truths of both buyers and seller’s agents…
MYTH: Agents Get a 6% Commission
Most people think agents get the full 6% commission when they sell a home. Agents would love that, but it is just not true.
Fact: It boils down to a percentage, and realtors only get paid if the sale goes through. One fact to know is that the seller pays the commission. The commission is split four ways, the buyer’s agent and the seller’s agent and the two brokerages (real estate firms) of the two agents. So, basically each party would get 1.5% commission on a 6% commission sale.
MYTH: You Cannot Change Real Estate Agents After Signing a Listing Agreement
Buying or selling a home can be a complex process, which is why you need an experienced agent in your corner. In the beginning of the process as a seller you will sign a listing agreement with an agent, this typically lasts for six months to a year. Once you sign the contract you could be bound to the agreement.
Fact: Although the listing agreement is a legally binding document, your realtor may be able to work with you to cancel the contract if things are not working out. Buyers are never under contract. The agent will not get paid unless the buyer finds a home to purchase. If you are not satisfied with your agent, let them know early on.
MYTH: It’s Not Beneficial To Have an Agent in the New Digital World
It is fine for a real estate agent to work with both a buyer and a seller. Real estate law in every state says that a real estate agent must treat all parties fairly. Today’s buyer is used to doing most everything online from ordering clothing and food to looking for a home to purchase. Some do not think it is necessary to have an agent.
Fact: The listing agent represents the seller’s interest and has a fiduciary duty to get the best price and terms for the seller. So, working directly with the selling agent will favor the seller. As a buyer, you are better off to have your own agent. A buyer’s agent will know the local market and be connected to the community; they will know the best inspector, lenders, architects, and attorneys.
MYTH: All Agents Are Created Equal
The world of residential real estate has many different players.
Fact: The more experience they have, the better they are at negotiating prices. A great local agent can make an incredible difference. The right agent can save you time and money. Consider an agent who has worked in the area you are interested in for at least several years.
MYTH: FSBO (For Sale By Owner) Are Off Limits to a Buyer’s Agent
If you see a FSBO home, your agent cannot show you that home.
Fact: Many FSBO will offer payment to a buyer’s agent as an incentive to bring their buyer clients to the home. When or if you see a FSBO home you are interested in, ask your agent to step in.
If you’re planning to buy or sell a home, then you should be prepared to receive loads of advice from family, friends, and neighbors. When it comes to real estate transactions, everyone has their own unique perspective. Buying or selling a home is one of the biggest financial decisions you’ll make in your life, which makes misinformation or bad advice all the more dangerous. So, we hope this info about myths will help you decide upon an agent.
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About The Real Estate Company
Residential and Multi-family Realty Services for Lexington, Richmond, and Surrounding Areas. We close over 40 million in sales each year. Our love for Central Kentucky and our clients is the key to our success. We provide careful guidance, persistence, and savvy marketing to deliver results for our clients time after time.
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