3 Homebuying Myths

I’m here to save you pain, buyers. There are myths about the home shopping experience that must be addressed. I like to make the home buying experience as stress-free as possible, so please hear me out on these three big myths about home buying:

Myth #1: “That house has been on the market so long I bet we can work the seller down easily.”

Not necessarily. Exceptionally high days on market could mean almost anything. The seller could be bullheaded about their price. The seller may not be particularly motivated to sell for emotional or other personal reasons. Don’t forget: A sales-weary seller isn’t likely to respond to your host of rational reasons why their house should be a bargain.

Myth #2: “I want to look at foreclosed homes because they’re a real bargain and the banks need to unload them.”

Banks, like entrenched sellers, don’t always make decisions which seem rational based on obvious information. You can have a hard time divining the reason a bank chooses to reject an offer for a foreclosed or distressed property, and their decision may be based on financials which seem counterintuitive. The truth is, many distressed sales can be longer and more fraught than regular sales.

Myth #3: “I liked this house a lot, but with this market, I bet it will still be there if I decide to buy it.”

It’s very, very painful to see a client love a home but fail to make a move to purchase that home. If you fell in love with it, why wouldn’t someone else? Just because a property has been on the market a little while doesn’t mean it will stay on the market. The bonus myth in this one? Your “perfect” home is probably going to be a home with some small compromises. If you don’t make an offer on a home, you’re effectively saying, “I’m comfortable losing this home.”

My job as an agent is to represent your interests and do my best to protect you along the way. If you’re pursuing a home purchase in the near future, please get in touch. There are many other ways I can lower your stress and help you find a great home!

Contact me to discuss your options:
Laura@LauraKey.net

Can A Real Estate Agent Pay You A Commission?

You’ve done a real estate agent a solid. You hooked him/her up with a client.

That agent is going to make a nice chunk of change. You also saved him/her the time, effort, and money of finding a client.

So, you might think that it’d be nice if that agent gave you a little hunk of that chunk.

It’s not an uncommon thought or request. Agents are asked to do this quite a bit.

And each and every time, they say no. It might come across as being greedy, or unappreciative, but it isn’t.

Unfortunately, real estate agents can’t give you any money for finding them a client; they’d lose their license for doing so.

Even if they really wanted to give you some money, and feel you deserve to get a piece of the pie, their hands are tied.

See, as agents we are bound by laws, rules, and regulations.

Appreciation and compensation have to come in other forms…

That doesn’t mean they can’t or won’t do something for you.

Maybe it simply boils down to referring business to you.

Or, perhaps remembering you when they hear about an awesome job opening you would be perfect for.

They might even give you some sort of a gift. (Although, even the monetary amount of a gift can be subject to limits by law.)

Perhaps they’ll take it into consideration when you buy or sell a home through them, and give you a better commission rate.

But here’s something to keep in mind…

Part of the reason so many people feel entitled to ask for money for referring a real estate client is because it appears (to the outsider) that real estate agents make a lot of money on a deal you may send them.

How much they make isn’t as much as it may seem.

While many people see the commissions agents make on a deal as “large”, they usually aren’t in actuality. Sure, sometimes, they can be quite large if it’s a really high end home, but that isn’t the norm.

The overall commission might seem high, but that money gets split up quite a few ways before the agent is left with their “split”.

There are tons of costs to being a real agent you don’t see, know, or think about. Too many to list.

And of course agents have to pay taxes on the money they receive.

Beyond that, most agents don’t do as many deals per year as you may think. Often, agents are closing fewer deals than the public perceives they are. It’s rare for an agent to close a deal or more per week.

“Many deals” is more like one or two per month, and that’s only for some agents. Many agents only do somewhere around 5-6 deals per year. And a heck of a lot of agents don’t even do a deal or two per year.

There’s a lot of competition—a lot of agents—for only so much business to be done.

So, why should you bother with referring someone to a particular agent?

What exactly do you get out of it?!

It really boils down to supporting a real estate agent you trust in. Someone you want to see succeed. Not for your personal gain, but because you know the agent will do the best job possible for the person you are referring.

Most likely, it’s going to be more appreciated than the agent can ever express, or repay to you. But there’s also a good chance that the agent will do something to repay you in whatever way he/she can.

Just don’t get upset, or hold it against an agent, for not agreeing to give you a referral or finder’s fee. It’s entirely beyond his/her control.

10 Things Everyone Assumes About Real Estate Agents That Aren’t True

Let’s face it, everyone either knows a real estate agent, or is connected to one through six (probably less) degrees of separation. Between friends and relatives, and the stereotypical representation of real estate agents on television and in pop culture, the general public has a adopted some assumptions about agents that are very far from the truth.

Here are ten things that people assume about real estate agents that just aren’t true:

1. They make “easy money”

HAHAHAHAHAHAHAHAHAH. The only people who could ever possibly make the case that being an agent is an easy way to make money are those who have never done it. It’s hard, uncertain work, with many instances of months wasted on a deal that doesn’t ever close. The only thing easy about it is reading the Lighter Side of Real Estate.

2. They are required to show you houses even if you’re not pre-approved

There are definitely agents who will show you houses without a pre-approval (or at minimum a pre-qualification), but an agent is not required to, and most experienced agents probably won’t. The ability to qualify for financing dictates whether or not a deal is even possible, so an agent is simply saving you from disappointment (or worse) by asking you to get pre-approved.

3. Zillow is more accurate than they are

It would be wonderful if Zillow (and similar websites) were accurate in their home valuations, but if you compared their results to actual appraised values, in most cases you’d burst out laughing. Real estate agents want you to get as much money as possible for your house, but oftentimes reality gets in the way. Trust your realtor to give you a fair market assessment for your house…at least more than you trust Zillow.

4. They make huge commissions

The popular real estate flipping shows on cable, and Million Dollar Listing have given everyone the impression that real estate agents are rolling in the dough. Most real estate agents wish that this was true, but reality is much different. The median US existing home sale price in December 2016 was $234,900, which means after splitting the commission and paying their broker, an agent took home about $3500 on the transaction, not including all marketing and related expenses. As a monthly income, this adds up to about $40,000 per year. Not exactly huge.

5. They’re an unnecessary evil

Many people have made the argument that real estate agents are unnecessary and are merely an impediment to a more efficient “For sale by owner” model of real estate. The best way to eliminate this misconception is to try selling your house yourself. There is nothing more sobering than desperately Googling state and federal real estate laws as some unkempt stranger is knocking on your door asking you questions about your FSBO house.

6. They’re sleazy

Unfortunately, real estate agents have joined the ranks of lawyers, politicians, and salespeople in some of the public’s assumptions about their trustworthiness. The financial collapse of 2008 exacerbated this perception. Thankfully, the market correction also weeded out most of the unsavory elements in the business. The truth is, real estate agents are honest, hardworking people, making a living like any other profession. And just like any other profession, there are a few bad apples that unfairly give the others a bad name.

7. They’re uneducated

This misconception really gets under most agents’ skin, because not only do many agents have degrees (and advanced degrees in quite a few cases), but the knowledge required to pass a real estate exam is substantial. There are many people who are unable to get their licensing because of an inability to pass the licensing tests, which makes the concept of an “uneducated” agent laughable.

8. They want you to pay more for a house so they can make more money

If you truly looked at the math involved in calculating real estate commissions, you’d never utter this falsehood again. An agent getting you to pay $10,000 more for a property will net that agent approximately $150, which barely covers the cost of gas required to drive to and from your appointments. The truth is that an agent absolutely wants you to buy a house. What’s not true is that they want you to pay more for one.

9. They’re mostly part-timers or bored housewives

If you ask the average person to describe the archetypal real estate agent, they’ll probably say it’s an older married woman who is looking for something to do in her free time. Ugh. This is stereotyping at its finest, and ignores the hundreds of thousands of male agents, the hundreds of thousands of full-time agents, and the hard-working primary bread winners that make up the real estate workforce. Sure, the stereotypical agents do exist, but they’re the exception to the rule.

10. All they want from you is the deal

Yes, agents want your business. But true professional real estate agents want to be your lifelong real estate advisor. They want you to think of them whenever you or your family and friends have any real estate questions. They want to see you and talk to you more than once a decade, and they want to make sure that you remember your interactions with them as being absolutely delightful.