Fact or Fiction: The Top Five Misconceptions About Real Estate
Most people purchase or sell a home at least once in their lives—meaning there are many misconceptions about the home buying and selling process. Misconceptions about real estate are very common, but we’ve taken the time to debunk them below.
#1 Getting Pre-Approved is Done After Finding Your Dream House
Waiting to get pre-approved until after you find “the one” is a huge mistake. If you’re buying a house, you should be pre-approved before you even begin looking. You can stave off any disappointment by making sure you’re qualified to purchase a house, before falling in love with one. It can be really devastating to complete the arduous steps of finding a house and writing an offer, only to find out you’ve been declined for a mortgage. Additionally, as a pre-approved buyer, you have a significant advantage over other buyers, if you are competing against them for the same home.
#2 All Real Estate Agents Make Boatloads of Money
Of course, successful real estate agents can make a generous income. This reflects the amount of time, energy and money they spend to achieve that success. However, a common misconception exists, that all agents earn 6% of the sale price of a home, no matter what. This is false.
Many factors affect an agent’s commission, from negotiations to expenses. For example, the commission of a sale is divided between both the selling and listing brokers, who take a cut of the commission before distributing money to the agents involved in the transaction. Additionally, agents are responsible for their health insurance, car care, and advertising expenses, all of which add up.
#3 Real Estate Agents Will Say and Do Anything to Make a Sale
Because many people believe that real estate agents make a ton of money, they think that money is the only thing they care about. However, agents are held to a very strict moral code, as well as many rules and regulations. Most agents work on a referral basis, word of mouth advertising and repeat customers. An agent who would blatantly lie to a client just to make a sale would not be in business for long. When buying a home, select a reputable agent with multiple years in business. Also ensure that you are comfortable with them and trust them, as buying a home is one of the biggest purchases you will ever make in your lifetime.
#4 Selling a Home For Sale By Owner (FSBO) Saves A Lot of Money
Many people believe that selling their own home, without the help of an agent, will save them tons of money down the road in commission fees. Agents understand the market, and therefore know when and where to list a home and for how much. Many FSBO sellers lose money when their homes sit on the market for months on end, when the transaction was mishandled and the buyer is declined after four months under contract, when they didn’t know the best way to negotiate price and terms for their home. Real estate agents exist because the home buying/selling process isn’t easy. The best way to be sure you’re covered is to use a reputable and trusted agent.
#5 Agents Can Only Show Their Own Company’s Listings
Many people believe that agents can only show their own company’s listings. However, real estate agents that belong to their local real estate board and MLS have access to any listing that is multiple listed. This means they can show you any of these properties. This is why it is important to not rule out an agent, just because their company isn’t listing a house you like.
If you’re interested in purchasing a home in the greater Houston area, the certified real estate agents at Precision Realty and Management can help. Contact us at precisionrealty.com/contact-us or call (281) 866-7400.