When buyers & sellers enter the market, they often have misconceptions about working with Real Estate Agents. These misconceptions often involve how the process works, what the Agent’s responsibilities are, and how the commission structures work. In most Real Estate transactions, there are usually two agents: one that represents the buyer and one that represents the seller.
Here are the Top 5 Myths of Working with an Agent & the truth behind each.
1. Agents always get a 6% Commission
A majority of people believe that their agent is receiving the entire 6% commission for every sale. Commissions are calculated by taking the agreed-upon percentage of the final offer price of the home (i.e. $100,000 home X 6% = $6,000 commission). It’s important to note that the seller will be the one to pay the commission & that it is split into four different ways. This split includes both the seller & the buyer agents as well as their respective brokerages. Although the standard total commission is 6% (then split), the brokerage commissions aren’t always set in stone & the seller can sometimes negotiate the rate.
Pro Tip: Since we are currently in a seller’s market, a buyer’s offer may not be considered as the best offer if they are asking for reduced brokerage commissions because over-asking offers are common at this time.
2. Buyers & Sellers are locked in with their Agent
The contract you sign with your Agent will vary depending on if you are a buyer or seller. For sellers, you will typically sign a contract that includes a 6 month to a 1-year term. Although most contracts for sellers will run the full term (unless sold before!), you may be able to ask the agent or broker to release you from the contract early if things aren’t working out. On the other hand, buyers are rarely under contract & their agent works for free until they find their home. This process can be as quick as a month, take a year or more, or maybe the buyer doesn’t purchase a home at all.
Pro Tip: Taking the time to research & get to know your agent prior to signing anything can set the stage for the right agent to go above and beyond for your home buying or selling needs.
3. It’s OK for Buyers to use the Selling Agent for the Home
The whole purpose of having an Agent is to have an advocate for your best interests. Whether you are a first-time homebuyer, new to the area, or simply don’t know where to look for a buyer’s agent, you should lean towards having your own agent that works for your best interests. A listing agent is legally obligated to have the seller’s interests in mind, especially when it comes to receiving the highest price & best terms possible. There are numerous benefits of having an experienced buyer’s agent that has become familiar with your market & all the quirks that come with the territory.
Pro Tip: From knowing the best inspectors/lenders/attorneys/architects to being able to spot all the pros/cons of a home, a buyer’s agent will help you determine which homes are the best opportunities for you & which to avoid.
4. All Agents are Created Equal
Although all Real Estate Agents are required to follow laws & regulations, not all Agents are created equal. The best Agents will save you time & money & help to protect you from any issues. Experienced Agents will have deep connections with other Realtors, know the best parts of each neighborhood, & may even have the inside track on past transactions & upcoming deals. Although some Agents may be looking for simply making the sale, most experienced Agents will be invested in creating a long-term relationship with you as most of their business is based on referrals.
Pro Tip: A Real Estate Purchase Agreement is 10 pages, 290 lines of information...every line can be used against you (as a buyer or a seller) so working with an agent can greatly reduce the risk of issues & lawsuits.
5. For Sale by Owner Homes can’t be purchased using Agents
As the Real Estate market evolved & became more complicated, the number of For Sale by Owner Homes has decreased over time. However, FSBO homes aren’t a thing of the past completely. Some sellers believe they can save money on commission by listing themselves even though data shows they are likely to receive higher offers with a listing agent. A common practice for these sellers is to offer a payment to the Buyer Agent for the work they provide in bringing a buyer.
Pro Tip: Don’t hesitate to ask your Buyer’s Agent to tour a For Sale By Owner Home as they are there to protect your best interests & you may be able to purchase at a lower price.
Why have a trusted Agent?
A Real Estate Agent is legally required to have your best interests in mind, from choosing the best property for your needs to negotiating the price. Agents who deviate from their obligations are at risk of losing their licenses. While any profession can have its “bad apples”, the majority of Real Estate Agents genuinely want to help you navigate the always-changing market & significantly reduce the risks involved in buying or selling your property. We recommend doing some investigating before choosing an Agent, from asking your family & friends to researching the Agent’s history (online reviews, Real Estate Associations, etc). Ask them to meet for coffee or a Zoom call to get to know your potential Agent!
Real Estate Agent Myth Sources:
Zillow.com: 5 Myths About Real Estate Agents
Have a question about your home buying or selling options or the Real Estate market in general? You can schedule a Zoom Meeting with Grimm Realty Group to discuss your housing needs, lifestyles, & future goals!
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Grimm Realty Group Legal Disclaimer
The content on this page provides general consumer information. It is not legal advice or regulatory guidance. Grimm Realty Group may update this information periodically.
Grimm Realty Group may include links or references to third-party resources or content. We do not endorse the third-party or guarantee the accuracy of this third-party information. All statistics & information are subject to change with market conditions.
Grimm Realty Group is a MN-licensed real estate Broker and does not represent you as your agent unless a representation agreement is mutually signed.