Top 7 Real Estate Myths Debunked

There are a lot of common misconceptions surrounding real estate agents and real estate in general. Let us set the record straight by debunking these 7 common real estate myths: 

Myth #1 — Agents get incentives to recommend lenders/title companies/inspectors.

This is definitely untrue—against the law, actually—thanks to the 1974 instatement of RESPA: the Real Estate Settlement Procedures Act. This law prevents any type of kickbacks or favors to real estate agents from vendors which means that any recommendation from an agent is typically based on his/her experience with that particular individual. By recommending them, the agent is only trying to make sure you have an efficient process. 

Myth #2 — Real estate agents try to upsell you to make a higher commission. 

This couldn’t be further from the truth. During the initial process with an agent, the buyer will be asked about their budget and what exactly they’re looking for in a home. The agent will choose homes for them based on this information. Sometimes if the buyer is looking for things in a home that aren’t available in their price bracket, the agent may suggest going up in price. But it’s not for the money—it’s to get them what they want. The difference between of $5,000 in price of a home is only about $150 to an agent. Not much in the grand scheme of things, right? 

Myth #3 — If I am interested in a home, I should call the agent the home is listed with for the best deal. 

There is nothing wrong with calling the listing agent for information on the home. They will be able to give you all of the information you need to make sure you want to move forward and schedule a showing. But it isn’t necessarily recommended that you use the same agent. Why? The listing agent will have the best interest of the seller in mind, first and foremost. If you tell them the highest you’re willing to pay for the home, they’re going to share that information with the seller. You can work with them, but it may be best that you find an agent who just has your best interests in mind and not those of the seller as well. 

Myth #4 —No one buys in winter. I should wait until spring to list my home. 

Actually, buyers are looking for homes year-round and many get a start on looking at homes as early as January. The market is more saturated with newly listed homes in the spring, so putting your home on the market at the first of the year increases the likelihood that it will be seen by potential buyers. Ultimately, don’t fret about when you put your home on the market. A home that is priced and staged well will sell, no matter what time of year. 

Myth #5 — All real estate agents make too much or are in it for the money.

Did you know that an agent's average annual salary is less than $36,000 a year? Many agents in a brokerage only sell a handful of homes each year. Those who make more than that are putting substantial time into gaining trust from clients to earn their future business and recommendation to their family/friends. And getting that trust isn’t something that comes from being in it for the money—it’s about building relationships. 

Myth #6 — I should price my home higher to leave room for negotiation.

So many people have this thought, but the reality is that if the home is overpriced, it may never make it to the negotiation stage. A Redfin study showed that the first week that a listing goes on the market, it receives nearly four times more visits online than it does a month later. If the home is priced well to begin with, you are much more likely to sell your home quickly. Ask your Realtor for a comparative market analysis, which helps determine a reasonable price based on sales of similar homes in your area, and go with the Realtor’s recommended price for your home. A good  agent will know the market and know the top dollar you can get for your home—just trust their judgement. 

Myth #7 — Agents should comment on crime rates, schools, etc. in an area a buyer asks about. 

False. An agent cannot disclose crime rates, school stats or ethnic mixes of neighborhoods due to Federal Fair Housing laws. These laws prevent a real estate agent from discriminating against a number of protected classes, which automatically prohibits an agent from disclosing anything remotely relating to the protected classes. An agent can tell you where to look for more information, but they cannot comment or make recommendations in that regard.