9 Things Real Estate Agents Don’t Want You to Know
By Alan Moore
In 2019, more than 6 million homes were sold across the United States, as reported by the National Association of Realtors (NAR). Of these, 682,000 were new construction homes, and 5.34 million were existing homes. A large majority of these transactions were completed with the paid assistance of real estate agents.
Most people are not aware that the tasks performed by realtors do not require special skills, certifications, or much effort at all really.
So before you hire a real estate agent to help you in your move, here are nine things you need to know that agents do NOT want you to know.
Don't fall into the trap of thinking you can't sell your home without a realtor.
You can sell your home without a real estate agent
If you can take great pictures and are willing to research pricing your home, you can successfully sell your home without the help of an agent (and without paying the commission).
You will likely need to get your house on the MLS yourself by using a flat-fee service such as FSBO.com or USRealty.com, but if your buyer is working with an agent, you may still have to pay their commission.
Knowing what your house is worth will make your job easier when selling it without an agent. You don’t want to underprice your house, but if you price it too high you will get few (if any) offers. You want to price it perfectly from the start to give yourself the best chance at selling.
But this is not as difficult as it sounds. You can get a list of comparables (comps) through your property tax website or websites like Zillow.com or Redfin.com. Once you know what similar houses in your area sold for, you can determine your price.
You can avoid commission if you bring a buyer
If you have someone interested in buying your home before you sign with a seller’s agent, you want to disclose any potential buyers in writing who have expressed interest in your home. If that interested party goes through with the offer, you will not have to go through the broker, even if you’ve signed with them already.
Many realtors won't make you sign an agreement and it's best to avoid this at all costs. You do not want to be locked into a contract with a bad realtor. This may differ by state and locality depending on local laws and regulations so do your homework!
An agent's commision is almost always negotiable
The seller typically pays both the buyer’s agent and the seller’s agent commission. The standard is 6%, split evenly between agents, but the average commission paid to buying and selling agents has dropped steadily from year to year.
You may be able to just ask for a lower commission fee when you hire a seller’s agent, especially if you plan to buy your new home with the same agent. The higher-priced the home, the easier it is to negotiate the commission fee.
Before signing a contract with a real estate agent, they should discuss their commission with you. This is the time to negotiate it. Let them know if you have a better deal from a different agent available, and they may match it. Agents may also be willing to discount their commission to make a deal happen for the home their client wants. Just remember, if the sale of a home doesn’t go through, you should not have to pay anything in commission.
Having an open house is a bad idea
Many home buyers are not visiting open houses anymore. The majority of them are turning to the internet to find their next home. In the age of Covid, this has never been truer. Most of the time, open houses are now used for real estate agents to gain more clients. This is an opportunity for them to hand out their business card and show people what the real estate agent is capable of, so it is becoming less about the home and more about the agent.
Getting quality photos and videos of your property is more important than ever. If your home doesn't show well online, then potential buyers won't even bother to take it into consideration.
Small agencies are just as good as big agencies
Brand recognition and a higher budget for marketing do not mean that a large real estate agency is better than a small one. They typically do not negotiate on commission as easily, and the agent is probably getting a smaller cut of that commission. Smaller agencies sometimes have better customer service with agents that are more motivated to do their best for you and the sale of your home.
The internet has made it possible for smaller agencies to market your home as easily as larger agencies. Just make sure any agent from a smaller brokerage is qualified and that you feel comfortable with them handling the sale of your home. Don’t be afraid to shop around for the agent that meets your needs the best.
If you decide to hire a realtor, make sure you ask hard questions. Be very clear on the services they will provide. If you feel like this is something you can do yourself, guess what, you most certainly can! You have to weigh whether you're willing to pay high commission rates for their work. Think long and hard!
Your home inspector might not tell you everything
When buying a home, research inspectors independently to find one who is highly rated, who will bring up big problems like termites, mold, or any other serious issue with the home you’ve put in an offer on. Some inspectors think they can’t afford to scare a buyer by bringing up those big issues, and others may simply overlook big issues because they have a deal with some untrustworthy real estate agents. Doing your research will help avoid these issues.
Do not blindly accept the inspector your realtor recommends. Remember, they probably have a financial relationship with the inspector which muddies the water.
Read the fine print in your contract
When signing a contract, make sure to read it thoroughly, and look for disclaimers of promises. Consider hiring a lawyer to look over your agreement to ensure there is protection in the contract for you - as the buyer - and that it does not include a waiver of rights. Buying or selling a home is a large financial investment, so a fee to make sure the contract is fair is worth it.
Getting the best price may not always be the top goal
A real estate agent could work hard to sell your home for top dollar, since the more they sell it for, the larger their commission. However, they may just do what they can to sell quickly so they can move on to the next house. Some agents prefer to handle more houses as opposed to marketing houses to sell for more because of the risk that comes if transactions do not go through.
Some agents may even mislead you by not showing you all of the offers if they can gain financially from one offer and not the other. They run the risk of losing their license for this, but figuring out that an agent has done this can be difficult.
Buyers and sellers can check their real estate agent for misconduct
Real estate agents should always give you their license number. Using this number, you can check to see if the agent you’ve chosen has any reported misconduct.
Most states have an online searchable database where you can easily find information about the realtor if you have their license number. Make sure to choose an agent with no record when researching the best realtor for you.
If you plan to hire an agent, make sure to find the right one. Not all agents are bad, and selling with an agent could mean selling for a better price. Are you willing to put in the time and effort required to price your home, list it, market it, and sell it? If so, you may not need an agent.
If you’re not ready to sell your home as FSBO (For-Sale-By-Owner), make sure to do your research to find a reputable agent who will put your needs first.
Sign Up and Subscribe to get the latest updates, straight to your inbox.
I send periodic emails that include marketing tips, info on how to sell your home, and more! Unsubscribe at any time.