You know these things aren’t true. The problem is that your clients don’t. And unless you know what crazy things your clients believe, you can’t help. We’re here to show you the most common misconceptions about us and our trade.
That way, you can be armed to enlighten your clients, putting their fears at ease and helping to educate them for your sake as well as theirs. After all, a client who understands what you do can appreciate what you do!
We hope we’ll hit all the misconceptions out there, but the truth is that we won’t. Thus, use these misconceptions as a point of departure for an open, honest conversation about what your clients know (and don’t) about the real estate business.
Make sure they know that you’re always available for questions. Then… make sure you either know or are willing to find the answers!
Misconception #1: Agents get paid a salary.
No. We don’t. We know that. But misinformed clients truly believe that we’re rolling in the dough. They often have no idea what a brokerage is, and they don’t realize what kind of cut they get. They also don’t realize that our slice of the commission pie is not necessarily based on the sale price of the home but also factors in our performance, experience, certifications, and the list goes on.
A great way to convince your clients that you aren’t a greedy, slick-haired salesman who will say anything to get to their money is to gently inform them that we don’t ever see “all that money” we charge. Being above board with exactly where your money comes from will encourage trust and mutual respect.
Misconceptions #2: All agents are the same… and they’re all greedy, unnecessary, out for their commission, etc.
Again, no. However, unless you inform them about the differences between licenses, between REALTORs and real estate agents, between listing agents and buying agents, between an experienced and non-experienced agent, and about the differences in niche agents, then how on earth will they know? Also, be sure to mention that we are not all about their money.
Another way to do this beside explaining exactly where our money comes from and where it goes it to let them know that we adhere to a strict code of ethics. Show them the REALTOR rules for integrity, and let them know that you stand behind them.
Are there some greedy agents out there? Sure, and your clients may unfortunately have experience with them. However, please take the time to show your clients that that is NOT you… nor is it most agents out there.
Misconception #3: Sellers can establish the price on their home.
Well, sure they can, but… sellers absolutely do not understand the risk involved in listing an unrealistic or sentimental price for their home. They don’t necessarily understand how the market affects supply and demand, nor how the cost of the homes around them affect the value. Let them know why we are the experts.
Let them know why it’s such a bad idea to set a high (or a low) price for their home. Give them facts, figures, numbers. Let them see why your valuation is professional, marketable, reasonable…. and ideal.
Misconception #4: You should buy from the listing agent to get the most bang for your buck.
To us, this seems ridiculous, but the common justification for such a belief goes something like this: If an agent get to represent both sides (in other words, if they “make twice as much on one deal”), they’ll be more willing to come down on their commission.
They still make money, but the buyers (and sellers!) will get a break on real estate agent costs. We know this isn’t always the case. Sometimes your commission percentage isn’t flexible, or it isn’t set by you.
We also know that listing and buying agents aren’t the same, and that we have to be completely fair to both buyer AND seller, so there’s no room to play favorites or to cut corners. After all, we know that making one side happy at the expense of the other side means we’ve now got a 50% success rate.
Before accepting to deal with both sides of a transaction, make sure you educate your clients about what that will mean, and be sure to ask clients about their expectations. Often you’ll find the buyer’s expectations unrealistic at best and mercenary at worst, and this can be problematic down the road when you need to and want to be fair to the seller.
Misconception #5: You don’t have to get approved for a loan until after you find your dream home.
To us, it seems outlandish not to understand the need to get pre-approval for a loan before you even begin to look at homes. However, that’s only because we’ve been doing this for so long.
For many of your clients, it’s only the first time they’ve ever house-shopped. Even veteran home-buyers likely haven’t bought more than, what, five homes in their lives—and that’s on the high-side.
We, on the other hands, buy and sell daily (at least ideally). Thus, don’t judge your clients for thinking they need to know how much their dream home costs before they go ask the bank for exactly that amount in loans. Simply let them know why pre-approval is critical to avoid disappointment and unrealistic expectations.
Misconception #6: The longer a house is advertised, the higher the price.
Oh, if only we could raise our commission by even a tenth of a percentage point for every time we heard, “Oh, that’s a decent offer, but let’s wait and see if we can get a higher one.” We understand why you shake your head, but the truth is, it seems reasonable to hope that offers will spike with time as people try to outbid each other for your client’s perfect home.
Again, this can be chalked up to the simple fact that your clients don’t study market trends like you do. Save yourself time and grief by explaining to your clients up front that more time on the market means less money in the long run as buyers begin to suspect that “something is wrong” with the house, or as people lose interest or market trends shift.
Explain that buyers will inevitably believe a house that’s sat on the market for any length of time means that sellers will be desperate enough to negotiate the price downward, especially in a buyer’s market.
Misconception #7: A fast offer means the house is priced too low.
Your client may be encouraged by a fast offer on their house. However, instead of being impressed that your marketing plan has instantly put them in touch with the perfect buyer for their home, clients too often think that a fast offer means that the home is listed too cheaply and that buyers are “jumping on” a steal.
You will need to remind them that people have been out looking for their ideal home for months or even years before they found your client’s, and that the rush offer may be because the home finally fit someone’s needs. Let them know why offers roll in quickly, and again—let them know that it doesn’t mean that bids go up with time.
Misconception #8: You should go with the agent who gives you the highest value on your house.
Many people think that the best agent means the agent who is willing to sell their house for the most money. After all, the agent who lists the highest price believes they can get a higher price for the home… right?
We know this is wrong, but you must explain this to your client. You must educate them on why a reasonable, market-appropriate price will actually mean a faster and a more profitable sale.
While some agents with less integrity will flatter sellers with an inflated price and then sit on the property for months until they get to “reduce” the price for a sale, we ethical agents know that a fair market price, even if it seems lower, is much closer to the real amount for which the house will sell. Don’t be shy. Tell this to your clients!
Misconception #9: Open houses will sell their house.
Wrong again. Agents know that open houses are more about networking for prospective clients and exposure than to close on a house. So few offers come from open houses that it’s almost a number not worth mentioning.
Thus, if your client is pushing you to have open houses, simply explain why this doesn’t always work, and let them know how that would actually benefit you more than them. By all means, hold open houses. But don’t let your clients push you into pretending it’s true that the open house will equal a quick sale.
Misconception #10: You can save money by selling your home yourself.
One of the misconceptions hurting the business most is the idea that sellers are better off without an agent. They don’t believe we’re experts. In fact, they think we’re greedy, and that they can do what we do without the manipulation, lies, hassle, or commission. However, they simply don’t know what it is that we do.
Make sure you let your clients know your professional knowledge of the ever-fluctuating market. Then, show them through your statistics, etc., that you know how to get them more money on their home (and average of 10% more!) than they could sell it for themselves. Point out that sellers often list their homes before they’re staged, repaired, and ready.
Let them know that a sign in the yard and an open house every weekend won’t sell their house. Let them know that their high price which “leaves room for negotiation” is actually pushing potential buyers away.
In short, show them what you know, and remind them that you’re there to help!