During one of my seller interviews, I spoke with a woman in Jacksonville, FL whose mother just died. She needed to sell her mother's house and did not know where to start. She called a Realtor. Thankfully, her mother had the house appraised the year before.
When the realtor showed up, he was smooth and talked a good game. He recommended that she list her house for a lot less than the appraisal value.
She did not make a decision right away.
Low and behold, she received a call from the real estate agent less than a week later who had a friend willing to buy her house for his suggested listing price if she would sign with him.
Sound fishy? It did to her.
That is why she listed the house herself and sold it for the appraised value.
There are many real estate agents out there that are honest. But there are a lot of real estate agents. (It is really easy to become one). It is hard for them to get clients. So, many of them resort to lying.
If a real estate agent tells you any of the lies below, say no thank you and move on to the next candidate. Better yet, sell your home on your own. It is easier than you think.
Lie #1: Listing Your Home With a Real Estate Agent Can Get You More For Your House
This is a lie that is promoted by the National Association of Realtors. Every year they conduct a survey and they compare how much a home is sold for when a Real Estate Agent was used by the seller and how much a home is sold for without an agent. “The typical FSBO home sold for $184,000 compared to $230,000 for agent-assisted home sales.”
The truth is that homes listed by agents are just worth more. There is no clear evidence why higher priced homes are listed with agents. My theory is that two income households can afford more expensive homes and are using agents to sell them due to time constraints.
Lie #2: Selling Your Home Takes A Lot of Time
This is true, but the tasks that take the most time are completed by the homeowner. These include getting the home ready for sale (cleaning, fixing up the house, painting, etc) and getting the house ready for a showing.
The real estate agent spends about…
- 15 minutes to determine the listing price for your home.
- 15 minutes to write up your listing for the MLS and another 15 minutes posting it.
- 2 Hours to take pictures of your house (usually they will try to get you to pay a professional).
- 1-2 hours of consultation with the agent (usually them adding more items to your to do list).
- 1-2 hours to coordinate showings. The agent takes calls from other agents to arrange showings. The agent calls you confirm the time and then gives the lock box code to the other agent. Yep, your agent does not show your house. They are not even around during the showing.
- 6 hours to host an open house. However, agents use this tactic more to market themselves to potential buyers than to market your house.
- 1 hour to go between between the seller and the other agent during a negotiation. Make no mistake, you are doing the negotiation. The agent is only the go between.
- 15 minutes to fill in their sales contract template to give to the buyers once a deal is struck.
- 2 hours taking requests/questions from the buyer's agent during closing. Mine kept reminding me to mow the grass…when it was raining.
So, lets add all this up. The seller's agent will work 16 hours to sell your home. Let's give them the benefit of the doubt and round this up to
25 hours. If you sold your home for just under $175,000, you would pay your agent $5,000 or just about $200 an hour. Worth it? Not for me.
Lie #3: Selling Your Home is Complicated
That is the lie I bought hook, line and sinker when I sold my first home. The fact is that there are two complicated pieces to selling your home. The first is pricing your home. However, you can pay $400 to have it appraised (or take my course for $28 and do it your self). The second is all the complicated paperwork during the closing. Hire an attorney for less than $500 (sales contract and consultation) and this is covered.
Lie#4: They have exclusive access to a an army of agents that will market your house
You now have access to that same MLS system using a flat fee service like fsbo.com for only a few hundred dollars. As long as you offer to pay the buyer's agent commission, they will bring buyers to you.
Lie #5: You have to negotiate with a bunch of different people
Wrong again. You only negotiate with one party – the buyer or their agent. You don't even talk to people like the home inspectors.
Lie #6: Real Estate Agents Have an Internet Strategy
This is true, but the strategy is not aimed at selling your house, it is aimed at getting the agent more clients. Don't believe me? Google Real Estate Marketing. Most of your top results are for helping real estate agents sign more clients.
Lie #7: You can't negotiate commissions
You can, especially if you use your agent for both the buying side and selling side. Agents split this commissions with their Broker. This means that some of your commission goes straight tot he broker. However, the rest goes to agent and it is their discretion to discount.
Liet #8: The Biggest Lie of them all…The Agent Represents You
The only person an agent legally represents is the Broker for whom he works. In fact, if you read your listing agreement, you will find clauses that holds the agent harmless if he makes a mistake. Real Estate Attorney Zach Roth tells a compelling story about one homeowner was left holding the subpoena after his agent failed to deliver the disclosures. This one can come back and bite you in the booty big time.
Your turn
Have you been told a lie by a Real Estate Agent? Tell me about it in the comments below.
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