5 Misconceptions About Real Estate Agents
A lot has been said about Real Estate Agents and I must say that most people have been less than satisfactory experiences with one. Most of the unpleasantness is a result of misunderstandings and lack of open and clear communication.
This list is by no means exhaustive but suffices to address the general concern of buyers and sellers in the market when working with estate agents. Real Estate Agents in Malaysia are governed under the Valuers, Appraisers and Estate Agents Act 1981 which provides for their regulation by the Board of Valuers, Appraisers and Estate Agents (now known as Board of Valuers, Appraisers, Estate Agents and Property Managers or BOVAEAP) under the purview of the Ministry of Finance.
1. Real Estate Agents are Always Late for Appointments
There is no excuse for habitual tardiness among professionals regardless of the industry. Being on time or early for appointment indicates respect for the other person, and every person deserves respect. An agent should not possess a deluded impression of his or her own importance. Being late does not make one an important or special person.
Good agents are always on time for appointments be it for a listing appointment, viewing or servicing appointments. They will make it their top priority so that their clients know that they are important. Good agents know that giving excuses for not being on time means losing respect and credibility with the client. The client will think he or she is unreliable. Don’t let a few bad apples give the entire industry a reputation it doesn’t deserve.
2. The More You Pay for a House, the More an Agent Makes
Ever hear a friend say this? “The more you pay for the house means that the agent gets more money, so don’t trust that agent!”. That’s a misunderstanding. The difference between RM500,000 and RM510,000 is about RM300 to a real estate agency and about RM120 to the agent (assuming Professional Fees at 3% based on the Selling Price).
Do you really think the agennt pays any attention to the commission difference of a RM10,000 spread? Even if the spread was at RM50,000 the difference to the agent would be about RM600 only.
The important question you need to ask yourself is how much is the house worth to you?
The important question you need to ask yourself is how much is the house worth to you? Is it worth losing it with the back and forth negotiation with the seller who could also be receiving other offers at the same time? As the buyer, you would have done sufficient research on the type of property you want to buy and the estimated price range to make an informed decision on your offer.
3. The Less Commission You Pay to Sell, the More You Make
Professional Fees for an Estate Agent’s service to sell a property is only 3% based on the Selling Price. The seller still makes the large portion of 97%. Discount agents like to propel this myth. The truth is, agents who are top producers and excel in this business do not discount services. It comes down to ‘you get what you pay for’.
If he or she has to reduce fees just to compete for business, what does that say about the agent?
A 1% commission reduction doesn’t amount to much when your price is discounted 10% or more just because your agent couldn’t afford full market exposure or lacks the expertise. Consider this: If he or she has to reduce fees just to compete for business, what does that say about the agent?
A top agent once shared with a large audience of agents at a real estate agents’ convention that if the agent can’t even negotiate his or her own fees, how can he or she negotiate the deal for the client? Well said.
Generally, it doesn’t cost any more to use a reputable Real Estate Agent from a well-known company from the less known companies. Select well.
4. Agents Sell Their Own Homes for More Money Than Yours
Busy agents and top producers don’t have the luxury of time when selling their own properties. In fact, you will be surprised at how many agents use other agents to market and sell their own properties. This is because they are well aware of :
- Firstly, the need to be an expert in the particular area or building;
- Secondly, the luxury of having an exclusive agent on the job;
- Thirdly but more importantly, the need to take the ‘sentimental’ or ‘personal’ out of the sale process.
Agents also understand the market better than the average home seller, which means if a home isn’t selling within a reasonable period of time, it means that it is priced too high.
5. Agents Will Say Anything to Make the Sale
Although it is true that some agents will lie to you, it is unfair to paint all agents with such a broad brush. Top producing agents, those who enjoy a solid reputation in the community and practice honestly and truthfully, are very careful to uphold a client’s trust.
Making misrepresentations or false statements is against the law.
Making misrepresentations or false statements is against the law. Agents who break fiduciary relationships or fail to disclose material facts are subject to prosecution and loss of their license to sell real estate.
The agent’s goal is to give a positive experience because much of the agent’s business comes from referrals. It is in the best interest of the agent to provide excellent service which translates into happy and satisfied clients in order to ensure long term business.
In this age of information, it will be very difficult for an agent to get away with false information to mislead buyer or seller into making the wrong decision.