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Are you looking for a real estate agent to assist you in purchasing a home in Chicago? A real estate agent can be a useful asset to any buyer in a real estate transaction, but there are some myths that have been floating around this profession that aren’t true.
Myth #1: Real estate agents make easy money
Most people assume that real estate agents make easy and good money since commissions are normally between 3 and 6% of the sales price of the home. What isn’t taken into account when thinking about this myth is the amount of work that’s done on transactions that never end up closing. A real estate agent doesn’t get paid until the purchase of the property is complete, so if a transaction falls through because of inspections, funding issues, or other various reasons, the agent is not paid. If you compare the hours worked showing houses, writing up the contract, and walking their clients through the process with the actual commission paid, the money an agent makes isn’t quite as easy as people think.
Myth #2: Real estate agents only work on the weekends
A good, professional real estate agent makes themselves available to their client at all times, not just on weekends. Because the home buyer most likely works full time, their agent needs to be available to them in the evenings, on lunch breaks, and on weekends. When they aren’t meeting with their client, they are spending time researching listings and comparing them to their buyer’s wish list. Once they have taken care of their clients’ needs, they are most likely working as their own marketing agent. In a profession where you’re solely paid on commission, having a good work ethic and being proactive is the only way to be successful.
Myth #3: Real estate agents get kickbacks from lenders
This myth has been floating around for decades and is absolutely untrue. It’s actually against federal and state laws for an agent to receive any type of payment from a vendor. An agent can refer you to a particular lender but cannot receive compensation for doing so.
Myth #4: It’s better not use an agent to save money
There are a few ways to look at this myth. As a buyer, you’ll typically not have to incur the commission fee since it’s usually paid by the seller. Hiring an agent is like hiring an advocate for yourself in the buying process so if it’s is free for you as the buyer, you can only benefit from having one. While the commission may seem high to some, having an agent as a seller can save you time and money. Without their expertise, your home could be listed way under value, ensuring you will not make as much of a profit, or it could be listed way over value, which will deter potential buyers and other agents. The agent also verifies that all parts of the transaction are taken care of. They will arrange inspections, appraisals, and home warranties so that you don’t have to. All of these things can cost you money in the end if you do not make sure they are done correctly.
Myth #5: Buyers must sign an exclusivity agreement with their agent
As a seller, you’ll typically sign a contract with the brokerage house that is representing you, but as a buyer, this isn’t necessary. A buyer’s agent is basically working for free, no matter how long it takes to find their client a home they like. Because of this, it’s important to create an honest relationship with your agent up front. If you’re unhappy with their services, address it sooner than later so no one's time is wasted.
Myth #6: The most popular agent is the best agent
If an agent is popular and busy, they must be the best, right? Not necessarily. Finding an agent that suits your needs and availability is incredibly important in ensuring you have a stress free transaction. The most popular agent may specialize in commercial real estate as opposed to residential, or they may not be available as often as you would like. Make sure to talk to a potential agent and ask the questions that need to be asked: how many clients do you currently have? How often will we communicate? How often will you be available to me? Make sure you feel comfortable and confident in your decision.
A real estate agent is your advocate in one of the largest transactions of your life. The more you know, the better prepared you will be to choose your agent. What made you choose your agent?