It’s a NEW YEAR!… and you may be ready to purchase a home in the North Dallas Suburbs. Or maybe you would like to sell your existing home. The first order of business is to find your ideal partner-your Realtor®. I find that there is a lot of ”mystery” surrounding my profession among both buyers looking to find a buyer’s agent, and sellers looking for the right listing agent. I would like to clarify some of this confusion and explain various factors to consider when hiring your Dallas area Realtor®. These are the top 5 misconceptions that I come across most often;
1) The difference between a real estate agent and a Realtor®; Collectively, real estate salesperson licensees are referred to as “Agents”. So, what sets a Realtor® apart? A Realtor® is a member of the National Association of Realtors® and must adhere to a strict code of ethics. (I will use the collective term of “agent” throughout the post.)
2) The relationship between an Agent and their Broker; Agents/Realtors are independent contractors, and are not employees of a realty brokerage. Our licenses are “hung” with a particular broker of our choosing. Some agents choose to work through big name brokers and others choose to work with smaller “boutique” type of agencies. Newer agents often like to work with a well know brand brokerage for the extra training and guidance they provide. Others may choose national brands for name recognition. Smaller brokerages normally are conducive to agents who are experienced and work well independently. When you hire an agent you are hiring the agent more so than the brokerage. You should choose your agent strictly by their experience, knowledge, reputation, skill, area of expertise and compatible personality. Referrals from family and friends are helpful. Also, read testimonials of agents you are considering to represent you.
3) Commissions splits and how much money agents make; Commissions are sometimes split equally between the listing agent and the buyer’s agent. However, this can vary widely. The listing agent and the seller set the commission total up front. Most buyers’ agents will expect 3% of the sales price at closing, so it is important to offer this in the MLS to maximize the amount of buyer traffic. The listing agent/brokerage receives the difference. Consumers tend to think agents are overpaid. We work straight commission. We must pay our broker a cut of said commission, which varies but is typically around 30%. We pay 100% of all our own business expenses. In addition to our regular income tax, we must also pay a self-employment tax of 15.3%. We must pay annual, quarterly, & monthly association membership, and office dues, MLS & key access fees, and marketing & printing expenses. So when you see your agent’s commission amount on a closing statement, keep in mind that your agent is only taking home about 30% of it when all is said and done. When we give you a rebate or discount listing commission, we are taking a pay-cut. Some of us do this because it serves the best interest of our client and their particular situation.
4) The true role of the LISTING agent; The odds of your listing agent being the one to bring in the actual buyer are slim. It is much more likely that another agent will be working with a buyer whose criteria matches your property. So, getting a home SOLD is more a function of excellent marketing than “selling”. Your agent’s job is to get buyers in the door via effective marketing saturation. Sellers, then, have the vital task of near flawless presentation (condition & staging) and correct pricing. Of course, the listing agent should be your guide here. When listing a home for sale, it is absolutely critical that you hire an agent highly experienced with listing homes for sale, in marketing on the MLS and heavily online, knows how to handle buyer leads and inquiries (this is where selling comes in), & ensures your listing shines on paper, online, and in person! (And don’t just hire an agent that tells you what you want to hear about pricing.) Then, once you get an offer, you must have an agent in your corner that is highly experienced in negotiation, contracts, and all the other nuances that can make or break deals. After all, what’s the use of fancy marketing if the sale never closes? I’ve seen bad agents ruin deals time and time again! And your agent should be easily reachable and keep you informed of market conditions and activity all along the way.
5) Home BUYERS and agent commission; Sellers offer a commission in the MLS to your buyer’s agent. Therefore, under most circumstances, the buyer does not pay any commission. An exception may be if you have a pre-negotiated fee arrangement with your agent or some other situation, but this is usually not the case. So, you have access to full representation without paying a dime. Really?? Really!
A real estate transaction is a complex process and you need a good Realtor® in your corner to guide, educate, protect your interests, and help you accomplish your real estate goals. Please complete the short form below if you would like assistance with your Frisco, Prosper, McKinney, Allen, Plano, or North Dallas home buying, selling, leasing, or staging needs!
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