Debunking Common Myths About the Real Estate Business | Uncover the Truth
Entering the world of real estate can be a thrilling milestone in your professional journey. However, it’s important not to fall prey to common misconceptions about the industry. Despite the fact that real estate agents are generally content in their work, there are certain aspects of the business that may surprise you once you’ve embarked on this new path. Read on to uncover myths about the real estate industry.
What you should know before getting into real estate
Here’s what working real estate agents want new agents to know about getting into real estate.
1. Myth: Sellers shouldn’t update a home before listing it
A big myth in real estate that people just getting into real estate have is that buyers have their own taste and would prefer to do their own updates instead of purchasing something recently updated by a seller. Sepehr Niakan, of HB Roswell Realty, says that’s not always the case.
“Most of the time if you make smart mainstream upgrades or updates to your home, buyers will pay a significant premium over the cost of the upgrades,” said Niakan. “Common updates would be new flooring, interior and exterior paint, bathroom and kitchen plumbing fixtures, baseboard upgrades and new light fixtures. A bit more expensive updates would be kitchen and bathrooms, but if done right those will bring you a significant return on investment.”
He also suggests an additional benefit to upgrading a home before listing. “Houses that are updated tend to sell faster than homes that need work. And time is money as well.”
Real life example: “I learned this lesson before I was a real estate agent in my first condo. I had listed it and showed it for a few months with no offers. I took it off the market and got a friend of mine who is a designer to help me pick out a floor, paint, change the baseboards, and change the kitchen sink to a deeper. We changed the kitchen faucet and acid washed the floors in the bathroom and kitchen to make them look fresher. Before I even had a chance to finish all the renovations I received a full price offer which was the original list price plus three times my renovation expense.”
2. Myth: Your first offer is your best offer
Sometimes agents who are getting into real estate jump at the first offer on a property, thinking, “this is better than nothing,” and they have to move fast. Niakan explains why this isn’t the best strategy.
“In my 13 years of experience selling hundreds of homes, I can assure you with 100 percent confidence that your first offer is rarely your best one. Will you sometimes have to wait some time for the next good one to come? Definitely, but if you wait for the right buyer, especially in an up market or a property with unique features, you will almost always win by having patience,” he said.
Real life example: “I learned this in earnest while listing bank-owned properties for Fannie Mae. They would almost always list for 10 to 20 percent above market value, and they would almost always sell for at or above market value, while I watched other lending institutions unload their foreclosed properties at or under market value, many times because they would take the first good offer that would come through.”
3. Myth: Cash offers are always better
Any real estate agents who are just getting into real estate assume that any offer in cash is better than offers where financing is involved.
According to Jane Peters of HomeJane Realty, this isn’t necessarily always true. “Cash offers may be lower than the traditional offer, and there may be terms that are not favorable,” she said. “A well-written, strong traditional offer can beat out a weak all-cash offer.”
What to do: Regardless of whether your client is buying or selling, make sure you factor in all the elements that could make an offer more attractive. Think beyond the offer amount. Here are some other factors to consider: settlement date, closing costs, inclusions such as custom furniture or fixtures that you want to remain in the house and even personal emotions and details that can make a sale more gratifying for both sides.
4. Myth: This is an easy job
Seminars can make a real estate career look easy, and social media can make it look glamorous — but remember, both of those channels focus on showing you the highlights.
“It’s not rocket science, but there is a lot of info to know regarding the market, language of the business, lending, negotiating,” said Brad Pauly. “Also, without a large network, it’s not so easy to find clients.”
“Surely, money can be made,” said Denise Supplee. “But there are man-hours involved. For instance, showing homes takes time. And I have had clients I worked with for close to a year before finally getting to the settlement table. There are phone calls, hand-holding, negotiations and phone calls. Truly, if you were to add up the hours against the income, you would be surprised. So, be sure you have a passion for service and a love for real estate.”
What to do: “Find a great company that caters to your specific needs,” said Pauly. Finding the right brokerage when you’re just getting into real estate can be daunting. Look for a brokerage that will invest in your growth and offer the right long-term support to help you become the agent you know you can be.
5. Myth: Spring is the best time to put a home on the market
If you’re just getting into real estate, you might have heard that you shouldn’t list homes in the fall or winter. So many people subscribe to this belief that the housing market is often flooded in the spring. “Often there is a much larger competition as the supply of homes bumps up for two to three months, which works against many sellers,” said Michael Edlen.
What to do: Edlen suggested being open to listing in other months to stay away from the times when there’s extra inventory available. “In many areas, February to March is much better. Also, October can be an outstanding time to be on the market, before the holidays,” he said.
6. Myth: What you see on HGTV is real life
Your love for HGTV might be one of the reasons you’re getting into real estate — perfectly good reason — but don’t believe the myth that your clients will see three homes and automatically know which one they want. “I just showed 21 homes in one day to buyers from out of state,” said Patricia Vosburgh. “They were military and moving here from North Carolina. They only had one day to see quite a few areas and make a decision about where they wanted to live. I put over 200 miles on my car that day. We also showed a client 75 homes before they made a decision. It will not be like HGTV and reality will set in when your buyer wants to see more homes.”
What to do: Reset your expectations. Real estate is one of the happiest careers in America, but you have to be prepared to work hard and cater to the needs of your client.
7. Myth: Your education stops when you get licensed
In our survey of real estate agents across the nation, we found that the highest earning agents stay updated on the latest trends and best practices. “If you are not keeping up with the trends, you will drop off by the side,” said Denise Supplee. “Surely, you may hate technology. However, buyers and sellers today are more tech-savvy than not. And you will still need to be in-the-know for market conditions, legal changes and the like.”
What to do: Use all the resources at your disposal — podcasts, blogs, seminars and continuing education classes. “I try and read and take any classes that I can,” said Supplee, adding, “most states have mandatory continuing education requirements anyway.” As she put it: “The more you learn, the more you will earn. Remember, people are using you to guide them in the most expensive transaction in their lives.”
