Real Estate Myths - Debunked
By Guest Columnist Mallory Savner, Licensed realtor, Veterans Realty
Buyers and sellers alike often enter the real estate market with
preconceived notions of the real estate process and how it all
works. Sometimes these notions are incorrect, so we want to clear up any misconceptions and hopefully help alleviate a little stress.
1. You can’t buy a for sale by owner (FSBO) home if you have an agent.
Truth: many sellers realize that real estate transactions are complicated, and most buyers have agent representation. Even though the seller may choose not to have representation, they often will offer payment to a buyer’s agent in order to attract agents’ buyer clients. If you see a FSBO, ask your agent to help - most sellers will compensate them, and you will benefit from their knowledge & expertise.
2. You save money by selling your home yourself as a “for sale by owner.”
Truth: While many sellers have other reasons for going it alone, many choose to do so in order to save money. This sometimes may be the case, but statistics show the opposite seems to be true. According to NAR (National Association of Realtors), in 2019, the typical FSBO home sold for $200,000 versus $280,000 for agent-assisted home sales. This is due in large part to an agent’s knowledge and expertise. Most people do not buy or sell homes everyday (that’s where an agent’s experience comes in - this is what we do every day), and in Mississippi, they do not have access to all of the information that is available to agents. A real estate agent makes sure your home is priced correctly, marketed effectively, and has the time & know-how to negotiate contracts and ensure all deadlines are met.
3. Buyers pay all closing costs.
Truth: While many of the closing costs are associated with the buyer (lender fees, reserve on taxes & insurance, etc.), and sometimes that is the case, it could be argued some closing costs are equally as much the seller’s as the buyer’s - such as closing attorney fees. Both parties want the home to sell, and both parties need a closing attorney and title search to do so. All markets differ, and there is not just one way to handle closing costs. It will vary dependent upon the transaction. All closing costs are negotiable as part of the contract. Your agent can help you (whether you are the buyer or seller) determine the best way to handle closing costs and what makes sense for your situation.
4. Buyers choose closing attorney/title company.
Truth: This comes back to the above myth that buyers pay all closing. If buyer is paying all closing, sure, they should pick the attorney/title company. In short, whomever pays majority of closing chooses the closing attorney/title company. If it’s split 50/50, buyer & seller will come to a mutual agreement as to who the closing attorney/title company will be. However, it is a best practice to discuss among both parties to come to a mutual agreement on closing attorney/title company regardless of who is paying.
5. Real estate agents can only show their own company’s listings.
Truth: Real estate agents can show any listing available. Most agents belong to the local real estate board and MLS (multiple listing service) and have access to any listing that is multiple listed & also FSBO (see above!). If you are a buyer and have an agent you would like to work with, get in touch with them. As your agent, they have a fiduciary duty to represent you and work on your behalf with your best interests in mind. And generally speaking, it is completely free of charge to you!
6. Agents get paid a salary.
Truth: The majority of agents work on a commission-based scale. It’s important to keep this in mind, because time is literally money for an agent. Agents do not get paid until the transaction makes it to the closing table. If you are looking at multiple agents to work with, be upfront about that. You have every right to interview agents to find the best fit, but it is courteous to let them know that and choose an agent to work with before they spend time working for you.