Living in an age where instant information, powerful technology, and consumer control has made everything faster and cheaper, don’t you find it strange that selling or buying a house still requires expensive real estate agent commissions? It's almost as though the real estate industry has been trained to discourage transparency, restrict the flow of information, and complicate simple tasks. After collecting months of feedback from buyers, sellers, and a wide variety of industry professionals, our team at TRELORA has discovered that the same knowledge is being hidden by practically every agent working with a buyer or seller in today's real estate market. Here are the top 5 things it turns out your realtor doesn't want you to know.
1. Commissions are Effectively Split Between the Buyer and Seller
For decades, we have all been conditioned to believe that a seller pays all real estate agent commissions. This is a dangerous myth that has to be debunked. The truth is that no one gets paid until a buyer brings money to a closing table. Think of it this way. A home’s market value doesn’t automatically include realtor commissions, right? Therefore, to accommodate realtor commissions, either the seller has to release more home equity and walk from the sale with less money, or the buyer has to borrow more money to increase the purchase price and further delay achieving positive equity. Most agents don’t want you to know that EVERYTHING in the transaction, including their commission, is negotiable. They’d prefer that you just keep paying high fees based on an antiquated process.
2. When They Withhold Information, You Need Agents More.
Your real estate agent is no different than you or anyone for that matter; they want to be in control. But, why do they want so much control? Think about it. By managing critical information that you can’t easily access alone, they protect their value in the transaction and maintain the upper hand in almost all aspects of your process. This allows them to convince, or in many cases force, you to pay much higher fees and commissions than would be necessary if information were allowed to flow freely. As a buyer or seller, the more knowledge you gain, the more power you gain. This power translates to better decisions about how much money you spend on professional services related to the sale or purchase of real estate.
3. It's Just Not as Hard as They are Telling You.
Talk to a real estate agent about his or her line of work and you will hear how hard it is, how much work is involved in selling your home, and how dangerous and risky it can be if something goes wrong. By that same measurement, daily activities like driving your car, buying a product online, or starting a family would also need a high paid assistant.
While selling a home requires a lot more brain cells than watching your favorite reality TV show, it’s not exactly brain surgery. A majority of real estate agents spin up huge lists of all the marketing, communications, and tasks they do in an effort to justify the high fees they want you to pay. In reality, the more freely information can be accessed by everyone, the less work is required by each party. Full transparency ALWAYS makes for a smoother transaction, which should translate to fewer working hours for realtors and more money in your pocket!
4. Transferring Ownership of Property Gets Easier Day - by - Day.
Yep, thats right! The process of selling or buying a house gets easier and easier every single day, and this is not going to stop any time soon. Technology has changed everything, including real estate. Buyers can easily find the homes they are interested in, research walkability, evaluate schools, check out crime statistics, and pretty much anything else they want -- all online. Contracts are now electronically signed and showings are electronically managed. Just these 3 changes alone have cut the workload (and value) of real estate agents. There are many more areas of the process that have advanced and will continue to advance making the job easier. The entire real estate industry needs to lower its fees to align with our new world and modern realities. Every other industry is doing this, and it’s time for real estate agents to admit that it’s 2015.
5. Realtors have Peer Pressure, Too!
Sad but true, there is a loud and clear message in almost every real estate office across the country that if you lower or negotiate your commissions with a client, you are a turncoat who doesn’t believe in your own value and is insulting your entire profession. The underlying motivator for this behavior, however, is fear. They understand that once enough real estate agents agree to lower fees, the same thing will happen in their industry that has happened in many others. By the way, when was the last time you called or walked into a travel office to have someone book an airline ticket, a cruise, or manage vacation logistics? When this happens to residential real estate, most of the real estate agents will need to seek new careers or supplement their income by other means.
No one wants to be picked on, especially by a group of colleagues. Few REALTORs want to admit that the career they chose is dissolving, because change can be scary. Regardless of how anyone feels, though, this change is already underway and cannot be reversed.
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