As a realtor, of course I understand a lot more about the business and take for granted that the general population doesn’t understand what we do for a living…or how we function and operate as business owners. I’m on a quest to myth bust today. If not for the general population, maybe this will set just one person straight that is thinking about getting into the business and making some “easy money”. If you have any perceptions about real estate or realtors, feel free to comment.
Myth: Realtors work for their respective brokers.
Fact: Realtors are independent business owners. We file a 1099 with the IRS, pay self employment taxes, pay our respective brokers a hefty percentage of each commission, marketing, board dues, etc. individually.
Myth: HER is an all women’s real estate brokerage.
Fact: HER is a company that was founded in 1956 by a man named Harley E. Rouda.
Myth: Realtors get a small salary + commission.
Fact: Realtors receive no compensation until a home is sold. The gas money, time, and research done prior to the home sale is all compensated for at the closing. Further, realtors actually pay the companies that they work for a hefty fee in order to advertise under the brokerage umbrella. Any health insurance, personal marketing, etc. are paid for by each independent agent.
Myth: Realtors do open houses to sell the house that is being held open.
Fact: While every once in awhile this does happen, an open house is typically done in order for the agent to procure buyers that will end up buying another home.
Myth: A realtor with the Million Dollar Award has made a million dollars.
Fact: In order to receive the Million Dollar Award, a realtor must have sold 2 million dollars worth of real estate…5 Million dollar award = 10 million in real estate…and so on.
Myth: Realtors get paid a lot of money to show houses.
Fact: While some bad apples tend to spoil the bunch, most agents help people make good decisions. Buying a home is usually the largest investment a person makes in a lifetime and they don’t do it every day. We do.
Myth: Having a friend represent me as their Realtor is a conflict of interest.
Fact: I have represented many friends in buying/selling and have never let it come between a relationship. In fact, many of the testimonials that I’ve received have come from friends.
Myth: Realtors get a kickback for sending referrals to mortgage lenders, inspectors, etc.
Fact: RESPA (Real Estate Settlement and Procedures Act) actually prohibits realtors from receiving an incentive to send their business to certain vendors. If a realtor refers you to a company, they actually believe in the person/service that the company/person provides.