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Misconceptions Regarding Realtors

July 17th, 2007 by Tom Reed & Bill Brown

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When the time comes to buy or sell a home in Denver you and your family needs to learn the sales process of working with a Denver area Realtor to optimize your real estate experience. Today we will discuss some of the most common misconceptions of working with a professional real estate agents and help you better navigate through this very important business transaction.

1.) Real Estate Agents make too much commission.

The data suggest that this statement just isn’t accurate. The median income in 2006 for real estate agents was approximately $47,000. In addition over fifty percent of Realtors employed at large brokerage firms completed about 4 real estate transactions per year. Taking into account all the necessary expenses, escalating fuel costs, specialized real estate insurance and multiple office fees most real estate professionals find it difficult to make a living as a full time Realtor. This answers the question that Realtors do not make too much money compared to other professions and their commission structure is in line with the services they perform.

2.) The lower commission you pay to sell your home means more money for you.

This an erroneous claim put forth by most discount real estate brokerage firms, which we will proof to be false. The truth of the matter is if you pay less commission you also likely receive much less marketing support and involvement from your Realtor. A properly paid top notch real estate professional will offer a much more aggressive marketing plan along with many other proven techniques to sell your house quickly and with much less stress. For example if you try and save two percent on the commission you pay your broker but sell the house ten percent below the accurate market price you will not benefit from the commission cost saving. In short top producing agents do not discount their services because they will net the homeowner much more in the long run when their house is sold.

3.) To receive the best deal on a home call the agent listed on the for sale sign.

One of our specialties at Legacy Real Estate Brokers Inc. is to represent buyers looking to purchase their home. We have access to the best search tools available and utilize our experience and knowledge to best represent your specific home buying needs. When you contact the Realtor on the for sale sign you are communicating with the Realtor hired by the seller whom has fiduciary responsibility to best represent the seller not you the potential buyer. They can and will pass along all your information directly to their client, the seller, which will greatly decrease your chances of obtaining the best deal possible for you, the buyer.

4.) When you pay more for a home your Realtor makes more money.

This is yet another real estate misconception which does not hold much truth. Realtor works on a percentage basis and it does not greatly increase if the property price increases. For example if you are looking at the difference between buying a home at $400,000 or $420,000 this translates into a commission difference of about $280, which is not very significant change from our perspective.

5.) Lenders, title companies and inspectors give kickbacks to real estate agents.

In 1974 the Real Estate Settlement Procedures Act was create to stop any type of kickbacks to Realtors. Any violation of this act could result in a real estate professional losing their license and the right to further practice their livelihood. This proves yet again that this is clearly a real estate misconception and it would not be worth any Realtor jeopardizing their future income potential.

Now that we better understand the real estate business and the few common misconceptions associated with hiring a professional Realtor, we can see that like many other noble professions it pays to utilize a professional realtor like the knowledgeable and experienced ones available at Colorado’s premier real estate firm, Legacy Real Estate Brokers Inc.

Tom Reed and Bill Brown are local authors and real estate experts of Legacy Real Estate Brokers Inc. in Denver Colorado. You can visit their website at www.discovercoloradorealestate.com.

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