Part 1: Common Misconceptions About Real Estate Agents.

From time to time, I encounter or read comments from the public regarding their concept of Real Estate agents and how they earn their living. I was thinking about it today so I decided to compile some of these misnomers and address them in today's blog. I came up with a lot of them so I've split them up into a few parts. The rest will be available soon so stay tuned...

Unless you’ve walked in the shoes of a Real Estate Agent, you may think that what they do is an easy way to make a lot of money. If you think this, you’re mistaken. Here are some common misconceptions about Real Estate Agents:

1. Real estate agents earn 6% commission. Response: Often, commission to list a residential property is 6% but there is no standard, set commission in any area. The listing agent markets the property to buyers’ agents and the public and offers (usually) half to buyer’s agents as incentive to show buyers. Along with the (3%) commission, each agent has a negotiated commission split with their office, depending on experience and/or performance so the brokerage gets a part of that. Sometimes, the agent pays a monthly fee to their brokerage, as well.

2. Real Estate agents are paid a salary. Response: Agents work for 100% commission and don’t get paid until after a transaction closes.

3. The company pays for the agent’s expenses. Response: At least in this area, agents pay for their own signs, gas, advertising, affiliations with clubs and associations, licensing, car insurance, errors and omissions insurance, MLS fees, cards, websites and everything else associated with their listings and marketing themselves to gain clients.

4. MLS is for the public. Response: The MLS (multiple listing service) began as a way for agents to share their listings with agents. It started out as a book and, in the mid to late ‘90s, it was put on the internet. After a while, this information became available to the public. Agents pay for their listings to be in the MLS. In the 2000’s, online “lead generation” companies, started to use the information in the MLS to attract buyers and then sell the buyer’s information (back) to the agents (who, ironically, still pay for the listings to be available to these companies).

As I mentioned before, there's a lot of information here so please check back for part 2 and, as always, if you have any questions about Nashville Real Estate, or Real Estate in Tennessee, I'll be glad to answer them.