Real Estate Myths Debunked

The recent settlement from the National Association of Realtors has everyone on their toes. Buyers, sellers and agents are working to adjust a process that historically has had minimal change. Luckily, we’re no stranger to rethinking real estate — it’s what we do best. We’ve spent the last decade as your trusted real estate resource, and know you may be getting mixed messages. So let us do the work for you. Here’s a breakdown of myths + facts:

MYTH

6% was the “standard” commission.

FACT

There may be a gold standard for agents, but there’s never been a fixed standard when it comes to commissions. Commissions can range from a low flat fee of a few hundred dollars to above 6%. And, we’ll share some news — the average commission has been below 6% since 1992. So the fixed 6% is a 100% misconception.

MYTH

This is the first time in history that real estate commissions have been negotiable. 

FACT

Commissions have actually always been negotiable. And rates vary from one area to another, one agent to another, and one transaction to another. That said, agents do have the right to communicate the rate we feel we deserve, and prospective clients can make the choice to work with us — or find another for a lower fee. But we recommend the working with us option. 

MYTH

Sellers will no longer be allowed to offer Buyers’ Agents a commission. 

FACT

While the settlement proposes that offers of Buyer Agent compensation will not be allowed within MLS listings, sellers are still allowed to offer Buyers’ Agents a commission — and to make that known through other platforms and marketing materials. 

MYTH

Anyone who listed and sold a home with an agent in the past is entitled to compensation. 

FACT

There’s only a limited group receiving limited funds. Only sellers who were part of the class-action, and who listed properties with certain real estate companies, are eligible for compensation. And what’s more — the payouts are likely to be modest, with legal fees taking a substantial portion of the settlement amount. 

MYTH

Real estate agents will be required to charge less moving forward.

FACT

Nothing in the settlement says that an agent has to charge less for their services. Real estate agents have the right to charge as much, or as little, as they want to for their services. Our advice? We recommend you work with time-tested, trusted partners who give you seamless transactions, superior service — and exceptional results.

MYTH

Home prices will lower substantially and become more affordable due to the settlement.

FACT

While it’s yet to be determined if commission rates will decrease due to the settlement, we do know that market conditions and the economy dictate home prices — not agents’ fees. Commissions can be an expense within the sales price of a home, but they do not impact how much buyers are willing to pay. That would be good old supply and demand. 

MYTH

The settlement is good news for buyers because they can avoid working with an agent and save money.

FACT

While some buyers are hopeful they’ll be able to buy a home for less by eliminating the Buyer’s Agent, navigating real estate transactions without a trusted advisor is very challenging — and ultimately can cost more. Sellers may opt to not adjust prices for buyers without an agent, and attempt to retain potential savings for themselves. The bottom line? A Buyer’s Agent is usually an invaluable investment in your real estate journey — and your peace of mind.