The real estate industry has never been great at transparency. Some of the misunderstandings about the real estate industry are by design, and some stem from the sometimes complicated process of buying and selling a home. Let's look at some of the differences.
Recently Inman, the leader in real estate industry news, ran an article about a survey that was done by a company called Clever Real Estate. Clever surveyed 1,000 homeowners in February that plan to sell in the next 12 months and found many didn’t understand how real estate commissions work. According to the survey, 45 percent of home sellers understood they would pay a commission to their brokerage and agent but were unaware they pay the buyer’s agent commission as well.
Home Seller Misunderstandings
In my opinion, much of the misunderstanding about commissions and fees in the real estate industry is by design. Years ago all agents represented the seller. When the seller paid a commission the full amount went solely towards their representation. In the years after, buyer agency became a thing, and the seller lost half the representation but still paid the full commission. You can see why a degree of ambiguity regarding the switch in business practice was necessary to maintain the status quo.
Later a thing called a transaction or broker fee was implemented by many companies. Most buyers and sellers that sign on with an agent understand little about what the additional fee covers but figure it is just another expense they must pay. I have written about the transaction fee in detail.
Follow this link to read more about what a transaction fee is: https://jeffreyhoguerealtor.com/shedding-light-real-estate-transaction-fee/.
Home Buyer Misunderstandings
Consumer misunderstandings about the real estate Industry do not stop with the seller. Many prospective home buyers have no idea who they are contacting when they want to see a home. Major home shopping websites like Zillow and Trulia take advantage of the confusion relating to the representation to sell advertising and distribute leads to real estate agents. In some cases, buyers never get properly connected and lose out on a home they wanted to see. It is my opinion these real estate websites could be more transparent in their explanation of who the seller's representative is and who is a buyer agent and provide better guidance.
Recently, I implemented a home selling program called Real Estate 1.9. The program is meant to reduce a seller's costs to sell a home while adding full transparency relating to the "how, what, and why" of where their commission dollar is going. And by the way, there is NO transaction fee, Period!
For home buyers, we now have a Reading-Berks Home Showing Hotline. Prospective home buyers can visit my website and search for homes. They can text or call the Home Showing Hotline at 610-266-2124. We can arrange for them to see any home for sale in the Reading and Berks County area. We offer full buyer representation and explain what buyer representation is. No more visiting big company real estate sites and wondering who will get back to you — no more missing out on that home you want to see.
The real estate industry is full of twists and turns. People do not buy and sell homes every day. On average they do so about every seven or eight years. A lot of things change in the industry between those times. It is essential that you find a real estate agent that can provide guidance and explain the intricacies of the business.
Article 1 of the Realtor® Code of Ethics states: When representing a buyer, seller, landlord, tenant, or other clients as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. "NOT THEIR OWN!"