The real estate industry is not an easy-to-understand market. Many myths and misconceptions are floating around out there that limit people’s opportunities in real estate. It is one of the most lucrative industries, but it’s also one of the most misunderstood. Read below to see some of the most common real estate myths.
Myth: Real estate agents don’t make money.
When buying a home, a person typically pays a small fee to the real estate agent as a commission on the home’s sale. Some people think that since they are only paying a small percentage of their overall sale price, they aren’t paying anything substantial and won’t get much help from the agent. The compensation of a broker varies according to the services and products offered by each brokerage firm.
For example, some firms pay commission only on the first home a buyer purchases through them. Other firms may pay monthly fees to access their research data, consulting services, or other products. A 5 percent commission in most areas can quickly amount to $10,000 or more on a $250,000 house.
Myth: Real estate agents don’t have much experience.
Many people indeed enter the real estate business without any experience in sales or business management. However, it is also true that many highly experienced and successful people choose to go into real estate sales because they know it’s a lucrative career option with low barriers to entry.
Myth: Real estate agents are all crooks.
People hear these stories about real estate agents selling houses without a license or taking the first offer. They know that the buyer is desperate or not paying for services rendered but passing them off to the seller, who then has to pay for them. While there are some unscrupulous people in every industry, the vast majority of real estate agents are honest and hard-working, just like anyone else in any other profession.
Myth: You need to be wealthy to start real estate investing.
A person doesn’t need to be wealthy to invest in real estate. Someone doesn’t even need a lot of money to get started. When buying residential real estate, one can get started with as little as $1,000 or $2,000 by taking out a loan or getting help from a family member or friend who has some extra cash.
Myth: Real estate investing is risky.
It’s a myth that real estate investing is risky. It’s just the opposite. The most significant risks in life are the ones we avoid. When we sit on our hands waiting for our ship to come in, we’re missing out on all the other opportunities coming our way. When we play it safe, we give up control of our lives.