RealtyLine October 2019

Mythbusters: Busting Myths of a Client's Beliefs

WRITTEN BY RIKI MARKOWITZ

It’s tempting to believe that because the real estate economy in Central Texas is so robust that agents and brokers here have it easier than professionals in other industries. Real estate is actually one of the oldest gig-economy careers out there. So even though there’s a lot of flexibility and potential to make a good living, there are big challenges, too, like how earnings in this industry are inconsistent, burnout is high, and it can take a long time to get established and feel secure. One of the top cited reasons for becoming a REALTOR is the chance to work with different types of people, but anyone with experience will tell you that one of the stickier areas to navigate is client beliefs.

Client misconceptions run the gamut, from how expenses are covered to the type of property or banking information that agents can access. Most misunderstandings have a distinct starting point. For example, after online real estate marketplaces launched, roughly around 2004, many consumers obsessively turned to these sites to appraise the value of their home, as well as their neighbors’ homes. It’s also around that time REALTORS began hearing about how they’ll eventually be replaced by those same real estate platforms. The origins of other beliefs about the real estate industry are murkier, like how all real estate agents are filthy rich.

Here are some or the more common client beliefs that all agents will encounter at some point, and how to navigate those beliefs.

REALTORS ARE PAID A SALARY — A BIG SALARY

When RealtyLine asked agents in Austin about the client beliefs they hear most, this one almost always came up first. It’s actually pretty galling for many REALTORS because it’s a belief that has no basis in reality, but yet,

no one can seem to quash it. Whether you got your license in the 70s, 90s, or the 2010s, every agent encounters at least one client a year who believes that REAL- TORS not only earn a salary but also keep 100 percent of their commissions.

WHEN YOU'LL HEAR THIS

When it’s time to negotiate the commission on a sale, it’s a cue for some people to initiate a conversation about the agent’s supposed wealth. In some instances, “wealthy” may be code for “greedy.” So is the implication that RE- ALTORS should earn less? Or they should take a smaller commission?

WHAT TO DO

No one has really gotten to the bottom of why this misinformation has proliferated. Steven Edwards, co-owner and broker at Saddle Realty, says the only thing he can do is educate his clients on how real estate professionals actually earn a living. Fortunately, most clients have been pretty gracious, even after a belief they’ve had for so long is suddenly turned on its head.

REALTORS ARE REIMBURSED FOR THEIR TIME AND EXPENSES

This misconception is similar to REALTORS earning too much, but what makes this specific belief unique is the way some clients handle the topic when it comes up. One agent we spoke to says she has been snapped at for not staying at appointments longer or chatting more, even though her appointments often have definitive start and end times. During one appointment, on the way to her second showing, the client was a bit confrontational when she asked why more time wasn’t blocked out for their lunch because the client doesn’t like to eat fast.

WHEN YOU'LL HEAR THIS

If a client believes you earn a salary, then chances are he or she also thinks you’re reimbursed for expenses, such as gas, your phone bill, and the meals to which you treat all your clients. This belief tends to come up more in person because when clients see their agent, they look for evidence to justify those beliefs. For example, one REALTOR we spoke with said that she met a client one morning to see a few properties. The agent wore a nice, modest business suit and drove a car she bought in the last year. That morning, it was difficult for the REALTOR to ignore comments about how she affords expensive items. As if work clothes and a new car are luxuries. The client would say things like, ‘It must be nice to get gas for free,’ and ‘if I could expense my meals I would only eat at the best restaurants.’

WHAT TO DO

First, get that client some food! No, you don’t have to take them to the Driskill Grill for a $42 prime ribeye. But the best time to have a conversation about the commission you split with three other colleagues is not after the client’s blood sugar has plummeted. Once he’s thinking straight again, explain that there’s no one to whom they can submit gas and restaurant receipts. Most people are pretty good about listening to their real estate professional explain how the industry and their earnings actually work.

"I KNOW MORE ABOUT REAL ESTATE THAN YOU!"

Know-it-all clients have been around since Neanderthals sold their caves. But leading up to the 2000s, most know-it-all buyers and sellers were people who had at least one actual real estate transaction under their belt. These days, the know-it-alls are those who surf sites like Zillow

and Trulia (Zillow actually acquired Trulia several years ago) for information about local real estate news and listings. They tour properties online and obsessively compare home values. Some of these clients have no qualms about letting agents know that Zillow will soon replace human REALTORS — any day now.

The National Association of REALTORS disagrees. According to statistics published last year “91 percent of sellers were assisted by a real estate agent when selling their home.” For buyers, 87 percent purchased a home through an agent or broker, which was a steep increase from 2001. 1 In other words, since before, during and the years after these real-estate-industry disrupters launched, even more homebuyers opted to work with an agent in person rather than buying or selling a home the way people buy phones and tablets on Amazon.com.

WHEN YOU'LL HEAR THIS

When you’re discussing pricing and offers, you’ll get an earful about online calculators, neighborhood values and “Zestimates.” Sellers often want to set a price based on unrelated transactions they’ve read about online. One agent told us that clients who do all their homework on sites like Trulia are almost always disappointed after talking to a broker in person. Some sellers accuse the agents of being too passive or being bad at their job.

WHAT TO DO

First, by Zillow’s own admission, “[Zestimates are] not an appraisal and it should be used as a starting point.” 2 Of course, most clients don’t see this disclaimer. It’s important to understand where clients are coming from. Many are actually trying to be helpful and they think going to these sites is the best way to educate themselves about the market. Those clients are usually willing to listen to their agent’s expertise. On the other hand, there will always be people who need to hear the truth a few more times before they can actually internalize it.

The biggest gift a real estate professionals can give themselves is the knowledge that they don’t have to work with every client who walks through their office doors. There are people out there who are firm in their beliefs — no matter how little evidence exists to support those notions. But very few REALTORS we spoke with have ever had to fire a client nor have had to threaten to walk away either. But it can’t hurt to occasionally remind certain people that if they can get a better deal buying or selling their home online, or get a better lunch with a different agent, they’re perfectly welcome to do just that.

1. https://www.nar.realtor/research-and-statistics/quick-real-estate-statistics 2. https://www.zillow.com/zestimate/#acc

Sources: Travis County Data: https://datausa.io/profile/geo/travis-county-tx#targetText=Median%20Household%20 Income&targetText=Households%20in%20Travis%20County%2C%20TX,represents%20a%203.89%25%20annual%20growth