Like any other business sector, the real estate sector is under constant change. It is and will always be one of the best sectors to carve a successful career. The dividends of the real estate market are always very high. But, having said that, most of the people still believe the negative things said about the real estate sector. It is important to seek the truth before you decide to or not to venture into the real estate business. While some of the myths around real estate are simply made up theories, there are others that have cropped up from misinterpretations. So, in this light, it is important to portray the right (and actual picture) of the real estate market and the way things are here. Here are some of the common myths and their actual interpretations.
10 Common myths about the Real Estate you need to know
#1: It is a Simple Business
The flexible schedule and independent office hours may define the real state as a simple business. However, deep down at the base it includes complexities. With the drastically increasing competition in the real estate sector, the industry requires more efforts and determination to succeed. One needs to keep the clients’ requirement on priority ignoring one’s own preferences and profit needs.
#2: You Get a Steady Income
Real estate business is highly volatile and thus assuming a steady growth, in the long run, is a big expectation to have. The real estate market runs fairly on supply and demand and hence any case of recession, demonetization or market fluctuation can affect the steady income of agents and property rates adversely.
#3: Real Estate Market always Skyrockets
There is a prominent myth that the real estate market will always go up and most people believe in it. However, as mentioned above, the property market is volatile and shows rise and fall periodically at a slow rate. Once the prices fall terribly they will of course come up, but that will take time. So, patience is the name of the game in the real estate business!
#4: Location Decides the Value
Many investors believe that locations play an important role in determining the value of real estate property, which is far from the truth. Yes, with a good location any property has a good start. But it is the future prospects of the area that draws sales. The future plans should excite the buyers.
#5: Every Real Estate Agent is the same
As we see in various industries, the professionals are known and weighed as per their skills and experiences in the field. Similarly, skills of a real estate industry agent are also determined by expertise as well as experience. So, there should be no shortcuts in selecting a real estate agent. Only the agents with high expertise should be selected when you are selling or buying a property.
#6: Real Estate Agent Earns a Lot of Money
Another common myth is that all real estate agents make a lot of money. Though there is no doubt that successful agents certainly get a bucket load of money from their commissions, it is not always the case. The average real estate agent is paid a legal commission from the buyer’s and seller’s side. However, in many cases, not all of the commission reaches the agent’s hand sometimes brokerage companies get involved and cut the agent’s end commission.
#7: Commission Percentage
People also have the misconception that real estate agents gain about 6% commission on each deal. Unfortunately, this is not true, the amount of share varies depending on factors such as the type of property, price, market conditions and split with the brokerage company. One should note that the market for different property type is not the same and the commission earned varies accordingly.
#8: There is Room for Negotiation While Selling
People always assume that pricing of a property (homes, offices) always has room for further negotiations. And that is a big bane for real estate deals. However, this is a common real estate marketing mistake and a myth believed by sellers. Overpricing can lead to bad marketing and receive less interest at the end of the day. Real estate game includes having an offer from the buyer’s side. However overpricing can de-motivate buyers from buying a property.
#9: Getting a License Can Make You Rich Agents
Real estate newcomers often believe that working in this industry can give you fast and easy money without much effort. However, it requires a lot of hard work and time to set up the business. After getting a license, the agent starts building a relationship with clients and managing them in a long run. It takes a significant time to build a client list, contacts with builders and other parties. So, you cannot grow rich overnight, even if you are honing your skills in the real estate business.
#10: Real Estate Agents May Fake Things to Make the Sale
Real estate agents have to abide by a lot of rules and regulations. They have their own code of ethics that ensures all the agents work with integrity. However, most people believe that the agents would do anything to make a sale, which is not completely true. Most of the agents focus on building long-term relationships with their clients. This brings them referral or word of mouth business. They also care for repeat businesses, so agents try to always abide by the best practices in their trade.
Any kind of misunderstanding or lack of knowledge can be dangerous. And it can be hazardous if you are planning on your future career. So, before you finalize your plans on becoming a real estate agent it is essential to decode the myths and see the facts as they are! Real estate sector does not hand you a magic wand with which you can get overnight success. Like all sectors success can only be achieved with hard work and patience. But, real estate business gives you a good solid ground to launch a successful career.