Are you planning to sell or buy a home through a real estate agent, then you need to know some important things about them. Real Estate agents are a great way to find potential buyers for your property. Most of the real estate agents charge around 1-2% of the property value as their brokerage commission. Before you hire someone, negotiate and finalize the brokerage percentage. Also, check his service record by talking to his references. We are listing some of the important things that you need to know about real estate agents.
Price Inflation: Most of the agents increase the price of your house than what you originally quote. Let’s say that your selling price is 50 Lakhs, they increase the price to 52 Lakhs and make a profit on the extra 2 lakhs. So make sure they sell at a price which is mutually acceptable for both you and the agent. Try to look for an agent who is transparent with dealings.
They are Part-Timers: Most of the real estate agents in a city like Chennai are part-timers. They have more than one business running for their livelihood. Doing real estate alone might not be enough to run their families. So when you witness a delay from your agent, you can imagine that they may be occupied with other business too.
Buy house cheaper without an agent: This statement is largely true. In most cases, you can get a house at a much cheaper price if you approach the seller directly than through an agent. You can save 2 types of cost increment namely
- Commission for buying
- Difference in inflated cost by an agent.
They don’t work alone: Majority of real estate agents work in groups. They network regularly and make new contacts with each passing day. So when an agent gets a contract to sell your home, he is going to pick up his phone and dial all his contacts and inform of this new property for sale. This is one of the reasons why real estate agents are smart enough to bring in potential buyers to your home quickly. This also means that they share the commission among them.
They don’t reveal all the facts: As a buyer, you rely on the information provided by your agent. This might not be the best thing to do always. Agents are people who market and sell properties for their livelihood. In some cases, they tend to hide important negative aspects of the property and convey only the positive points of the property in order to close the sale quickly. So don’t blindly trust the agent always and do some background checks on the property.
They don’t have tax implications: Unlike a buyer or seller, most of the real estate agents don’t pay income tax. Let’s assume your property is sold by him for Rs.50 Lakhs and you pay him 2% as commission (i.e.Rs.1 Lakh). It means he gets to keep the full money and he doesn’t pay either income or service tax on them.
All the above points hold true for most of the agents in the real estate industry. Whenever you decide to chose the agent to make sure he has a good track record and is open for negotiation.