For anyone who’s interested in learning more about real estate, there is no shortage of articles, books, videos, and courses that can shed light on the subject. Unfortunately, there’s also no shortage of misinformation out there. If you’re in the process of buying or selling a property, you’ll probably hear one of these real estate myths.
Selling your house yourself will save you money.
A lot of people underestimate the work that real estate agents put into selling a property and decide that they can do it on their own. One of the biggest problems that occurs with FSBO (for sale by owner) is that all too often a seller will overvalue their home and it will stay on the market for too long. What can often occur next is that the homeowners will overcorrect and then price the property way too low. What FSBO homeowners don’t realize is that agents have access to a database of potential buyers and they can get your home seen by the right people. Also, real estate agents negotiate for a living and are better equipped at getting the most for your property. The numbers don’t lie: in 2020, the average home sold by an agent went for $295,000, while FSBO homes sold for an average of $217,900.
If you’ve already bought or sold a home previously, you can do it yourself.
Having bought or sold a house previously, especially if a real estate agent was handling the transaction, does not make you an expert. If you bought a house in 2009, would that prepare you for buying a place in 2021? A lot of things can change in just a few years. Also, the submarket can change quickly. This is especially important if you’re buying in a place you’re not totally familiar with.
Price your home high and negotiate down.
While starting your negotiation with an inflated price might be a good strategy in some situations, in real estate, you want to start at a fair and reasonable price. There are two major disadvantages of setting your price too high. First, buyers who might want to buy your house at its real market value would be dissuaded from considering it if it’s outside of their range. Also, in the majority of home purchases there will be an appraisal, at which point the buyer will learn how much the house is actually worth. If it’s significantly different from the agreed upon price, the buyer might opt to pull out.
Lowball offers are a good negotiating tactic.
Even in a buyers’ market, offering a ridiculously low amount is not going to work in your favor. If there is just one offer that’s higher than yours, which is likely, the seller has zero incentive to negotiate with you. Instead, the seller will just move on.
Any upgrades will pay for themselves when it’s time to sell.
Thanks to shows about home remodeling and house flipping, homeowners have become convinced that any upgrades will translate into a higher offer. The fact is, not all upgrades are created equally. While it’s true that certain changes will raise the asking price of a home, you need to be strategic about which changes will actually enhance your bottom line. For example, putting an expensive backsplash in your kitchen won’t motivate a buyer who plans on gutting the entire kitchen. If you don’t know which changes to make, you might want to ask a real estate agent which upgrades will raise the value of your property.
Real estate agents just want to close a deal no matter what.
Buying or selling a property can be an emotional process, and sometimes people take that out on their real estate agent. Sometimes homeowners have unrealistically high expectations for what their property can sell for. When the offers that come in are lower, the real estate agent can receive unfair blame. Despite the perception that real estate agents just want to get their commission and move on, real estate is a relationship business. Smart real estate agents know that it’s in their best interest to make sure that their clients are happy. They want to receive positive word of mouth and also leave the door open to possibly help you buy your next house.
When people hear that you’re in the process of buying or selling a property, they often can’t wait to share about their experiences with real estate. While some of your friends may know what they’re talking about, don’t be afraid to double check what they’re telling you. As we stated above, what was true a few years ago may have changed completely today.
