Buying or selling a home is easily one of the biggest financial decisions you’ll make, and most of us don’t do that every day. Unless your directly involved with the real estate industry, most don’t truly know how the world of real estate works from A to Z. Here are some common real estate myths (debunked) that could help you save time and money when it comes time to buy or sell a home.
1. Set your home price higher than what you expect to get.
True… To a certain extent. If you want to list your home for a competitive price, you’ve got the right idea. But listing your home too high could potentially net you a lower price, as well as costing you time and money.
When your home sits on the market for an extensive amount of time (even if you eventually lower your asking price) people will begin to ask questions like, “whats wrong with the property?”, “why did they drop the price?”, “will they keep decreasing the price?,” “could we give them a low-ball offer?”, etc. You do not want this to happen.
You and your real estate agent’s goal should be to get the best and highest price for your home. Take your emotions out of the home sale and consult your real estate professional to choose a competitive price that reflects current market values and can potentially bring in multiple offers.
2. The market will only go up.
In recent years, homebuyers and sellers have experienced a time of increasing home values, then a sharp decline during the economic downturn and now another period of increasing values.
The typical real estate cycle is usually an 18-year period that experiences recovery, expansion, hyper-supply and recession. There’s no way to know what the real estate market will do but using this cycle and analyzing the past, we can make educated assumptions about what’s next for real estate.
With that said, there’s no way to know if the market will go up tomorrow, next month or in the next year. Its obviously best to sell your home when its a “seller’s market” and best to buy a home during a “buyer’s market.” However, not all of us are able to hope, plan and wait it out, so whenever it makes sense for you to buy or sell a home, pull the trigger and seize that market’s opportunity.
3. Selling a home “For Sale By Owner” saves lots of money.
The main reason sellers believe that selling their home “For Sale By Owner” (FSBO) is a good idea is because it will save them lots of money. This is a common real estate myth. Many sellers who attempt to sell their home FSBO believe that selling homes is easy. It would be great if selling homes was as simple as putting a for-sale sign in the front yard of a home, input the home into the MLS and watch it sell, but it is not.
FSBO’s often will end up losing money by not hiring a professional real estate agent and gain the risk of facing legal liabilities. A real estate agent is a professional who is trained to negotiate pricing, terms, contracts, etc., and equipped with the means and knowledge to efficiently market your home.
Think of it like a theatrical production. You show up to the theater, watch it, enjoy it, the curtain drops, you leave and its over. What you don’t see is all the time, sweat, tears, frustration, preparation and ultimately behind-the-scenes work that the director and crew puts it and executes. If you’re not ready to be the director of a play, then your not ready to sell your home FSBO.
4. A home doesn’t need to be prepared for sale.
Okay, so you want to sell your home “AS IS” or do minimal work to it. Great! However, that doesn’t mean your home is going to appeal to buyers walking through if they see piles personal belongings and they’re worried about stepping on the current owner’s shoes (literally). Clearing out your home and preparing it for sale can help buyers envision the home as an opportunity and see more possibilities with it. The difference this can make could be in the thousands (yes, $ signs) for you. Hire a cleaning, organizing or staging service to make your life easier, and just get it done.
5. All properties are listed in the Multiple Listing Service (MLS).
You and your agent must choose to let the listings show up online, and most properties do end up on the web.
When signing your listing agreement make sure to read the contract carefully or ask your agent if your property will be on the Multiple Listing Service (MLS).
For some high-profile clients or celebrities, choosing to opt out of the MLS is a big factor, due to privacy concerns. However, making your home available on the MLS means you’ll gain more traction, interest and potential buyers.
* Have any real estate questions? I would love to hear from you! Give me a shout via email or cell: firstname.lastname@example.org or 805.550.5344.