Common Real Estate Myths Debunked
We all hear the myths floating around about real estate agents or the market in general. It’s important to be informed when making decisions relating to real estate and work on fact versus what gets tossed around in conversation. Here are a few commonly heard myths.
Real estate agents are all the same.
There are vast differences in the quality of service agents provide. Ask 20 people around you at work or in your social circles about their agents and you’ll get 20 difference opinions on how they felt about their agents. It is crucial to work with someone you trust is going to be with you through the entire process and who will work hard to help you meet your goals. Real estate agents don’t have the best reputation, so use someone focused on helping you meet your goals, not someone focused on making a sale.
If you price your home far below market value, you can create a bidding war.
The market the last year and a half has been, to say the least, crazy. It has recently taken a breather (this is a good thing in my opinion). But with this wild market, every seller thinks their home will sell above list price and that they’ll have multiple competing offers creating a “bidding war.” While this HAS happened and has some truth to it, its more important to simply price a home at the appropriate market price. This does, of course, vary based on your timeline. You can price it a little higher if you don’t need to sell it overnight, but in general, it is important to price a home at a reasonable market price. If a buyer is financing the purchase, their lender is going to do an appraisal to make sure that they aren’t paying more than the house is worth anyway and if they can’t come to an agreement on who is going to cover the amount of the purchase in excess of what the appraisal says it’s worth, you’ll lose the buyer and end up having to list it again anyway.
Selling a home “For Sale By Owner” can save you lots of money.
The primary reason people put their homes for sale by owner is to save money they would be paying a listing agent. Who can blame them? Selling a home by yourself CAN save you money, but most of the time, these folks break even or make less than what they would have made after paying their listing agent’s commission. Listing agents know how to price a home effectively so it sells quickly. Overpricing leaves a property on the market too long and the property gets a reputation of being a “problem house.” The buyer thinks, “why would a house sit on the market for over a month in THIS market?” Additionally, for sale by owners end up paying fees to lawyers to help them through the complicated paperwork and processes involved in a real estate transaction. The other reality, is that your home will not be marketed and promoted as far and wide as it would be with a solid agent. A good listing agent will market your property on the Multiple Listing Service, on numerous syndicates online, and to other agents in the community and in their company. Find an agent to list your home who aggressively markets your property, who prices it effectively, and who will stay in communication with you continually through the process to make the process easier.
Real estate agents can only show their company’s listings.
This is a very old myth, but not true these days. In fact, most properties on the market are listed on the Multiple Listing Service that allows brokers all around the state to see other brokers’ listings. Brokers offer “co-ops” for agents who bring a buyer to them. The listing agent will split the commission they bring in from the sale with the agent who brings them the buyer. Having an agent is your best bet at finding the right property in a reasonable amount of time.
There are countless other myths out there, but this is my take on a few of them. Make good decisions when engaging in real estate transactions. Consult a professional. Be informed. Research fact-based market realities.