Whether you have been through the process of renting, buying, and selling a property or not, I’m sure you had many preconceived notions about what it was supposed to be like. Working with a real estate agent can help to dispel myths about the real estate process, but we’re here to help as well and compiled a list shedding light on the top five myths for home buyers and sellers.
Top Myths for Home Buyers:
You have to put 20% down on the property.
You can let out a big sigh of relief on this one. Though a 20% down payment can help you decrease your payments and secure a better interest rate, many traditional mortgages are accepted with as little as a 5-8% down. If you’re a first time home buyer there are even better incentives and first time buyer programs that can drop the down payment requirement as low as 3%. Shop around and make sure you know your options.
You can get by without a professional inspection.
Think again. At the time, this may seem like just another added expense, but you need to look beyond the present to think about what it could cost if something bad is discovered after the closing. There are a lot of things that could go wrong in a home that aren’t visible to the naked eye. Check out the American Society of Home Inspectors. You can get a list of qualified home inspectors in your area. Be sure to review their written report and pictures as well.
You have to visit at least twenty homes to find “the one”.
Most buyers simply accept the fact that they’ll need to visit twenty or more properties in person to truly know an area and what they want or don’t want. While that may be true for some, by the time you’ve finished all of those tours you’ve wasted hours looking at houses that you had no business even walking into. Investigate alternative touring options to help you narrow your search, then go visit your top 5 or top 10 in person. Pictures not cutting it? What about video clips? That not sufficient either? Well there are now some great live video options to help you tour as well. Ask your agent…they’re there for you.
Location, location, location.
When it comes to location, you hear most often that people are looking for homes in a well-established community with a good school district, low crime, and an easy commute to/from work. This is great, but there are many other location-based items to consider as well: are the homes appreciating or are they getting a bit older or run down; are new businesses, buildings, and neighborhoods popping up or is most new development happening elsewhere; are jobs on the rise in that area; etc. Though security and comfort in tried and true areas is great, so is the appreciation that comes from the up-and-coming.
Trust everything a real estate advertisement says.
Listing agents are tasked with one main thing: sell their client’s property. What’s a major part of that selling process? Marketing. Listing agents can be sly, so make sure to read in between the lines and not just accept everything at face value. For example, “cozy” most likely means small and “as is” likely means you’ve got some work to do after closing. If there are a lot of exclamation points in the listing, the agent was either hyped up on caffeine or they’re trying to create false excitement. If something sounds too good to be true, it probably is. Ever questioned what makes something a “great starter home”?
Top Myths for Home Sellers:
Listing with an agent is the last step.
The right time to contact a real estate agent isn’t when you are finally ready to get your house listed and move forward with selling, it’s when you first think about selling your house. Whether it’s six or twelve months before you actually sell, sooner is better. An experienced agent will be able to advise you on what people are currently buying, what renovations or changes can be made to attract more buyers, or suggest a better time of year to sell based on your area. Thinking about contacting a contractor to remodel the kitchen before selling? Consult a real estate agent too.
List your home and they will come.
People don’t know what they don’t know. If you don’t market your listing in creative ways that people will find, then it most likely won’t sell very quickly. Recent trends show that the number of buyers who actually purchase a home from open houses is decreasing. 92% of buyers use the Internet to search for real estate, so it’s most important that your marketing plan caters to that online audience. Syndicate your listing on multiple sites, take professional photos, create virtual tours, and have a plan for capturing online leads.
Major renovations = major money.
This ties back into tip number 1. Huge renovations cost more than you think and won’t always pay off in the end. Ask anyone and they’ll likely tell you to invest money in the kitchen and bathrooms. Research actually shows that the best place to spend money is on the outside and main entryway of a home. Your goal when selling is to a) get people in the house and b) make a lasting impression once they’re in. Before going big on a new kitchen or bath, check with your agent to know what’s selling in your area, and check out these easy weekend projects to help increase your curb appeal.
No need for staging, just keep it clean.
Not interested in spending the money to stage your home? Some people may not need to if they have an eye for decorating and their furnishings already appeal to the buyers they’re looking to attract. If that’s not you though, simply cleaning your place may not be enough. Staging is about making your home appeal to a broad range of tastes and skillfully highlighting your home’s best features while understating its less attractive areas. Have a small bedroom? Get rid of the queen bed and replace it with a twin to make the room look bigger. Is the living room dark? Remove the blinds to let in more natural light.
Price the house high to allow for negotiation.
Negotiation 101: start high to end up where you want. That’s great, but the most important thing is to get buyers inside your house. Homes that are overpriced scare away potential buyers because they’ll either expect no movement from you or a heavy negotiation…neither of which is enticing. If you price too high up front and your house just sits on the market, it hurts your sale. Potential buyers can see how many days your house has been listed and will start to make assumptions about something being wrong if they see 100 or 200 days on the market. Be smart and listen to your listing agent to price competitively for your market. They want the highest sale price for you as well.
These are clearly only a few of the many preconceived notions that people have about real estate. Helping people correct these misconceptions is something that can benefit everyone. The next time your spouse suggests remodeling the kitchen, tell them you’ll paint the front door instead.
Until next time… keep it real!
What are some common misconceptions you’ve encountered while on the house hunt or selling your home? We want to hear about it! Comment below or email us at firstname.lastname@example.org. Keep checking back to our Keepin’ It Real blog for more tips, tricks, and the latest on the real estate market.