Myths of Selling a Home
Whether or not you’re new to the world of Real Estate, you’ve surely been exposed to some of the common rumors of the industry. Maybe it was from great uncle Ned – who only had the best of intentions, or maybe it’s the blurred reality of one of the many related TV shows on the air. No matter where they came from there are some common real estate myths for home sellers that need to be busted ASAP!
Myth #1 Price your house high to leave room for negotiations.
Sounds logical, right? Not so much. You see pricing a home too high is going to cause you some issues. I’ve seen the following scenario play out quite frequently when owners list too high.
- You get very little traffic when you first list – today’s educated buyers know your home is overpriced. This turns them off, or they might not even see it in their search results.
- You wait 1 month, 2 months, 3 months and finally realize you are not going to sell at this price.
- You lower your price to a better number where it should have been in the first place, so now it should sell, right?
- Maybe.. But now that you’ve been on the market for so long it becomes “shop-worn”, people start to wonder “what’s wrong with it?” and avoid it.
- You become frustrated, lower your price even more to entice someone, ANYONE to make an offer, PLEASE!!
- You end up feeling desperate and you sell under market value to be done with it.
Yes, there are times when pricing high and gauging the market is necessary although it’s not the norm. Pricing close to market value is going to yield you the best price, target the best buyers, and sell the house the quickest. Listen to your agent, and get multiple opinions on pricing strategy for your property if necessary. Different price ranges, areas, conditions should be approached with a different pricing strategy. So this isn’t a one size fits all rule, but this is a one size fits most!
In Today’s market, its possible you may yield even higher profits from your sale by pricing slightly UNDER market value, and allow the buyers to drool over the price and start bidding it up. Don’t do this unless your agent is 100% sure of the demand for the property!
Myth #2 Selling a home without an agent will save lots of money.
Sounds simple enough, if I don’t pay a Realtor, I’ll net more money, right? Weeeeell, probably not. You see there are two types of people who are looking to buy homes not listed with an agent.
- Investors who are looking to buy below market value
- Home buyers who think you will sell for less if there are no agents involved.
In other words, anyone looking for a home “off market” is looking to score a great deal. When people go to buy the biggest investment of their life, they want to know everything is on the “up and up”. They have more faith and trust in buying a home from a trusted brokerage, vs a homeowner directly. They see value, accountability, and a legitimacy factor that’s missing from the house next door with a 4$ “For Sale By Owner” sign in the ground.
On the flip side, an agent can bring you a higher sales price which offset the costs they charge. 95% of the time you will walk away with more than if you sold by yourself for this reason alone. Besides just the sales price, there are a lot of other factors that go into your bottom line -concessions, home warranties, appraisals, inspections, etc. If you are up against a buyer who has a realtor, you’re most likely not going to win that battle.
But it’s not only about the money up front here. For Sale By Owners typically have little knowledge of the rules and requirements in place regarding the sale of real property. Owners take on exponentially more legal risk by selling their own property. This oversight could easily result in unexpected legal fees or lawsuits, ouch! Statistically speaking around 90% of For Sale By Owners are not be able to sell on their own, and end up hiring a professional.
Myth #3 Spring is the best time to sell a home
Let’s give credit where credit is due – Spring season has more home sales than any other season year after year. But does that make it the BEST time of year to sell a property? It depends…
There are more buyers out looking in the spring time, this is true. However, there are also a lot more homes for sale, so is there any shift in supply vs demand to make it a “better” time? In fact in Arizona, we are a year round market. Unlike some snowy markets who shut down in the winter, the climate in Phoenix actually makes home hunting in the winter much more pleasant than in the spring or summer!
But why try to move in the spring when the kids are still in school and studying for finals? Ah yes, it’s the families that like to move during the Arizona summers. While it’s hot, yes, it just makes sense to take time off to get a move done. And the fall season is no worse. In fact, fall is the second busiest season after spring in terms of volume of sales. Something about the falling of the temperatures, combined with idea of getting into a new home before the holidays seems to bring out the home buyers in Phoenix year after year.
Myth #4 Agents Get Kickbacks from Lenders / Title Companies
Real Estate Agents cannot receive kickbacks, compensation, or fees of any kind by referring business to these companies. It’s a cut and dry violation of RESPA (Real Estate Settlement Procedures Act) and can results in hefty fines and loss of one’s Real Estate License. That’s not a risk that’s worth taking!
The one and only reason we as agents refer vendors is because we trust them and we know they will do a good job. When I refer my clients to a lender, it’s because I know they will get the loan done timely and properly. Believe me when I say not all lenders are created equal! Of course you can always shop around for vendors you want to use, and you should never feel pressured to use a particular one. They are only recommended to you because we know they will do a good job for you.