#myth #realestate #realestateagent
Deerwood Realty and Friends Podcast
I saw this article on Yahoo, I’ve linked to it in the description below, and I just wanted to go over some of the high points and see if I agree with it. 2nd half today
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Thoughts/questions:
1. Myth: You Don’t Need a Home Inspection Is this a myth? You should advocate for a home inspection. Even if you buy a property as is, it’s good to get a second set of eyes on a property. But, a home inspection is not a REQUIREMENT to purchase a home, and so the myth could be considered true.
2. Myth: You Should List Your Home With a ‘Super Agent’ So, what is a super agent? A super agent is usually defined by having an eye popping number of transactions…and that’s where things get silly. If you work for a broker, they can put every transaction you make onto their record. And, they can have as many agents as they want, so 20 agents giving credit to each home they’ve sold put on your record will make you look pretty super. My opinion is that you should list with someone you feel comfortable working with and just leave it at that.
3. Myth: Remove All Holiday Decorations Before Listing Your Home This is a myth. No question. New home buyers are pretty understanding when it comes to holiday decorations. After all, they are probably going back to where they live and have decorations up as well. If you are celebrating Christmas, for example, you really don’t need to take down the tree or anything like that. One thing you might want to do however, is keep the gifts in a safe place. I’m not saying someone walking through will take them, but it’s better to just avoid the possibility of it happening altogether.
#4. Myth: Always Redecorate in Neutral Tones I agree with this, so it’s not a myth. There is nothing worse than seeing interior walls with some color that is bold and individual to the seller. There’s this awful seafoam/blue color that I see that makes a house look awful. Also, with those bold colors, there’s a possibility that when you go to change the paint colors, it will need at least 2, maybe 3 coats to change them back adding additional expense. If you are looking to sell, color isn’t bad, but stay neutral. Remember, you are no longer living in the house and you want it to look good for potential buyers
#5. Myth: Set the List Price Above Comparables To Build in Bargaining Room I think this is a myth. When you come to market at the right price, good things happen. If you go too high, the majority of buyers aren’t going to bother with offering a comparable price because they have no idea that you are looking to get a lower price than your asking price. The longer the house sits on the market, the less chance you end up getting your asking price.
#6. Myth: Setting a Low Price Means You’ll Make Less Money This pricing strategy makes sense in some markets, and little sense in others. Right now, the market is very hot for sellers. Your listing strategy should be as straightforward as possible. When you set the asking price artificially low in this market, you will get multiple offers, but you would have gotten multiple offers at the right asking price as well, so not sure what the point would be. IF your house is trash, it’s not going to sell for a high number just because you put one it, and you have a much better chance of selling if you do set a lower price….that could entice buyers to take a chance on a remodeling the kitchen or bathrooms and making the house their own.
#7. Myth: Negotiate the Realtor’s Commission To Net More Profit This is a terrible idea and a stupid myth. When you try to cut the commission of the buyer agent, it just makes people not want to show your property. Conversely, adding to the commission might bring more buyers. I will show any house. I also have a buyer’s agency commission agreement in place that says I get x for a sale. If the buyer chooses to purchase a house below what we have agreed to, the buyer is on the hook for that difference. They know this going in. The buyer would rather not pay the commission, and so your home tends to get shown less. When you cut the commission, you are also signaling to the buyers that you might be trouble during the transaction as well, as if you have to short your agent, what else will you be doing? Failing to disclose repairs, refusing to negotiate terms, etc. Not a great plan.
#8. Myth: Professionally Staging a Home Is Necessary for a Quick Sale Definitely a myth. There are some homes where staging will really benefit the seller in getting a higher sale price…these homes are usually empty to start with. If your home is in great shape, updated, and priced right, you shouldn’t have any problem getting multiple offers in the current market. When the market changes, the houses that are in the best shape are the same as when the market is good, so there’s no issue there either. This isn’t to say that staging isn’t of benefit, but it’s specific to individual situations.
#9. Myth: If Your Home Isn’t in Great Condition, No One Will Buy It Definitely a myth. This, I think, is the biggest irrational fear of home sellers. The idea that no one will buy your house. I’ve been doing this for 15 years, and every house in the mls has sold within this time. There’s always a market for investors if you can’t get a retail buyer. The key is realistic pricing. If your house is dated, you aren’t getting the same price as a house that is. If your house has a major issue, disclose it and move on. Pricing strategy is key.
#10. Myth: List Your Home With a Neighborhood Expert I think this is a myth. But, let me explain. I know certain agents who focus on specific neighborhoods and they do fine with sales. I also see agents who have never been in a neighborhood get more than any neighborhood expert. That shouldn’t happen if the expert is truly an expert, right? There are two things I think that happen to a neighborhood expert.
1. They concentrate on too small of an area, and they don’t realize that other neighborhoods are causing price increases or decreases through the entire market.
2. They get complacent. They are already the expert in their mind, so why bother keeping up?
The “neighborhood expert” is really a strong way for a real estate agent to market themselves, however. If you are looking for an agent, and they bill themselves as the neighborhood expert, how could you quibble with that? You can see why this myth is proliferated…its coming from the agents.
#11. Myth: Open Houses Are a Waste of Time I agree…this is a myth. I know of 4 houses I sold because of an open house, and I can’t even count the number of people who were considering writing an offer at an initial showing that use the open house as a second opportunity to tour the property. Now, holding open houses weekend after weekend is a waste of time. Also, in a really strong market, where there is already a ton of foot traffic, it seems to make little sense to have an open house. But that’s going to be on a case by case basis. There is much debate amongst agents on the issue of open houses. I’ve put forward my thoughts on the issue and other agents are free to disagree.
#12. Myth: You’ll Recoup Remodeling and Home Improvement Costs When You Sell This is definitely a myth, and it’s one that can be downright dangerous financially for home sellers. Here’s what I often see. Someone is in a neighborhood where the average house sells for 300,000. They remodel the house, change out the kitchen, the bathrooms, and all new flooring. Maybe they add a room. They bought the house for 300, added over 100k to the house, so it should bring 400 thousand, right? Doesn’t work that way. I don’t know why, but I just know it doesn’t. Pennies on the dollar on your improvements usually. But, what happens if they actually bought the house for 220 thousand and put the same 100,000 into it? It wouldn’t be unreasonable to assume they could get 320 for the house in that scenario. The point here is that it matters at what price you buy, not what money you put into it.
13. Myth: The Highest Price Is Always the Best Offer This is definitely a myth. Your best offer is going to be the offer that has the best chance of closing. Anyone can write the highest priced offer. But, what happens when the house doesn’t appraise? Do the buyers have enough cash to cover the appraisal gap? What happens when 1 offer is with a mortgage and the other offer, just 1,000 less is an all cash offer? What if the highest price offer has many contingencies or hoops the seller might have to jump through before they sell the home? The best combination of highest asking price, fewest contingencies and strength of buyer financial position is the best offer for the seller, without question.
14. Myth: Wait Until the Property Is Under Contract for a Home Inspection I don’t think this is a myth. I think this is a competent strategy. Here’s why.
a. When an inspector goes through your house before it is listed for sale, everything they find is something that would have to be disclosed on a listing. Why disclose things that you were previously unaware of before you list your property for sale? Makes no sense to me.
b. Buyer is going to want to perform their own inspections. This is going to cause a disconnect between your inspector and the buyer inspector. The buyers don’t trust your inspector, so now you end up arguing every point twice, once with your inspector and again with the buyer inspector. Let’s say that your inspector says that the sewer lateral is fine…just needs a cleaning, and let’s say the buyer has an inspection done and that inspector indicates that there is a crack that must be replaced. Who are you going to believe? How is this going to help you sell your house?
The only concession I would make is if I was listing a house where I knew there were severe issues and I wanted to help ease the mind of the buyers by being completely transparent with them. Then I would provide a copy of the inspection report to the sellers online or at least at the house. That would be the only situation where I would get a pre-sale inspection.
15. Myth: Winter Is a Bad Time To Sell It can be, but not always…much more specific to the situation. As a buyer’s agent, I love to show houses in the winter months because I feel like there is less competition for houses. However, there is also less good inventory coming to market so anything that does come up usually still goes under contract relatively quickly. “Fringe” properties…the estate houses, the neglect houses, these types of houses may not bring as good of a price during the winter, but those sellers are usually motivated to get rid of the property by other things than the highest price. If you do have a strong house to sell, you will be fine listing it in the winter.
16. Myth: Save Money by Marketing Your Home as a ‘For Sale by Owner’ I am extremely biased, but I do think this is a myth. I would guess that thousands of people try this in my market every year and within a week, they are listing the house with an agent. Why? Well, home buyers are usually working with an agent already, and the property just doesn’t seem to get the exposure it would have otherwise gotten when it isn’t on the MLS. Now, Zillow has made it easier to get for sale by owners onto the homebuyer landscape, no doubt…but you are still likely going to be working with a buyer’s agent in the transaction. And they have the majority of the buyers. If you want limited exposure to your property, sell it for sale by owner. If you want your property marketed to hordes of buyers, list with an agent.
Sources: https://finance.yahoo.com/news/common-real-estate-myths-know-215623449.html
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