Yes, the seller will be the one making the final decision as to the price the home is offered at, however, contrary to the home selling myth, the actual selling price will be subject to market conditions, the property’s location, and its size!
Many home sellers might be of the impression that they’re sitting on a gold mine, because “all of their friends and family have said what an incredible value the home offers”.
Whereas they all have the best interest at heart for the home seller, with all due respect, they won’t be the ones buying it, nor are they now suddenly all real estate pricing experts.
And, the home seller is probably least of all suitable for pricing his own property, as he’s too emotionally involved and will often hope to get more money out of it than what it’s worth!
In order to arrive at a successful sale, you don’t want too much of a variation between the initial asking price and final selling price!
This leads us to Myth #2 & #3.
No! You will comparison shop, where you have a thorough look at all the comparable properties on the market in any particular neighbourhood, and will try to find out how much bang for your buck you get!
And if it turns out that the home is overpriced versus what else is for sale, that property will not make it onto that buyer’s short list and plainly be ignored for potential viewing consideration.
Yet, coming onto the market with an overpriced property will only result in it getting stale. Period.
My colleague once told me, unlike wine that gets better over time, homes are like freshly baked bread. Awesome to consume the first few days, but as time goes, less and less pleasant!
Exactly how the market will react once the property has been advertised longer than average!
Are those the reactions you as a home seller would like to hear from potential buyers?! No way!
Believing the home selling myth where overpricing a property will result in higher prices, will only result in actually seeing LOWER prices!
The basic premise of negotiating is having two parties present to hopefully arrive at a mutually agreeable outcome.
Guess what?
You’re going to seriously struggle to get a (serious) 2nd party to that negotiation table!
By actually believing this home selling myth that overpricing a property is meant to give an extra cushion during negotiations, you will have willingly pushed away any serious buyers.
Why would any home buyer in their right mind be offering anything on a clearly overpriced property, knowing they can put in offers on comparable homes which are already lower in asking price to begin with?!
Home buyers are more educated and attune to market conditions than ever before!
They’re more than likely to completely walk away from it altogether, rather than trying to negotiate lower!
You will have accomplished the exact opposite by chasing them away instead of attracting them.
Home Selling Myth #4 – The longer the marketing time, the better the offers
“Wow! If the agent is able to bring me an offer within a few days of marketing my house, can you imagine how high the offer will be in a month’s time?!”
Or,
“We’re not in a hurry. A better offer will come along. We only need that one buyer.”
Does any of this sound familiar?
The reality of the matter is that the longer a property sits on the market, the more likely lower offers will come in!
Similarly as mentioned in the previous home selling myth, interested home buyers will start asking rather undesirable questions, such as what’s wrong with the house that it hasn’t sold yet.
In other words, time on the market is NOT the home seller’s best friend!
Yet, isn’t that completely the opposite of what this home selling myth said we supposedly do have on our side?
Home Selling Myth #5 – A quick offer means the property’s priced too low
“Getting an offer this soon only tells me that we priced our property too low! Does this agent think we’re going to give our home away?!”
While at first, one can see why this home seller would be upset, it will quickly become obvious that there’s a very good reason as to why offers came in that quickly!
‘Eager buyers’ (and their buyer agent representatives) have been scanning the available properties on the market non-stop for the past weeks/months until something comes along that suits their needs best.
They’ve pretty much seen everything that’s for sale in that particular area already, so when something new comes along, they’ll be the first to inquire and request a viewing!
Isn’t that what you as a home buyer did when you were looking for your current property?
With an effective marketing plane in place by the real estate agent, a correctly-priced home will immediately draw the attention of potential home buyers and depending on the market inventory available, offers can potentially be forthcoming within hours!
Home Selling Myth #6 – Real estate agents don’t purposely overprice properties
“The real estate agent who gives the highest listing price believes in my property the most!”
Or,
“After all, the longer it takes the real estate agent to sell the home, the longer it’ll be before he gets paid, right?”
Well, we all know that the first 1-3 weeks of marketing out of the gate are the most crucial when selling a property!
Let’s not forget that you only have one chance to make a first impression.
Real estate agents in dire need of new business will start pricing properties higher during their interviews than what they actually believe they'll sell for simply in order to secure the listing!
Shocking? Sure! But unfortunately, it happens all the time!
It’s often referred to as dirty secret when “agents buy the listing”!
Whereas it might be tempting to go with the agent providing the highest listing price, not only do you need to make sure to interview a number of agents to get a better idea of the ‘true market price‘, you also need to ask for proof by means of comparable market analysis report!
That’ll be the only way to avoid falling victim to this ‘popular’ home selling myth!
Good luck to the agent who’s been trying to convince you of those (overpriced) levels to now come up with comparable properties to back up his fables!
Home Selling Myth #7 – The real estate agent with the lowest commission will net the seller more
Along the lines of the previous home selling myth, choosing the right Realtor will be positively correlated to a successful marketing campaign and the ensuing home sale!
If the going commission rate is 5%, why would any agent be willing to work for a 3% mandate?
Will the home seller score out of this lower commission cost?
Perhaps.
However, it might come at a cost elsewhere!
Let’s think of the following few points:
- If the agent was so quick in willing to work at a discounted commission rate in order to get the business, imagine how quick he’ll settle on a sale price during negotiations to get a deal!
- Less commission for the agent will very likely translate in a lower marketing budget to get your property advertised. Meanwhile, a full commission agent will be able to engage more marketing tools in getting the property exposed to an audience as wide as possible.
Both will very likely lead to a lower sale price for you, the home seller! It might be tempting to follow the advice of this home selling myth, however, be warned that an initial saving in a few commission percentage points might end up costing you +10% in your home sale price!
Penny wise and dollar foolish?
Home Selling Myth #8 – The house sells itself
This is a gorgeous house, so I’m sure once those interested buyers start viewing it, we’ll be getting offers in no time. The house pretty much sells itself!”
Even though anyone hearing that last sentence might nod their head, we all realize that it takes a heck of a lot more than just announcing to the world that a particular property is for sale!
Isn’t the job of the real estate agent to market and highlight the features of a home and neighborhood? To advertise it and cast a wide net to bring potential buyers to the table? To negotiate and get top dollar for your home?
Is it not a buyer agent's job to help the interested buyer make a decision which is in that client’s best interest, all within set parameters put forward by that client?
Wants vs. needs?
Features vs. benefits?
Budget vs. pie in the sky?
Dream home vs. existing inventory?
Objective advice vs. emotional handling?
Thinking out of the box vs. thinking black-and-white?
Going the emotional route by describing the potential lifestyle, decorating opportunities, pointing out the gorgeous views, great entertainment areas etc will definitely assist the interested buyer in arriving at a decision for himself.
The agent will be the one trying to create that new lifestyle for the client and build an emotional connection to the house! It doesn't happen on its own.
Good real estate agents don’t manipulate their clients, but rather “set them straight” when they deviate from the path towards home ownership.
And if that means that home ownership itself isn’t currently a match for that client for whatever reason, so be it!
But is a house selling itself?
No, not really!
Home Selling Myth #9 – Selling a home “For Sale By Owner” saves money
Why wouldn’t anyone want to sell their own home? You’ll save tons of money, right?
Not quite!
There’s a lot more to think about than just taking some nice pictures, putting them online, and having a ‘For Sale‘ sign up!
Sure, one might arrive at a market-related listing price by cheekily interviewing a couple real estate agents, but that’s just the beginning!
Here are a number of reasons why this home selling myth of saving money by going FSBO will fall flat on its face:
- Who will be marketing the property to get the maximum exposure?
- Who will be screening the potential home buyers?
- Who will be handling the incoming inquiries throughout the working day?
- Who will be assisting with the buyer viewings throughout the working day?
- Who will be negotiating, filling out of the contract and covering its many contingencies?
- Who will be dealing with home inspection findings?
Professional real estate agents do the above (and more!) all day, every day!
Did you know that recent NAR studies have shown that the average house sold by the homeowner himself will fetch about 15-20% LESS than what the agent would have managed to get?
One of my all-time favorite lines is the following:
If you think it’s expensive to hire a professional, wait until you hire an amateur!
Why do you think barely 10% of homes sales each year are sold by its owners?
Home Selling Myth #10 – Home improvements pay for themselves
“Whatever money spent on home improvements will definitely increase the value of the house by as much or more, right?”
Well, sorry to burst your bubble, but according to Remodeling magazine’s 2016 Remodeling Cost vs. Value Report, you’ll only recoup an average of 64% of the cost of the renovations made to the house!
This most recent report actually points out that there’s only one home improvement which will result in you getting more money than it cost you!
So, unless you have no intentions of selling your property anytime soon, be very careful before you start with those big home improvement projects, as they may not bear the ROI fruits you had hoped for!
Next time you hear your neighbour talking about his next exciting “home investment“, perhaps you may want to bring up this home selling myth!
Home Selling Myth #11 – A home doesn’t need to be prepped for sale
While there are home buyers out there who are looking for a fixer-upper or something in need of some renovations, the reality is that the majority of buyers prefer to buy a home that’s move-in ready!
Even if the home seller is aware of certain aspects that need some attention, it would be in his interest to actually attend to prior to listing the property for the following couple of reasons:
- Increase the pool of interested buyers by making it move-in ready;
- Make the property more presentable to visiting home buyers;
- Beneficial to overall marketing by indicating that it’s been recently renovated;
- Strengthen the position of negotiation for the home seller;
- And get an offer accepted quicker!
Bottom line: the home seller cannot afford to give this a miss!
Sure, one could get away by believing this home selling myth, assuming of course that the home seller doesn’t mind forfeiting thousands for something which doesn’t have to cost a lot of money!
It’s amazing to see how a general cleaning, some minor paint jobs, basic staging, and perhaps a pre-listing inspection can positively affect the home sale result!
Bottom line - Staging sells! I always bring a professional home staging company in for a consultation and what comes out of this consultation often translates to a home selling more quickly and for more money than it otherwise would have.
Closing thoughts
By now, we know that home selling myths can be found everywhere!
They’re all around us and are almost haunting us!
Whereas many home sellers may have regarded these myths as the truth before reading this article, it was my intention that these home selling myths have now been debunked once and for all!
Knowing the facts will hopefully give home sellers enough ammunition to avoid the pitfalls caused by these myths and arrive at a successful home sale!