When thinking about myths, the mind usually goes to a fanciful place, perhaps involving magical creatures, secret conspiracies, or creepy urban legends…
The concept of a myth isn’t usually applied to the world of real estate. But, believe it or not, the industry is riddled with misconceptions, or myths, that can seriously hurt your chances of buying or selling your home.
These myths are everywhere. They can take the form of friendly, but misconstrued, real estate advice from loved ones; articles online filled with conjecture instead of facts; or simply one person’s experience selling their house stated as universal real estate truth.
Deciphering good real estate information from the bad can be tricky. That’s why we want to help first-time home buyers & sellers debunk the most harmful real estate myths with some tips to consider. Whether you’re just now joining the realty game or have been buying and selling properties for years, it’s always important to be aware of these really fake, real estate fables:
10 Real Estate Myths:
#1: The Desperate Real Estate Agent Myth
Let’s be honest, we all have misconceptions about real estate agents. With the obscene amount of real estate-based entertainment fodder out there, from property “gurus” to home buying reality TV shows, there is certainly a skewed perception of real estate agents out there – mainly that they will say or do anything for a sale.
While of course there are agents like that, who wear that cloying smile and plastered on charm, many real estate agents aren’t simply hungry for commissions.
Not only are real estate agents held to a strict code of ethics, much of their business comes from good relationships with their clients. When buying or selling a home, most people find agents based on referral or word of mouth, so if a real estate agent is unscrupulous or uncaring, they will have difficulty finding and retaining clients.
#2: The Sell It “As Is” Myth
In spite of all the house flipping TV shows taking over basic cable these days, there’s still a myth in the real estate world, that you don’t need to prep your house for sale. After all, it can be a costly endeavor and most buyers end up redecorating or changing most of the home.
Readying your home for sale is always a good idea. Most people are looking for a place that’s move-in ready. How your home comes across, from the start, can make a huge difference on the price and how long it remains on the market.
The first month your house is on the market is the most important, and seals its reputation to buyers. Leaving it sitting on the market too long can negatively brand a house, making it harder to sell. So, take the time to slap on a fresh coat of paint, make those minor improvements, and stage your house for sale.
#3: The Steady Real Estate Market Myth
Real estate investment is always a good idea, however assuming real estate trends are stable is a delusion. Though prices in your area may seem steady, it’s foolish to believe things will stay that way for better or for worse.
There are countless factors that impact the housing market, from recessions to supply and demand. Before investing in real estate, do your research and gain a better understanding of the market trends.
It’s best to always assume things can change at the drop of a hat. So, stay wise!
#4: The Lots of Money to Make Money Myth
People tend to think they need wads of cash on hand before making that first real estate investment. We’ve all heard the old saying “It takes money to make money”. That first step can be daunting, but it’s a mistake to believe you need to drop a ton of money just to get in the game.
You don’t want that first investment to bankrupt you. With proper research and real estate knowledge you can easily acquire property without spending a ton of money.
Lock down a property that’s a good investment first, and that doesn’t mean it has to be at the peak of your price range. As long as you’re smart about what you do with the property afterwards, you stand to gain money, which can snowballs into larger investments down the line.
#5: The Quick & Easy Myth
Whoever told you that real estate investment is a quick and easy way to get money, was dead wrong. Yes, there are those rare times when the market is just right, or someone just gets lucky, but those are few and far between.
Whether a person is buying or selling their house, the process takes time. For most, this is the biggest purchase they have ever made, and it will determine where they call home for the foreseeable future.
Rushing the home buying process can lead to bad, uninformed decisions. So take it slow and pace yourself for the most profitable results.
#6: The For Sale By Owner Myth
Many people believe circumventing a realtor when selling their home will save them money. When someone attempts to sell their home FSBO, or For Sale By Owner, they are mistakenly assuming the process is simple – that putting their home on the market, showing it, and closing is like posting a sofa on craigslist. This obviously isn’t the case.
FSBO ultimately ends up losing the sellers money. Not hiring a professional real estate agent could result in your house sitting on the market due to lack of exposure; a mishandling of contracts resulting fees and canceled transactions; and lost or poor negotiations due to lack of knowledge and experience.
It’s always worth it to work with a professional real estate agent that knows your market and will help you get the best deal. The amount you save going FSBO just isn’t worth it.
#7: The Open House Myth
Everyone loves a nice open house, filled with fresh baked cookies and tons of potential buyers roaming the halls. It’s become a staple of the home buying experience. However it’s not as profitable as you’d think…
Open houses account for only 2% of homes sold, according to the National Association of Realtors.
People enjoy going to open houses on a Sunday, but many just come to look and rarely end up buying the house, especially not there on the spot. Infact, people prefer touring the house individually. This helps them see it as “their” home.
#8: The Find a Home Then Get Pre-Approved Myth
Many home buyers assume they have to find a house before getting pre-approved for a mortgage. When it comes to real estate financing this is one of the hardest myths to debunk.
Knowing what amount you are pre-approved for will help you in your search for a home. If you start your full-on search before getting a pre-approved mortgage, you risk finding a place you love only to discover you’ve been declined for a mortgage.
Also, if you put in an offer to a place with multiple other offers, having a pre-approved mortgage will place you ahead of those without one.
#9: The Price for Negotiations Myth
Pricing a home is one of the most important elements of the real estate process. Going too high can be the kiss of death. Going too low can lose you a ton of money. One myth you may have been told is to “price for negotiations”. This means pricing your home much higher than the actual value and assuming the buyer will negotiate you down.
The internet has changed the real estate game. Buyers today are knowledgeable and go into negotiations fully aware of what a house is worth.
Pricing too high results in the house sitting on the market and many buyers passing it up for more intelligently priced homes.
#10: The Better Through a Listing Agent Myth
Another myth in the real estate world, that is better left behind, is the belief that buying a home through the listing agent saves you money. This is because the agent, whose representing both the seller and the buyer in negotiations, takes less commission.
While a listing agent has an ethical responsibility to represent both parties fairly, the listing agent works towards the seller’s interests and the buyer’s interest, which often do not align.
You wouldn’t want a lawyer who represented both sides, so why would you trust buying a home with a realtor who does the same thing? You want a real estate agent who is looking out for your needs alone.