Whether you’re a Realtor, mechanic, or even a doctor, chances are you spend a good portion of your day dispelling common myths about your job.
The real estate industry constantly changes. Still, some common home-selling myths persist even after they’ve been debunked. Let’s take the enduring belief that you need a hefty 20% down payment to buy a home, which continues to be a misconception. I’m here to set the record straight and help my readers know real estate fact from fiction. I compiled this list from years of experience with buyers and sellers and real estate stories from my mentees. So, let’s turn up the brightness and shed some light on the real estate industry.
Setting the Right Expectations
Myth #1: Going With the First Buyer Is Rarely the Best Choice
After navigating hundreds of real estate deals, I can confidently say that your first offer is nearly always the best. It’s often the strongest in terms of price and conditions. However, I’ve seen it time and again: Sellers want to “hold out for a better offer.” You can help your seller by offering perspective—flip the situation and help your seller imagine themselves in the buyer’s shoes.
Let’s imagine one of those “grass is greener” homeselling myths: Perhaps that first offer on your new listing came through in just three days (and above the asking price) because that buyer could have been waiting for just the right home. When they saw your listing, they put their best foot forward because they really wanted the home. For your sellers, it’s in their best interest to negotiate here, not just to decline the offer waiting for a better one.
Fact: Now, it’s your job to educate and coach your clients. This is one of the top blunders your sellers could make. That first offer is like a golden opportunity that could save months of inconvenience, stress, and anxiety. No more constant showings and feedback, ongoing HOA dues, or the worry of repairs (not to mention balancing a mortgage payment). After all, a new listing on the MLS gets the most attention in the first week. Then interest starts to taper off. Plus, every offer on the table is just a jumping-off point.
Myth #2: Wiggle Room in Pricing Is Essential for Negotiation
The market price of a home can fluctuate by tens of thousands of dollars over a year. If you’ve got an overpriced listing on the market, it gets staler every day that the listing is available. During the housing boom of 2021, homes that were on the market for longer than a week had a perception that something was wrong with them. Then, when the price drop happens, you have to justify the price cut to other agents.
The truth is a big piece of a real estate agent’s job is to price a listing accurately. The thing is, it can be tricky. You’ll most likely get three different numbers if you have three different real estate agents conducting a CMA.
Fact: There’s no reason to “leave some wiggle room” to get the highest offer. When pricing a home to list, only you, as the listing agent, know all the significant factors that drove the pricing on this home. Don’t let the listing get stale because your sellers thought they might get a good offer. So, our job is to listen to the client’s situation and what they’re expecting. The highest price is usually their motivation, but not always!
Myths #3: Listings Sell Themselves
Listen, was there a time when you just listed a home without photos, and it would get multiple offers? Sure. That time is not now. Marketing your listings is one of those pieces that is done behind the scenes.
However, nowadays, agents need to pay attention to every little detail. Just how the photos are placed in order can affect the views on a listing. It takes looking at dozens and dozens of listings to get a feel for what works—and what doesn’t.
Fact: As a real estate professional, you need to be confident in order to successfully market a listing. Sellers will ask, What are you doing to sell my home? Be prepared to answer this question. Home sale preparation is done like a dealership preps the cars for the lot. Perhaps it looks like they just posted a sign in the window. Still, the car was detailed, professionally photographed, staged, posted online, and syndicated to numerous websites to find a buyer. Selling a home is the same—it’s not just a sign in the yard and a posting on the MLS. Once you have your full real estate marketing checklist, you can execute it quickly.
Preparing Your Home for Sale
Myth #4: Your Home Should Reflect Your Personality
Sellers, especially those who have lived in their home for decades, are attached. They have a hard time taking down their personal or sentimental items. However, potential homebuyers can be detail-oriented (and rightfully so!). Speaking from experience, they can also get hung up on very minor details, like what types of books are in the cabinet and the style of the laminate flooring. So, while those small changes are simply cosmetic, they can be a tough hurdle for some buyers.
Be mindful as well of the fact that emotional attachment can be a burden to potential buyers. It can alienate some buyers if a home looks “lived-in.” I also stress to my clients that personal effects aren’t welcome because of strangers. Privacy and safety concerns are real, and while most folks are reasonable people and accompanied by their agent during a showing, you can never say for sure.
Fact: Your listing looks best when it’s easy for buyers to see themselves living there. You’ve got to remove the clutter, kids’ toys, and personal artwork. Let’s think back to the reference of a car from a dealership: you wouldn’t want personal effects like preprogrammed radio stations, stickers on the dashboard, and trinkets hanging from the rearview mirror. It’s best to showcase your home or listing as a blank canvas for buyers to imagine their new lives.
Myth #5: Buyers Prefer an ‘HGTV Style’ Home Remodel
HGTV brought a lot of great things to homes—interior design on a budget, a newfound love for historic homes, and, of course, the dreaded open floor plan. These days, it seems like an open floor plan is all the rage with homeowners. However, that opinion is starting to change—once buyers realize that the lack of privacy and loud noises throughout the house isn’t ideal!
Investments & Improvements
Myth #6: Major Renovations Guarantee a Return on Investment
Home tastes and styles change. While knocking walls down can seem easy, putting them back up is much harder. Every buyer has their own taste, and a complete kitchen remodel may not drastically change the value of a home. People are ready to list their homes, and the next thing they think about is prepping it. They know their kitchen is probably outdated, so they convince themselves they must spend $20,000 to remodel.
Unfortunately, you’re just giving yourself a headache. Sure, the curb appeal may be better, but consider the fact that appraisers don’t factor in the cost of appliances or upgrades when determining a home’s value.
Fact: People really think a big remodel is important. Some clients may even ask if they should look into a HELOC for renovations. Unless substantial improvements are needed, like mold mitigation, your sellers should avoid anything that takes longer than a few hours. Plus, consider the fact that if an issue arises during the inspection, they can offer a credit to keep the deal moving forward. That’s most likely easier and faster than replacing an entire system or a big renovation. Consider a less costly improvement, like resurfacing the cabinets or upgrading the sink, to help the kitchen stand out.
Myth #7: Converting the Garage Into an ADU Increases Property Value
With the short-term rental craze rising, some folks are looking for a way to add an accessory dwelling unit (ADU), either through a basement, garage, or large shed, to increase their value instantly. This is one of those ideas that can be better in theory than in practice.
Homeowners can spend upward of six figures on an ADU renovation to provide complete electrical, plumbing, and furnishings in an accessory unit. They expect that it will raise the value of their unit when, in fact, that square footage cannot be added to the total square footage by an appraiser. Essentially, it will add very little (if anything) toward the value of your home.
Fact: If your sellers want to renovate or upgrade, spend the money on the bathrooms and the kitchen. These renovations are where they’re more likely to see an improvement in the value of their home. Plus, you’re not limiting the potential buyer pool to those folks who are only interested in an ADU. You’ll also need to contend with zoning, permits, and perhaps even short-term rental restrictions set in place by the HOA (or even the city). It’s not worth it.
Navigating the Selling Process
Myth #8: Getting Pre-approved Should Happen After Finding Your Perfect Home
House hunting can be exhausting. Even just showing a home takes a lot of coordination. If a buyer loves the home but has no way financially to prove that they 1) are serious about a purchase and 2) can finance it, then you’ll need to send them to a lender. A pre-approval won’t take long and can save your buyer a headache if they find a home they love before realizing they can’t get a mortgage to pay for it.
Fact: Sometimes buyers can be pushy about this. However, you must assure them that showing they can buy the home is the first step. If it’s a cash buyer, ask to see the pre-approval letter or proof of funds—and even if they have the contact information for their lender or banker. As we mentioned in our article on how to tell when your client is lying, trust but verify.
Myth #9: Larger Brokerages Offer Superior Services
One of the more common misconceptions revolves around the belief that the size of the brokerage determines the effectiveness of your marketing (and perhaps pricing!). With the advent of internet syndication, your MLS exposure is pushed out to dozens of other sites without being part of a large brokerage. This syndication includes real estate websites with the most traffic, like Zillow and Realtor.com.
Fact: The quality of MLS entries matters more than the brokerage size for effective exposure. Plus, what else are you doing to advertise the home? Do your listing services include mailers or any unique exposure? If you’re at a smaller boutique brokerage, do you pride yourself on providing superior service to your clients? Speak to those past experiences by highlighting your referrals. Make yourself stand out, and the results will speak for themselves.
Modern Marketing Strategies
Myth #10: Still Photos on the MLS Are Enough
At this point, some agents may argue that traditional still photos have served the industry well for years. However, 97% of all homebuyers used the internet in their home search. It’s your duty to showcase a home in its best light. Buyers need to be attracted to your listing—and that starts with professional photos.
Relying on still photography won’t be sufficient to capture the attention of today’s tech-savvy (and visually oriented) buyers. The truth is that the real estate landscape has evolved, and so have the expectations of potential buyers. People want floor plans and a 360-home tour.
Fact: Many real estate photographers offer upgraded packages that include twilight photos, drone footage, floor plans, and 3D home tours like Matterport. While there are rare instances like “as-is” investment properties, try to upgrade your digital marketing to showcase property online as best as possible. There are tools like Pivo.ai and Zillow 3D home tours that you can easily upload to your listing. You can even use photo editing software like Phixer to edit your hero shot on the MLS. Note that myths about selling your home during holidays apply here: if your listing photos still have snow in them and it’s not the season, it’s time to re-shoot.
Myth #11: Open Houses Are a Necessity for Selling a Home
This is a typical homeselling myth that may benefit agents. After all, we’re huge fans of agents hosting an open house—but remember that hosting one is more for your benefit as an agent to leverage your listing for leads. If the home isn’t vacant and it’s a bother to your sellers, don’t push your clients to use their space for an open house.
Fact: Some agents believe open houses are on the decline. While COVID took its toll on open houses, they’re still a great way to get your listing (and your brand) out to the public and the neighborhood. Looking for tips to supercharge your next open house? Check out our list of 33 Open House Ideas That Will Actually Get You Leads.
Bringing It Together
It’s tough out there for real estate professionals. You’ve got a lot of hats to juggle, and honestly, myth-busting will be another one to add to the stack. As the late American president John F. Kennedy said, “The great enemy of truth is very often not the lie: deliberate, contrived and dishonest, but the myth: persistent, persuasive and unrealistic.”
Next time you’ve got a client with hard-stuck—and possibly outdated—beliefs about the industry, try to point them in the right direction with facts, not opinions. Feel free to share this article with your office (perhaps even your clients). And if you’ve got a myth about the real estate industry that we didn’t cover or a tip for busting myths, share it in the comment section!
Source: theclose.com ~ By: Trever James ~ Image: theclose.com
