How much do you really know about real estate?
If you are a first time homeowner, you may just have some vague notions about how to sell your home, based on common assumptions. Even if you have bought or sold a house or two, you may still be missing out on some of the most important facts.
That’s why Rocket Realty is taking the time to address the top 5 real estate myths held by current, and prospective, homeowners like you! When you have the facts about the real estate process and who can help you sell your home, you will be empowered to take charge. When you’re in control, the real estate experience you want is within your reach.
Myth #1: You Must Have A Real Estate Agent to Successfully Sell Your House
As can often happen with real estate myths, this common idea developed when the way people tended to things become conflated with the way you must do them. Although the majority of houses are still listed with the help of a real estate agent, the reality is that you can successfully sell your home without one!
More and and more people in recent years are discovering the potential to list their house FSBO (For Sale By Owner); in 2013, 9% of the homes sold were done so without help from a real estate agent! What’s more, the Indiana Association of Realtors reports that less than ⅔ of consumers who did work with an agent are happy with their experience. No wonder the percentage of those opting to work without an agent continues to grow!
With all of the tools and technology available to sellers for little or no cost, you have many of the resources you need to successfully sell your home without having to hire a full time real estate agent. Many FSBOs begin by setting a time frame to try to make the sale on their own, using the tools available online. If need be, they may still list with an agent later on, but with all of the resources at your disposal, paying full price right from the start is not the necessity it once was.
Myth #2: You Always Get What You Pay for When It Comes to Real Estate Agents
If you do decide to work with a real estate agent, how do you go about choosing one? There are many real estate myths related to which agent you should pick and why. While some look for a magic formula balancing price and experience, many others assume that any agent will do. In fact, a staggering 72% of all buyers in 2013 interviewed only one agent! After all, they may think, all agents go through the same licensing process, so you’re guaranteed to get what you pay for, right?
Not necessarily. The reality is that it only takes 90 hours of coursework (and no practical training!) for someone to become a licensed real estate agent. And even if you do find an agent who is experienced in the field, you still want to make sure that they will deliver on their promises. To make an informed decision, you need to interview several agents. Your questions should include:
- Will I be working with you directly or will I be handed off to anyone other than you? If I’ll be working with someone else, what is their background?
- Do you work full-time or part-time as a real estate agent?
- How many other buyers are you representing now? How many sellers?
- Is your license in good standing?
- Can you provide me with the names and numbers of past clients who have agreed to be references
Make sure you are gathering all of the information you need from several agents before you make a decision.
Myth #3: It’s All About Location, Location, Location
This real estate myth is so widespread that it is often referred to as a rule of real estate! Many in the industry will tell you that a house’s location is the first, and the most important, determining factor when it comes to the price and the desirability of the home. In reality, though, this is giving geography a little too much credit.
Does location matter? Yes. In many cases, this might help get potential buyers to check out the property However, location is not the be-all and end-all of the industry. Price is often what gets the deal done.
Unfortunately, some agents will let the seller set an unreasonable price, just so they can get the listing. After all, sellers want to hear that their home is worth more than it is, and some agents will let them maintain that belief just to get another property on the market. Agents invested in giving sellers a more realistic price suggestion have to work against this issue every day. You can work with them on this matter by being objective about your home’s real value. Together, compare your listing price with comparable properties and their sales prices.
Myth #4: The Mural Your Cousin Painted in the Dining Room Makes Your House Worth More
Unless your cousin also happens to be Michelangelo (the Renaissance painter, not the ninja turtle), then it’s time to reconsider. Although you may love the mural, the reality is that others may not. Even if a potential buyer does appreciate your artistic flair, they will almost certainly not pay extra for it. In most cases, the safest bet is to take a few photos of your mural and then paint over it with a neutral color.
When it comes to objective upgrades, such as painting over that mural, laying new carpet or even installing new appliances, it is important that you have a solid understanding of how this can help the sale of your home, as well as its limitations. Are there benefits? Absolutely.
These items can help a home sell faster than competing properties in the same neighborhood. However, will they bring a dollar-for-dollar return on your investment? Definitely not. So, practice moderation when it comes to home improvements as you’re hoping to sell. Stick with neutral colors and choose at least medium grade quality products.
Wondering which projects are worth doing and which ones you should skip? Many real estate agents suggest that these home improvement areas show the best returns:
- Home exterior (“curb appeal”)
- Flooring (especially hardwood floors)
If you aren’t sure about making an improvement in your particular home, talk with your real estate agent.
Myth #5: Your Neighbors Will Tell You Exactly What Price They Got For Their Home
In theory, checking in with the neighbors about the price they got for their home seems like a great idea. It should give you real, relevant insight into the local real estate market, right?
Although it’s a nice concept, the reality is that neighbors rarely tell one another what their houses actually sold for. Instead, they tend to go with a more vague report, saying that they “got the list price” or something to that effect. In fact, this report may be accurate, to a point. In 2013, the National Association of REALTORS found that recent sellers typically sold their homes for 97% of the listing price, but 47% reported reducing the asking price at least once.
While it should go without saying, let’s make this clear: your neighbor’s report is not actual comparative data. To get the in-depth facts on local sales that you may need when listing your home, you need to see the actual data. You could do this one of two ways:
- Ask your agent to see comparative property sheets.
- Go to the courthouse yourself and look up the recorded sales data.
Getting an accurate picture of the sales prices on homes in your area will help you to set reasonable expectations for your own sales process. Unrealistic expectations, in either direction, can make for an unpleasant and unproductive sales process.
Myths & Realities
There are a lot of real estate myths out there! These top 5 are just the beginning. At Rocket Realty, we believe that one of the keys to a positive (and successful) real estate experience is education. The more you understand the reality of the real estate industry, your home, and how agents can help you, the more empowered you become to take charge of the process.
So what else are you wondering about the real estate business? In the comments section below, let us know what you’ve heard… and we’ll let you know if it’s MYTH or REALITY.