The thought enters your head… “I want to sell my house”. You are going to have preconceived notions about much of the home selling process that may or may not be true.
Often these thoughts are put into your head by people other than real estate professionals. But are they true or are they home selling myths not to be believed?
Home sellers come to me with thoughts on certain aspects of selling a home that they think is the absolute truth. But they couldn’t be farther from the truth.
Myth #1- The Home Seller Sets The Price
In actuality, the home seller does set the list or asking price of a home. But this is only a small part of the equation.
I am sure you are not just listing your home to say it is listed…. you want it SOLD!!
But, you only get your home sold if you have a buyer or better yet a group of buyers willing to pay the price. It is the buyer population that actually sets the price by stepping up and making an offer.
Homebuyers are not stupid, they know what other similar homes are selling for in the marketplace. Your home value is based upon its size, location, amenities and what a buyer is willing to pay.
The buyers set the price based on what your home has to offer in a particular marketplace. Without a buyer stepping up to buy your home, your home’s price is not validated.
Myth #2- The Agent That Offers The Highest Price Is The One To Hire To Sell My Home
Many home sellers that want to list their home for sale, hire the agent who says they can get the most amount of money for their listing. This is certainly not the way to go to achieve home selling success.
There is an unscrupulous practice, called buying a listing, where some agents overprice the suggested list price of a home. Once you sign a listing contract, they work relentlessly for you to lower the price into a realistic range where your home will sell. Meanwhile, you are locked into a listing contract.
You should choose an agent based on their reputation, track record and marketing plan. Any number an agent gives you for an asking price of your home should be backed up by data in a Comparative Market Analysis.
Myth #3- Paying A Lower Commission Nets More Money From My Home Sale
Have you ever hear you get what you pay for?
Well, that is true for real estate commissions.
Often a lower commission means less marketing and expertise comes with it. An experienced listing agent has a proven track record and plan that comes with more work and more money spent on your listing.
Case in point. Years ago I had a listing in a condo complex alongside 2 other listings. They were essentially identical and should have sold for within several thousand dollars of each other. Mine sold for $363,00 another agents sold for $345,000 and the for-sale-by-owner sold for $324,000. On top of it mine sold the quickest of the bunch.
The FSBO could have paid a 5 percent commission to the other agent and pocket an additional $4800 or used me and pocketed another $22,200 on top of paying a REALTOR’s commission.
Paying less of a commission does not translate into increased net proceeds. The quality of the listing agent does.
Myth #4- I Can Save The REALTOR Commission By Selling My House On My Own
See Myth #3!! selling on your own does not always translate into making more money on your home.
Here are some facts that you should consider before trying to sell your home on your own.
- Stats show that FSBO sold properties sell for 16% less than an agent sold home.
- The biggest hurdle to overcome is exposure. Without the Massachusetts MLS to market a property, you are bypassing a bulk of the real buyers for your property. The MLS puts every home at the fingertips of almost 100% of the buyers.
- You may save on commission. But every penny you save you will have earned with hours of hard work. And, on top of it leave some money on the table… did I say see Myth #3!!
- Are you sure you are up to the task? Do you have ample knowledge to sell your house on your own? There was a FSBO when I first entered the business, that accepted two offers in their excitement. Neither buyer would back down and it was tied up in the court for years. The seller eventually lost their home to foreclosure.
You certainly can sell your house on your own, but is it the most prudent way to go?
Myth #5- Having A Family Member Or Friend To Sell My House Is Best
Often a homeowner will have a friend or family member in the business when it comes time to sell their home. But it may not always be the wisest route to go to hire a friend or family member as your agent.
Make your family member or friend interview for the job of selling your home like every other agent. They may be the best person for the job or maybe they aren’t. You have too much at stake.
A part-time agent won’t have the experience of a full-time listing agent. Or maybe they are out of the area and can’t service your listing well.
Or do you really want them up in your financial business?
If things go bad you could have a ruined relationship. Won’t Christmas time be fun if Aunt Mary screwed up your listing and cost you thousands of dollars?
Myth #6- If I Ask For More When I Sell My House Ill Get More
When selling your home, setting an asking price that is higher than its true market value doesn’t mean you’ll get more money.
Buyers are willing to pay fair market value for a house. But listing your home for more than fair market value does not lead to people paying for more money for it.
What it does is….
….turn away the real buyers for your house because of your overpricing it is not even on their radar screen.
….bring in buyers that are not the real buyers for your home looking for more than what your home offers.
….drags out the home selling process.
….may lead to your home expiring on the market and not selling your home at all.
….leads to less money because your home has stagnated on the market.
…sells your competition’s home because they look better at a lower price.
Myth #7- Let The Buyers Negotiate
Often a seller will want to overprice their newly listed home. The thought is “I still may get my price but if not they can always negotiate”.
But many of the best buyers won’t negotiate.
Buying a home is an emotional process. If your asking price is more than a few percentage points away from fair market value, they don’t want to get involved in a process that they think won’t have a good outcome. Especially in today’s market where many homes are going at asking or over asking.
And, if they are aware your house is for sale, they will wait for a price change rather than waste their time in a process that won’t get the results they want.
And as I pointed out, you may not be showing your home to your true potential buyers. They may not even be aware of it.
Buyers search for homes up to a certain price point. A home that will sell for $480,000 to $490,000 will usually have many of its true buyers searching up to $500,000. If you price at $525,000 your true buyer won’t even know your home is for sale.
Myth #8- If I Wait Long Enough The Right Buyer Will Come Along
Waiting longer does not mean a buyer will come along and pay your overinflated price when you try to sell your house.
There comes a point, where buyers become leary of a property that has been on the market too long. Here in the current Massachusetts real estate market it is 30-45 days.
Buyers have a herd mentality and if someone else doesn’t want the house why should they? There is something obviously wrong with it in their minds. And it opens your house to offers from bottom feeders willing to low ball an offer.
Also, your very best buyers are scheduling showings when your home is first listed. These are the buyers most prepared to buy. They have been in the market, they are tired, they have been educated by the market and are ready to step up and buy a home.
The majority of the first buyers for your home have rejected every other home in the marketplace and are waiting for the next home that suits their needs.
Myth #9- I Need To Be There To Sell My House
No, no, no. A seller should vacate the property for all showings and have no contact with the buyer.
First off a house sells itself based on its features and amenities at a given price, if it is marketed properly to the right home buying population. It’s your listing agent’s job to translate what those are in the MLS listing to entice the buyer to visit the home.
Buyers are uncomfortable if sellers are present during showings.
First, sellers focus on the wrong things to bring to a buyer’s attention. Along with making remarks that violate fair housing laws as well as not properly disclosing information on their home. Which can lead to lawsuits.
Secondly, they feel like they are intruding if a seller is present.
And finally, they are there with their buyer’s agent and want to discuss the house freely as they tour the home. They will not do so if you are present.
In my almost 20 years of experience, buyers are so uncomfortable when a seller is present they rush thru a home. Often they will say it was uncomfortable when they leave.
Do you really think they got a good look at your home if they are feeling uncomfortable and are rushing?
Myth #10- More Open Houses Will Sell My Home
Open houses do not sell homes. The fact is the majority of attendees are unqualified to close on your home in the next 30-90 days. You are opening up your home to amuse a bunch of people that only qualification is they can walk through the front door.
Yes, maybe a buyer shows up. but they would schedule a showing with their agent if there was not an open house. They would come anyway.
Statistics show that less than 3% of all homes are sold as a direct result of an open house.
There is a time and a place for the occasional open house but to have an open house weekend after weekend, is a waste of your time, your agent’s time and you are opening yourself up to safety risks from an open house.
Myth #11- I Can Sell My House As-Is
The seller always has an option to sell their house as-is. Often a seller who does not want to spend the time and money to prepare their home for sale says, sell it as-is. But most sellers want to get top dollar for their home. Selling your house as-is does not absolve you from preparing your home properly.
As-is sends a message to the home-buying population. It says the house is in severe need of work and the homeowner does not have the cash to fix it up. This usually attracts investors or experienced home buyers that will pay pennies on the dollar for the house.
But for most home sellers this is not their intention. They want top dollar for their home.
Yes, you are going to have to spend some time preparing your home for sale to receive top dollar. It is a step that can’t be missed for a successful home sale.
A move-in ready home is going to attract a larger pool of buyers and bring better offers. Unless you are willing to give up some money, don’t sell your house as-is.
Myth #12- Selling My House Is Easy, All You Have To Do Is Slap Up A Sign
A successful home sale….
Meaning one that sells for top dollar, in a reasonable amount of time, with few hassles….
Requires a carefully crafted plan. Just slapping up a sign could be hindering your sale.
Often my most successful home sales are the sellers that have talked to me months before listing a home. This has given us time to price the home accordingly, prepare the home for the best buyers and have time to present the very best marketing materials including professional real estate photography, aerials, floorplans, etc….
But this all takes time. Sometimes several weeks or more. Just slapping a for sale sign in the front yard does not serve you best.
Myth #12- Spring Is The Best Time Of Year To Sell A Home
With the paradigm shift created in real estate by the internet, spring is not the only time of year to sell your home.
Any time of year is a good time to sell your home. When you want to move is time to sell your home. Waiting for the spring market is not going to have a significant impact on your home sale.
Spring is flooded with listings that may not be serious as well as tire kickers wasting some time. Your home can get lost in the noise.
Waiting 6 or more months to catch the spring market can also mean a market change. Interest rates could rise significantly, there can be a market downturn… no one really knows what the real estate market holds in the future.
Every season has its advantages and disadvantages.
Waiting for the spring market, just because it is the spring market is a mistake.
Did you know January is the biggest corporate relocation month of the year?
Myth #13- Expensive Renovations Yield Big Returns When You Sell Your House
Nothing can be farther from the truth.
Often big renovations are costly and highly personalized and will only return pennies on the dollar.
Renovate because you can enjoy the renovation for years to come, not because you think it will increase the value of your home.
Often a seller will come to me ready to drop thousands of dollars in renovations and I need to pull them back because the return is not great enough to do a full kitchen renovation or remodel.
Before doing any work on your home to sell your home, call your local REALTOR to discuss where you will get the most bang for your buck.
Myth #14- If You Get A Good Offer Quickly You Should Wait For A Better Offer
This may sound like a cliche but your first offer is usually your best offer.
Don’t let your mind think oh wow I must have underpriced it or if they offered this much now I can get more if I wait.
Refer to Myth #8. Your very best buyers are usually the first through the door. They have felt the pain in the marketplace and are ready to step up. They may have underbid on a few houses, they may have lost some over the home inspection, not pulled the trigger fast enough, etc….
They are mentally prepared to step up to the plate and get out of the market by buying your home.
The buyer who calls all excited after your home has been on the market for 65 days…. where have they been? Why today?
They are generally just getting serious about buying and need to go through the buying cycle the early viewers of your home have been through.
If your first offer is in the range of fair market value, think about accepting it.
Myth #15 My Neighbor Said His House Sold For…..
If I received $20 bucks someone told me their neighbors house sold for $XXX,XXX and were wrong I would be rich.
Neighbors lie! Yep, I said it.
Public records don’t lie. Either the neighbor who sold their home lied or like the telephone game it changes every time the info gets passed on from neighbor to neighbor.
Verify your neighbors home sale and see if it sold for what you hear on the street.
Myth #16 My Neighbors House Is A Great Comparable For When I List My Home
Ok, that is great your neighbors home sold for that much. But is it an acceptable comparable to use in the Comparative Market Analysis for your home?
Not every neighbor’s house is comparable to yours.
Just because your neighbors 3000 sq foot colonial sold for $735,000 does not make it a comp for your 1400 sq foot cape style home.
While the location is very important when choosing a comp, there are other criteria to be used.
First and foremost, the square footage of comparable homes needs to be +/- 25% of your home as well as have a similar bathroom and bedroom counts to be used as a comparable.
You need to compare like-kind to like-kind.
Myth #17- I Received A Letter, Agent X Has A Buyer They Can Sell My House To
I go to breakfast with a group of guys on a regular basis. They all own houses in an expensive, rapidly appreciating community.
They also all get letters from agents saying they have a buyer for their home.
Truth be told it is a gimmick to get their foot in the door. When you say bring them by, their response is they want to see the home first to make sure it is a good fit for their buyer.
Their intent is to vet you as a viable home seller and get your house listed. Do they have a specific buyer, no. Do they maybe have some buyers that could be interested in your home, yes. But we all do.
Hiring an exceptional listing agent whose opinion you value will go a long way in avoiding these home selling myths when you decide it’s time to “sell my home”. It will also lead to reduced stress levels that come with selling a home
Nothing beats working with an experienced listing agent to help properly price your home, prepare it for the market place and finally market the heck out of it.
Shattered!! Home Selling Myths That Just Aren’t True is provided by Kevin Vitali of EXIT Realty based out of Middleton MA. If you are thinking I want to sell my house? Give me a call and let’s discuss your upcoming home sale. 978-360-0422.