I’m sure you have heard many of these myths before, and if you are currently selling your home, or getting ready to do so, some of these may be floating around in your head right now as well.
After years of experience and closing hundreds of transactions (both on the seller side and buyer side), we know what goes on inside the mind of most buyers. What they look at, how they react in certain situations, what they typically care about and what they don’t.
Let’s take a look at each one of these and explore why they are just myths, and why believing in them my cost you money.
Myth #1: You should always price your home high and negotiate down.
Truth: Pricing too high can be as bad as pricing too low. The first problem that pricing too high creates is this. Buyers search in price ranges, such as $200,000 to $250,000, if you list too high, there is a good chance that potential buyers may not even see your home on the market. The ones that do see it (who are searching in a higher range) will compare your home with others that are correctly listed in that higher price range, making the over-priced home look less attractive. The average buyer looks at approximately 12 homes before deciding on one. You are in competition with those other homes. With today’s technology, and being able to easily search online, potential buyers are more educated that ever. Offers that do come in will tend to be “low ball” offers, or some buyers may not even submit an offer, being scared off by the price. Offers on properties that are correctly price come in much higher. Why is this? Remember that the average buyer looks at about 12 homes before making a decision. When that buyer sees a home they like AND it is priced correctly, there is a fear that somebody else may buy it; so their offer is naturally higher than it would have been if they thought the home was over-priced.
By the time you correct the price and list your home at its fair market value, you will have lost that window of opportunity when your home draws the most attention from the public and real estate agents; i.e. the first 30 days that it is on the market. A well-trained real estate agent who looks out for your best interests will consult with you on your home’s fair market value and different pricing strategies for the current market.
Myth #2: Minor repairs can wait until later.
Truth: Minor repairs make your house more marketable, allowing you to maximize your return on the sale. Most buyers are looking for homes that are ready for them to move into. If your home happens to attract a buyer who is willing to make repairs, he/she will begin deducting from their offer price, or asking for an allowance. The amount of an allowance that you have to offer a buyer is usually more than what it would cost for you to make the repair (or hire someone to make the repair). Even if the numbers are favorable, some buyers still don’t want the hassle of making those repairs. Remember, buyers are comparing your home to other homes that are currently on the market. Your home should be inviting so that everyone who looks at it can see themselves living there.
Myth #3: Once a potential buyer sees the inside of your home, curb appeal won’t matter.
Truth: Buyers probably won’t make it to the inside of the home if the outside of your home does not appeal to them. Buyers and their agents often do drive-bys before deciding whether a home is worth their time to look inside. Your home’s exterior must make a good first impression so that buyers are compelled to stop and come inside. All it takes is keeping the lawn mowed, shrubs and trees trimmed, gardens weeded and edged, and clutter put away. Remember, first impressions are very important. The buyers who do make it inside will already have an impression of the rest of the house based on the exterior.
Myth #4: Your home must be every home buyer’s dream home.
Truth: If you get carried away with repairs and replacements to your home, you may end up over improving the house. There is a point where improving your home doesn’t pay off. The key is to consider what competing properties feature and look like. Second, even if you have made your house exactly the way you want it, everyone’s tastes and needs are different. Your beautiful improvements may not be a hit with the potential buyer. A professional real estate agent can consult with you on what competing properties have to offer – he/she can even show you competing properties so that you can make sound home improvement decisions.
Myth #5: You are better off selling your home on your own and save money on the commission you would have paid to the real estate agent.
Truth: Statistically, many sellers who attempt to sell their homes on their own cannot consummate the sale without the service of a real estate agent. Homeowners who succeed in selling their home by themselves usually net less than if they had a real estate agent working for them. There are a few great reasons for this, but the main two are: 1) investors are the typical buyer type who search out for-sale-by-owners; 2) the potential buyer knows you are not paying a commission and thus is reflected in their offer.
The National Association of REALTORS® surveys consumers every year, including homeowners who succeeded in selling their home without a real estate agent. Over 70% of these homeowners say that they would never do it again.
Myth #6: When you receive an offer, you should make the buyer wait. This gives you a better negotiating position.
Truth: You should reply immediately to an offer! When a buyer makes an offer, that buyer is, at that moment in time, ready to buy your home. This may possibly be the largest transaction that the buyer makes in a lifetime. This can be very emotional for some, moods can change, and you don’t want to lose the sale because you have stalled in replying.