In doing your own research or listening to stories from family and friends, you might think that you know how the real estate industry works. It’s good to be informed and getting recommendations from people close to you instills trust. But how often do you buy or sell a home?
While some aspects of real estate have stayed the same for decades, in recent years, technology in the industry is radically changing the way we buy and sell properties. If you’re not a real estate profession, working day-to-day in the field, it’s hard to keep up. In fact, believing certain myths could cost you money when it’s time to buy or sell a home. Check out these ten common myths:
Selling a home yourself will save you money
With all the online resources, it is possible to sell your home yourself. Selling a home is a big undertaking, especially without the help of a real estate professional. In the end, what you save on a real estate commission might actually mean a lower sales price. Find out more in Why Hire a Real Estate Broker?
All real estate agents are the same
There are a lot of really good real estate brokers in Chicago. Although, they’re not all the same. It’s important to have a high comfort level with your real estate broker. You can get referrals from friends, research online reviews and ask the broker for client referrals. The most important thing is the feeling you get from a broker in a face-to-face meeting, so set up an interview and check out our Questions to Ask Before Hiring a Real Estate Broker.
A good real estate broker will be actively involved in the whole process, from start to finish. They will be focused on your needs and working in your interest. The realtor makes the deal happen. Plus, the relationship between the buyer's realtor and the seller's realtor is very important because they are the front people for their clients.
The real estate market will only go up
Home prices have been going up in recent years. But remember the economic downturn and sharp decline in 2008? If home prices have gone up, there’s a good chance for a market correction. Although, it hopefully will not be drastic like a decade ago. Remember, owning a home is most beneficial when it is a long term investment.
Renovation costs will be covered in the sale of your home
Not necessarily, unless you find that perfect buyer with your exact tastes. If a recent renovation isn’t appealing to a buyer, they probably won’t be motivated to redo the renovation and will pass on your property. You’re better off adjusting the home price. As for renovation projects, do them for your own enjoyment at least a couple years before you are ready to sell.
A home will either pass or fail an inspection
As a home inspector evaluates the condition of a property, they will find things that need to be fixed. No property is perfect. In fact, they are hired by the buyer to do an independent evaluation so they understand the condition of the home. It’s not pass or fail. And the fixes are negotiable between the buyer and seller. An inspector might throw out numbers, estimating the cost of repairs, but you really need to get estimates from professional contractor. Costs will vary from contractor to contractor and many times the inspector is wrong about what actually needs to be fixed.
Zillow’s home estimate is correct
Not usually. There are various reasons for this. Vital information such as interior and exterior home renovations may not be included as the algorithm is pulling off the previous sale of the home. This can cause inaccurate descriptions, like square footage and/or room count, that drive home estimates down. Another factor is that home values are based on past sales and if the market is significantly hotter, those sales may not be an indicator of the current market. Read more at Is a Zillow Zestimate of your Home Value Accurate?
Open houses draw the most serious buyers
Open houses draw people who are curious about what’s on the market, inquisitive neighbors and those looking to see how a place is decorated. Serious buyers do come to open houses, but many times they are not ready to put in an offer. I have sold properties at open houses, but more often than not, the open house serves as a great marketing venue to help spread the word.
Start with a low offer on a home
While there is nothing wrong with negotiating, you might alienate the seller. A low offer tends to be insulting and won’t be taken seriously. Start with a fair offer and this will lead to amiable negotiations and cooperation along the way.
Multiple price reductions or on the market a long time means desperation to sell
In a changing market, property price points will change quickly. It can be harder to determine a fair market value in this type of economy. Price reductions are made to be competitive and aligned with current comparables in the area. If the home has been on the market for some time, it could also be due to the home’s layout, location or condition. It all comes down to demand and price for a certain type of property.
Multiple offers are an advantage to home sellers
It may seem like this scenario would guarantee the home would sell for top dollar. Maybe, and maybe not. A bidding war can be stressful for both the seller and potential buyers. If the buyers feel like they’re being played, the seller may end up watching all the leads disappear. Or, if the home is underpriced, there’s a chance that multiple offers won’t bring the price up to fair market value. It can be tricky.
If you have questions about the real estate market or the “best”solutions to selling or buying a home, send me a note at Charese@menardjohnson.com or give me a call (312) 399-1271. I am happy to help in any way.