Whether you are a buyer or a seller, the real estate world can be a confusing place to navigate. And it can often be difficult to separate fact from fiction. Here is a list of some of the most common myths in real estate that you may hear.
Myth #1: “Agents want you to pay a higher sale price so that they can get a higher commission”
Real estate agents are honest professionals who more than anything, want you to get the home of your dreams at the right price. There are many factors to consider when placing an offer on a home and your agent will work with you to determine the best offer amount. For example: In a multiple offer situation, you may consider making a higher offer so that you have a chance at getting your offer accepted.
Myth #2: “Listing my home at a lower commission will get me more profit on my home.” Like anything in life, you get what you pay for. You are hiring your Realtor for their experience, their negotiating skills, and their proven track record. Top agents do not discount their services because they don’t have to. Will a Realtor who discounts their services properly market your home to the maximum number of buyers? This is something you should ask yourself.
Myth #3: “Realtors get kickbacks from lenders, inspectors, etc.”
Not only is this untrue and unethical, but according to RESPA (The Real Estate Settlement Procedures Act) it is against the law. No professional Realtor will jeopardize their career and reputation to receive a kickback. Most agents will give you recommendations for various vendors, such as lenders. This is because they have most likely built professional relationships with these people and know that they are good at what they do. This only helps to ensure a seamless transaction for everyone involved.
Myth #4: “You should choose the listing agent who says they will sell your home at the highest price.”
Choosing a listing agent who understands your current local housing market and prices your home accordingly is crucial. Pricing your home too high only means that your home will sit on the market longer. You will get fewer showings and fewer offers, while the same house down the street at a lower price will sell more quickly. You will most likely end up dropping the price and wasting valuable time. You can price your home at whatever you desire. But the fact is, banks will only loan a buyer up to the appraised value of the house and your home will only sell for what someone is willing to pay for it.
Myth #5: “Spring is the best time to sell.”
While lots of homes do sell in the spring, that is not because it is necessarily the best time to sell. Most people just don’t want to deal with selling their home in the winter while others tend to be under the impression that there aren’t enough buyers during that time. The truth is, with less inventory during the winter, there are more buyers than there are listings and that puts the seller in a great position.
Myth #6: “A cash offer is always the best.”
While a cash offer is always a strong offer, it is not always the best in the eyes of the seller. There are many crucial elements to an offer that a seller needs to analyze when making their decision, such as the financing terms, the contingencies, and time needed to close. For example, a conventional offer with no contingencies may be the sellers best option when up against a full price cash offer that is contingent on the buyer’s current home selling.
Myth #7: “I don’t need a real estate agent… I can sell my home on my own and save money.”
Yes, you probably can get your home sold by listing it yourself and not having to pay a listing commission. However, most buyers will be working with an agent, and that agent will expect to get paid for bringing you a buyer and facilitating the transaction. They will typically ask you to sign a One Party Listing Agreement prior to bringing their buyer over. This means that you agree to pay them a commission. You will also want to list your home with an agent because they pay to get your home exposed to the maximum number of buyers and therefor get it sold more quickly. They pay to be a member of the MLS which is where your home gets listed. It then feeds into Zillow, Trulia and all of the other third party real estate sites. What all of this boils down to in the end, is that you need to make sure that you hire an experienced real estate professional to represent you. Look online and check all of their reviews, browse through their website, and check their stats and credentials. Hiring the right person means that they will have your best interests in mind and will help you to make the best decisions when buying or selling your home.