When it comes to buying or selling a home, it’s difficult to know whose advice you can trust.
Expert opinions, current trends and promises of guaranteed sales leave us buried, so-to-speak, under the brick and mortar of property sales.
You’re probably already familiar with some commonly misused real estate buzzwords. We’re prone to this type of dialogue through misinformation from popular television, the quintessential bench advertisement, or an uninformed agent.
So how do you differentiate fact from fiction?
To help quash the real estate rumours, we’ve shortlisted some of the most overused, and untrue, industry catch phrases.
Understanding the jargon will keep you better informed when making your own buying or selling decisions.
Here are six real estate myths, debunked.
1. Guaranteed sold or we’ll buy it!
On the side of the road, on a front lawn, or a billboard – I’m sure we’ve all seen at least one of these signs and wondered what the catch was.
After all, if it sounds too good to be true it must be, right?
The truth is, these lofty promises are nothing more than a gimmick.
Many sellers assume the guaranteed sales program is their safest option, alleviating the stress that comes with one of their toughest decisions – whether to buy first, or list first.
The agent knows if they can assure you the sale, you’ll be able to list your current home at no risk.
This manoeuvre often pressures a seller into agreeing to a lopsided deal and an under-priced listing.
It’s a classic bait-and-switch move, playing on the seller’s emotions.
In addition, typically only low to mid-range homes are eligible. In the rare case that the agent is required to purchase the home, the payout is minus their commission rate, which is often inflated in an arrangement like this.
The agent further cashes in on the commission incentive by stipulating that the seller must utilize their service when purchasing a new home.
When it comes to promises of a guaranteed sale, just remember, a bus, bench or front lawn sign does not necessarily reflect an agent’s success.
2. Open houses sell homes
The reality is, open houses are more often a recruiting tool for real estate agents, than a method for buying or selling a home.
Having multiple buyers, gathered under one roof, serves as a perfect platform for networking. It’s also advantageous that they’re likely at a pivotal point in the sales cycle.
Agents are aware of this.
These events are regularly hosted for subtle self-promotion. In an effort to boost their own sales, agents target prospective clients, regardless of whether or not they purchase the showcased listing.
Similarly, agents offer free home evaluations for prospective listings. This is just another way to target you as a prospective client and get their foot in the door.
3. I can get a better deal using the listing agent or by selling privately
There is no exclusivity when it comes to real estate listings.
Agents aren’t restricted to only selling their own company listings, and similarly, agents can sell anything on a multiple listing service.
Comparatively speaking, the listing agent has no advantage over any other agent.
You won’t automatically save money, receive exclusive promotions or forgo commission payouts simply by using the listing agent. Nor will you be guaranteed the best deal, in your favour, as their client. In many instances agents are listing’s friend’s homes, past clients or referrals from these people. Are they going to try and get you a better price or a friend or someone they have an existing relationship with?
Listing privately and selling your home yourself is another, albeit unfavourable, option some sellers consider when putting their house on the market.
In most cases, private sales end up netting a loss compared to their MLS counterparts.
Handling realty specific negotiations without experience is a difficult art to master, not to mention having the added stress of competing against seasoned agents with extensive networks and expertise in the field.
Having your own dedicated real estate agent is advantageous in many ways, and gives you a leg up in the marketplace.
4. Always leave room for negotiation
Some sellers believe that they need to price their home high in order to leave room for negotiation.
But you won’t be able to stump today’s buyer with those out-dated methods.
Access to listing prices, comparative sales and other information is readily available online, or elsewhere, so expect prospective buyers to be readily informed before making a purchase decision.
In most cases, the falsity of overpricing leads to a sense of distrust among buyers, which actually does you a disservice in the end.
Be honest about the value of your property, because asking for more than you’re worth is not going to get you any offers.
5. Renovations provide guaranteed returns
Despite what popular home renovation television shows may lead you to believe, you are never guaranteed a 100% return on a renovation investment.
Television programs showcase home makeovers and house flipping projects that claim to sell well above their cash outlay price.
However, this is rarely the case when it comes to the average home renovation.
Often times, sellers only see a fraction of the reimbursement for their improvements.
If you’re thinking about renovating before you sell, you could consider doing targeted renovations instead.
Revamping dated flooring, polishing the walls with a fresh coat of paint or replacing select items are affordable, and effective, alternatives to an entire renovation job.
6. It’s all about location
It’s not all about location.
It’s only somewhat about location.
When valuing your property, the location of your home is one of three things to consider.
The three considerations are: price, condition and location.
Some buyers may be willingly to sacrifice on location, as long as the price and condition meet their needs, whereas others will up-sell the location.
These three variables collectively determine the value of your listing, and value is what it’s really all about.
While your neighbourhood may be an advantage in some cases, don’t take your neighbours’ word as gospel when they share the sale price of their own home. Some agents may initially try to inflate their client’s property, and other times your neighbours may be overselling themselves.
In any case, make sure you hire a trusted agent to determine fair market value for your home, based on the price-condition-location trifecta.