Real estate is a tricky, ever changing business, and as such, there can be a lot of misconceptions regarding every part of the transaction process. Is there really a "best" time to buy or sell a home? Is it completely necessary to utilize the services of an agent when looking at properties, or is it best to drive around and make phone calls yourself? Does it really pay to upgrade everything in the kitchen and bathrooms before listing your property? Read on to learn more about the top 5 real estate myths!
1. You should always upgrade your property before listing it for sale. FALSE! While it's always a good idea to update anything that may be nearing the end of it's life, a full gut and remodel isn't necessarily the best option for a seller. If, for example, you have a 10 year old dishwasher, it's likely a good idea to install a new, more energy efficient model. Don't get caught up in trying to make everything top of the line - you won't get back all of the money you're putting in! Studies have shown that a seller, on average, will only get back around 70% of the value of remodeled kitchens and bathrooms. Instead, look for mid-range, energy star rated appliances in neutral colors, or stainless steel. Remember, everyone's taste is different, so oftentimes the best course of action is to freshen things up with an inexpensive coat of paint, and replace any old or damaged fixtures such as door or cabinet handles.
2. You'll make more money if you sell the home yourself, without involving an agent. FALSE! While it seems as though skipping the "middle man" would net you more profit when selling your home, most people are not well versed in exactly what the process entails. There's a lot more to it than just sticking a sign in the yard and listing the property on the MLS! Listing price is a huge factor in the speed in which a home sells, and it helps to have a practiced eye who is aware of the ins and outs of the current market to help set this amount. Also, many buyers expect to get a bigger discount, or to be able to barter down the cost more when dealing with a private seller as opposed to an agent. This can take a chunk out of your profits very quickly! Furthermore, any number of problems can arise during the final closing, and it's always best to have a licensed agent who has experience solving these issues there to help advocate for you!
3. You should wait until you find the home you want before getting approved for the mortgage. FALSE!! This is one of the most difficult myths for agents to overcome in today's market. Many buyers believe that the home purchasing process begins with finding that perfect home, and while it can be tempting to go that route, getting pre-approval can save a TON of heartache in the future. What you think you can afford and what the bank will finance can be two very different figures! Make sure you sit down and have a serious conversation with your mortgage agent to be sure that you know in which price range to start your search. Additionally, in the event that you become involved in a bidding war with another buyer, someone who has already been pre-approved has a huge advantage with the seller over someone who may not even be able to get the financing needed in a timely fashion.
4. You have to see EVERY home in your price range before you make your final choice. FALSE! While it may be tempting to see "just one more house," this can actually make your final decision that much more difficult. Seeing around 8-10 homes is average, and if you relate your needs properly to your agent, the number may be even lower! Take your time and write out a list of all of your MUST HAVES. Write down the price, area, school district, and square footage you're looking for, first and foremost. Then, make another list of WANTS. Would you prefer to have a bonus room to use as an office or man cave? Have you always dreamed of having bay windows, or a garden tub? Give this list to your realtor so they can do their best job and find you a short list of homes that will meet your needs and desires. The more homes you see, the more difficult it can become to narrow it down, and the easier it is to become confused and stuck!
5. Agents will do ANYTHING to complete a sale. FALSE (hopefully)!! While there are bad eggs in every business, most real estate agents just want you to find the best home for you. As there are so many different realtors in every area of the country, we work mainly by referrals and word of mouth. Of course it is nice to sell a million dollar home, but if the buyer goes through a foreclosure a few short months later, an agents reputation could be on the line! It's much better, from an agent's perspective, to sell ten $100,000 dollar homes, resulting in 10 happy customers, who can then refer 10 more potential customers, and so on and so on. Remember that your agent works for you, either as a home buyer or a home seller, and it is our job and ethical duty to find you a property that fits your needs AND your budget! If you feel uncomfortable or pressured by your agent, find another one! There are many upstanding, ethical realtors who work hard for their customers every day, and would be happy to work with you on your terms.
The home buying and selling process can be complicated, and the uncertainty of the market and constantly shifting regulations, interest rates, and guidelines can be confusing for everyone. Make sure that no matter which side of the deal you're on, you educate yourself, do your research, and most importantly, work with an agent you trust to be in your corner!