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Real estate myths abound in today’s market. They can wreak havoc on a home buyer’s chances of landing their dream home, generate missed opportunities for sellers, or lead to costly mistakes. We debunked some of the most common misconceptions facing homebuyers and sellers.
Myth #1: No one with a low locked-in rate will sell their home
Known as the lock-in effect, many homeowners who secured historically low interest rates in the years leading up to the pandemic are reluctant to sell their homes. However, life circumstances will always force homes to be sold, even with a low interest rate. Marriage, kids, divorce, career changes, and other personal reasons are still motivators.
Additionally, there are creative ways to take advantage of the low rates through an assumable mortgage. Most government-backed loans are assumable, so speak to your realtor and lender to see if this is a feasible option for your situation and the home you’re looking to purchase.
Myth #2: I should price my home on the higher side
It is important not to price your home too high. Homes that are properly priced sell faster and for more. If it’s priced too high, you risk having it sit on the market. Using a Comparative Market Analysis (CMA), your real estate agent will be able to properly price your home using local market data and their industry expertise.
Myth #3: All real estate agents are the same and just handle the paperwork
While there is a lot of paperwork involved in home sales, a real estate agent’s services extend way beyond that. There are numerous benefits to working with a real estate agent. They understand the local market, have access to a wide range of listings, and have experience project managing and guiding clients through what can be an overwhelming process. Furthermore, having a strong negotiator in your corner can be incredibly advantageous. Well-connected local agents also know the neighborhoods, community resources, and many great local vendors. Our Windermere Bainbridge Island agents are highly rated local experts ready to assist you.
Myth #4: For Sale By Owner (FSBO) will save me money
In an effort to save money on real estate agent commission fees, some sellers believe it’s better to do a ‘For Sale By Owner’ transaction. However, it’s important to closely analyze the risks involved.
If you do not price the home properly, you risk losing potential buyers, increasing your property’s time on market, or undervaluing the home. So much goes into effectively preparing and marketing a home. A successful seller’s agent knows which updates will benefit your home before putting it on the market, how to properly prepare to list it, the benefits of partially or fully staging it, etc. Furthermore, professional photography, brokers’ tours, and print and digital marketing campaigns can really make your home shine and generate the best possible offers. And, did you know that For Sale By Owner listings are not found on the MLS? That really limits your marketing reach. Additionally, negotiations and a variety of legal forms are part of this complex process. Having a knowledgeable advocate in your corner can be incredibly beneficial.
Myth #5: Renovating your home before selling will always increase its value
Deciding which upgrades to make to your home before selling is crucial. At a minimum, the home should be in good working order. However, not all upgrades are equal. Certain home projects have a much greater return on investment than others. Check out the Cost Versus Value Report from the trade publication Remodeling.
Consulting with a local real estate agent is also a good idea. After conducting a Comparative Market Analysis and pre-listing inspection, you can decide together what upgrades would be beneficial based on your personal situation, timeline, and the local housing market. Should you need access to funds to complete specific projects, the Windermere Ready Program is also available.
Myth #6: You don’t need a home inspection
Home inspections are incredibly valuable tools for both buyers and sellers. For sellers, a pre-listing inspection can prevent any surprises when the home goes to market. A pre-listing inspection can identify any maintenance issues that need to be completed. It can also help the real estate agent price the property correctly if you choose to forgo an expensive repair, such as a new roof.
Similarly, the prospective home buyer benefits from a home inspection. If the seller had a pre-listing inspection done, you could choose to accept that one or have your own done. This inspection can also be utilized in negotiations with the seller.
Myth #7: The only up-front cost for buying a home is the down payment
Purchasing a home requires more than just a down payment. There will also be closing costs. These costs typically include origination and underwriting fees, as well as title and appraisal fees. Many states also require a transfer tax to be paid. Then, there are the costs associated with moving itself, such as renting a truck or hiring movers. Finally, most lenders will want to see a cushion in your bank account. New home purchases often result, such as appliances or needed repairs listed in the inspection report. When analyzing your home-buying budget, be sure to consider these costs to avoid any unwanted surprises.
Home buying and selling is a complex, rewarding process. Working with a knowledgeable team of experts will help make this journey simpler and smoother.
