Bulls hate red. Napoleon was short. Alcohol kills brain cells.
These are just some of the most common myths and misconceptions around the world.
In real estate, there are also myths that keep popping up, much to the frustration of honest, hardworking agents everywhere. If you're in the market to buy or sell a property, do yourself a favor right now and check out these top real estate myths that will lose you money.
Myth #1. FSBO is the way to go
There are sellers who believe that going FSBO (For Sale By Owner) will help them maximize their profits. They think selling homes is easy. The problem with believing this myth is that without the help of experts, one can either undersell or not find a buyer at all.
There's a reason why only 8% of recent home sales were FSBO sales in 2016. More often than not FSBOs end up losing money because the owners don't know how to negotiate the best price and terms for their homes.
Myth #2. Higher is better
When pricing your house, that is.
Well, in a fantasy world, that could happen. You price your home at $35,000 higher than a real estate pro would advise. A buyer magically shows up, not questioning your asking price. The sale is done, and boom you're flush with profit.
But in the real world, buyers will know the number is too high and force you to negotiate a lower price. Or your home sits on the market for a long time. Either way, you've just lost money by not pricing your home properly.
Myth #3. You can get pre-approved later
So you've found the perfect home. Congrats! But wait, you're not pre-approved?
What happens if another buyer swoops in and gets your dream home?
This is one myth a lot of home buyers need to debunk for good. It's something we at Joe Manausa Real Estate often encounter and we find ourselves setting the records straight for a lot of buyers, especially first-timers.
Before house hunting, a buyer should be pre-approved for a mortgage. Full stop. There's nothing more heartbreaking than finding the perfect home only to be declined for a mortgage down the road.
Also, in a multiple offer scenario, a buyer who has been pre-approved, has a better chance of snagging his or her dream house than one who hasn't.
Myth #4. You can sell your home as is
Because that's the way you sell everything, even beat up cars!
You need to properly prepare your home for a sale if you don't want it sitting on the market for a long time. While there are buyers who are looking for houses to flip, there are those who just want to move in asap.
Fortunately for you, if your house is in good condition, you don't have to do anything too drastic. Preparations could be as simple as general cleaning and some minor improvements.
Myth #5. Putting in the first offer gives you negotiating powers
Only if this is some kind of magical real estate fantasy adventure game.
In the real world, sellers look for the best buyers for their homes. Being first doesn't have anything to do with it. That buyer could be the fourth or seventh offer.
Myth #6. Open houses are effective
Did you know that an open house can actually hurt your home sale?
For one thing, buyers do most of their research online even before they contact a real estate agent. Hosting open houses also costs money. The longer it takes to sell your home, the more you have to host and the more you need to serve food and keep your house in show-ready condition.
There's also theft risk, which makes open houses as a selling tool not as effective as it used to be a decade ago.
Myth #7. The best time to sell is in the spring
Lots of homes sell in the spring but you can also sell during the winter. It's not true that there are no buyers in the winter.
In fact, with less inventory during the winter, there are more buyers than there are listings. And this could put you in a great position to sell your house.
There you have it!
7 real estate myths that just need to go away for good. But here's one fact that will help you whether you need to buy or sell a home: a real estate professional who has your best interests in mind will help you make the best decisions.