Real Estate Myths: Mistakes To Avoid When Selling Your Home
For Sellers
Written By: Mariko Baerg, REALTOR of Bridgewell Real Estate Group
If you’re looking for a realtor to help you sell your home for the most, contact our team today!
We meet with a lot of Sellers and we often see the same commonly held beliefs that are just plain wrong, and often end up hurting them more than helping them. Here are our top five myths about selling your home.
Myth #1: Pricing High Will Result in a Higher Price
You may want a higher price – every one does! However, pricing high (over market value) rarely means that you achieve a higher price than someone that priced in line with the market. Typically pricing high will actually result in a lower price than market value! Here’s why:
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Buyers comparison shop.
Even when inventory is low, buyers aren’t just looking at your home – they’re also typically looking at anywhere between 5-12 other properties on their tour. Not only are they looking at active properties to see how yours compares, they’re also looking at recent sales to determine whether your price aligns with their perception of value. If your home is priced $50,000 more than a comparable place, many buyers won’t even bother viewing it, as they’ll see you as unmotivated or uneducated (harsh, but true) and they’ll focus on other homes for sale that make more sense on paper to them.
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Listings get stale.
Unlike wine that gets better with age, a house for sale is like a pastry – best when it’s fresh and new. When a home has been on the market longer than average, people start to get suspicious and wonder why it hasn’t sold. When Buyers see a listing that’s been hanging around for a while, they start to wonder: “What’s wrong with this house? Why hasn’t it sold? What is everybody else seeing that I’m not? If nobody else wants this home then I may have a hard time selling it down the road.” If a buyer doesn’t scare easily based on a longer days on market than normal, then they’ll see your listing as an opportunity to negotiate because they’re not in a multiple offer scenario. Enter in the low-ballers and bottom feeder buyers, or a heavy price-reduction on your side to get your listing aligned with the serious buyers again.
Myth #2: Selling A Home “For Sale By Owner” Saves Lots of Money
The main reason sellers believe that selling their home “for sale by owner” (FSBO) is a good idea is because it will save them lots of money; however, this is a common real estate myth. There’s a lot more to think about than just taking some nice pictures, putting them online, and having a ‘For Sale‘ sign up!
There is an overwhelming amount of data that proves that hiring an agent will yield you more profit than selling FSBO. This could be due to several different reasons:
- Do you know how to price a home? Are you familiar with listing strategies? Do you know what’s sold, expired, terminated and active and are you prepared to show the buyer that information as well?
- Are you aware of all the legal procedures and protocol that go in from listing the property until completion?
- Who will advise you on the disclosures that buyers expect? Who will advise you how to fill out and present those disclosures?
- Who will be marketing the property to get the maximum exposure? Will your home be able to be marketed to the MOST amount of people? Do you have time and experience to market it so that it promotes traffic?
- Over 90% of buyers are working with a buyers agent – what are you offering them for commission? Is it the industry standard or do you expect the buyer to make up the difference?
- Who will be screening the potential home buyers?
- Who will be handling the incoming inquiries throughout the working day?
- Who will be assisting with the buyer viewings throughout the working day?
- Who will be negotiating, filling out of the contract and covering its many contingencies?
- Who will be dealing with home inspection findings?
Professional real estate agents do the above (and more!) all day, every day! For Sale By Owner homes consistently sell for less than realtor-hired homes. Why? Because experience, time, marketing, and negotiation skills ALL MATTER when it comes to selling a house.
Don’t believe me? Consider that Colby Sambrotto, founder of ForSaleByOwner.com, couldn’t sell his own New York condo…so he turned to a realtor–and sold it for $150,000 more than the original list price, covering the commission several times over. Not exactly a ringing endorsement of his confidence in his ‘For Sale By Owner’ product.
Myth #3: It doesn’t matter who you hire, the house will sell itself.
In a market as hot as Vancouver’s, it’s easy to get roped in to the belief that any house will sell. While you’re not necessarily wrong that any house will sell, the bigger question is if it will sell for the highest possible price.
Every house in any market will sell within a certain price range…where it sells in that range depends on:
- How buyers perceive the value of the home (affected by house preparation, staging and pricing strategy);
- How many people see the house (dependent on the marketing reach)
- Whether or not the buyers connect with the house (heavily influenced by photography, staging, and the marketing copy). Buyers who fall in love pay more; that’s just a fact.
At the end of the day, you want to hire the agent that will offer you the highest return on investment – therefore the agent that will result in the most PROFIT for you. How do you find that person? The agent that will yield you with the highest return will be the one with the strongest marketing plan, and most negotiation/sales skills and experience.
Related: Optimize your homes marketing with Bridgewell’s MLS Platinum Plus Program. Learn more about our unparalleled marketing will help to sell your home for more.
With that being said, your agent isn’t the only one that will impact the sale – you can too! Make sure that your home is prepared to sell, and not a total dump. Does it present well? Did you have it ready so that it looks great in the pictures? Are you accommodating all showing requests within reason? You will play another role as to whether your house sells for the highest possible price.
Myth #4: Choosing the Realtor With the Lowest Commission Saves Lots of Money
Let’s think of the following few points:
- If the agent was so quick in willing to work at a discounted commission rate in order to get the business, imagine how quick he’ll settle on a sale price during negotiations to get a deal!
- Agents that discount typically don’t have the negotiation or sales skills to offer that another experienced agent does, which is why they need to discount. Experienced agents that bring a lot to the table won’t discount – they don’t need to!
- Less commission for the agent will very likely translate in a lower marketing budget to get your property advertised. Less marketing means less exposure, which also translates to less offers. Meanwhile, a full commission agent will be able to engage more marketing tools in getting the property exposed to an audience as wide as possible.
It might be tempting to follow the advice of this home selling myth, however, be warned that an initial saving on the front end commission typically ends up resulting in major losses on the sales price of your home.
One of my favourite quotes is: “If you think it’s expensive to hire a professional, wait until you hire an amateur!”
As in every profession or organization, there are those who are committed to excellence, are always learning and improving their knowledge, and devote endless amounts of time to their clients and problem-solving. Others simply march to lower standards and do the bare minimum to get by. When you hire a real estate agent to sell your home, do your due diligence. Ask lots of questions. Read reviews. Ask for references, and remember that your take-away profit is more important than the commission you pay.
Myth #5: That agent said I can get $XX for my house.
If only selling real estate was that easy!
When a Seller decides to list their home for sale, we recommend that they interview multiple agents to get a feel for the overall consensus of what needs to be done to prepare the home for sale, a reasonable list price, and the estimated market value.
There’s a term in the real estate world called “buying a listing” and it goes a little something like this…
A Seller interviews three agents:
- Agent #1 estimates a condo to be worth $475,000
- Agent #2 estimates the condo be worth $460,000-$490,000
- Agent #3 estimates the condo to be worth $520,000
Agent #3 gets hired because they provided the seller with the highest estimated price, and convinced the seller that their home is worth more than the other agents are telling them.
How does the story end? The property sits on the market for 100 days. The price gets reduced to $499K. Than $475K. And finally, sells at $469,000.
Yes, that was a true story. And we see it happen all the time.
Truth #1: Your agent doesn’t decide how much your home is worth, the Buyers do. Listing a home at too high of a price will scare off most buyers, or attract low-ballers. [refer back to Myth #1]
Truth #2: Most agents that “buy the listing” don’t have any data supporting that price. If you see an agent recommend an astronomically high listing price that is completely out of line with the other agents, then you should be more sceptical than pleased. Anyone who tells you they can guarantee a price for your home is lying.
Truth #2: If you want to get top dollar for your home, you need to hire the agent who is investing in photography, videography, and online and offline marketing, not the one who guesses the highest number.
Pro Tip: Ask for the facts, if you want the highest price the market will yield you’ll need to hire a great agent with serious marketing skills and price strategically – not crazily.
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If you’re considering selling your home and are looking for some guidance, then give us a call or text 604-319-0200 or email [email protected] to start a conversation. We’re here to help, and we can provide you with a comprehensive pricing strategy and an estimate on the amount that you can get for your home in today’s market.
