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Top 10 Real Estate Myths Debunked

Top 10 Real Estate Myths Debunked

A myth can be defined as “anyinvented story, idea, or concept.”

Just because you read something onthe internet does not mean it is true. The same can be said aboutsomething you may hear a co-workeror family member conversing about.

Real estate myths are all toocommon, however, they can be“debunked” with a properexplanation. I know you’re askingyourself, what myths could possiblyexist in real estate?

Here are the 10 real estate myths, inno specific order, that are commonlyheard and misconstrued by thegeneral population.

All Real Estate Agents Are TheSameOne of the most common real estatemyths is that all real estate agentsare the same. This myth can lead tobuyers and sellers making bigmistakes when selecting a realestate agent to represent theirinterests. Every agent has differentskills, different experience levels, anddifferent traits.

For example, a real estate agentwho has been selling real estate fortwo years and primarily works as abuyers agent is not going to have thesame skill set as a real estate agentwho has 20 years of experienceselling waterfront property.

There is a significant difference between real estate agents who work with sellers and real estate agents who workwith buyers. The saying, “All men are created equal,” is the complete opposite when it comes to real estate agents.

All Real Estate Agents Make Boatloads of MoneySuccessful real estate agents certainly can make a very nice income. The amount of time, effort, and money that topproducing real estate agents need to put forth is significant. A common real estate myth is that all real estate agents

Using the listing agent to buy a home doesn’t always mean a better deal

make boatloads of money.

The general consensus is that real estate agents earn 6% of the sale price of a home, no matter what. This is nottrue. There are many things that effect the percentage of commission earned by real estate agents. First andforemost is the fact that commission is negotiable. Any real estate agent who says otherwise is likely violating rulesand regulations.

Let’s assume that a seller is willing to pay 6% of the sale price of their home. The 6% commission is normally dividedbetween the listing and selling brokers. The real estate brokers then take a “cut” of their respective commissionsbefore distributing to the real estate agents involved in the transaction. In addition to their company taking their“cut,” there are many expenses that real estate agents incur that most don’t realize. Items such as health insurance,fuel, car maintenance, and advertising expenses are just a handful of the expenses that real estate professionals areresponsible for.

Obtaining a real estate license is not difficult. Many people get their license thinking it’s an easy way to makeboatloads of money. There are many considerations that should be made before getting a real estate license.

When Selling a Home, Price It To Leave Room For NegotiationsCorrectly pricing a home is one of the top 3 important things when selling a home. Incorrectly pricing a home can bethe “kiss of death.” There are several real estate pricing mistakes that sellers commonly make. One of thesecommon pricing mistakes also happens to be a very common real estate myth as well.

Pricing a home higher so that there is room for negotiations with a potential buyer. This real estate myth, if believedby a seller, can lead to tons of frustration and potentially to a home that sits on the market for a long time. If you areselling your home, you need to understand who today’s buyers are and what they are all about. The internet hasgreatly impacted the real estate industry. Buyers are more savvy and educated than ever before, due to the amountof information available through the internet.

A buyer will not waste their time looking at a home that is overpriced by thousands of dollars. So before you list yourhome $25,000 higher than a top producing real estate agent suggests to leave room for “negotiating,” you need tounderstand that most buyers will know it’s over priced and may pass on looking at your home.

You Get A Better Deal WhenBuying a Home Through TheListing AgentBuying a home can be a complicatedprocess, especially for a first timehome buyer. It’s imperative thatwhen buying a home, you have agreat real estate agent representingyour best interests. A common realestate myth is that when buying ahome, using the listing agent willresult in a better deal on the home. The thought process behind thismyth is the listing agent will cut theircommission percentage becausethey are receiving both “sides” of thetransaction.

Sounds like an ideal scenario for abuyer, right? Wrong. What a buyer

may not understand is that the listingagent is also still representing theseller. While they do need to behonest, fair, and ethical to all partiesand certainly there are real estateprofessionals out there who can betrusted to represent both parties, itneeds to be understood that thelisting agent still has to represent thesellers best interest as well.

If you use a listing agent to buy ahome, consider how hard the listingagent is going to negotiate the pricewith the seller, who also happens tobe their client. Same goes for anynegotiations from the homeinspection findings. It’s possible byusing the listing agent a better dealcould be had, however, the biggestconsideration that needs to be takeninto account is the representationthat will be received.

Getting Pre-Approved Is DoneAfter Finding Your Perfect HomeOne of the hardest myth to break forreal estate agents relates tofinancing. Many home buyersbelieve that getting pre-approveddoesn’t need to take place until theyhave found their perfect home. Thisis a huge mistake for many reasons.

A buyer should be and want to bepre-approved for a mortgage beforethey house hunt. House hunting canbe time consuming, exciting,frustrating, and many other things. Before getting involved in a full out search for that perfect home, eliminate the chances of any disappointment downthe road by getting a pre-approval from a mortgage lender. A buyer can be devastated if they find a home they love,write an offer, and have it accepted only to find out in the future they have been declined for a mortgage.

Another reasons why a buyer should get pre-approved for a mortgage before finding their perfect home is in theevent their perfect home is receiving multiple offers. A multiple offer scenario is a dream for a seller and a nightmarefor a buyer. A buyer who has been pre-approved has a significant advantage in a multiple offer scenario.

Open Houses Sell HousesMany sellers love the idea of their home being open every Sunday. A common real estate myth is that an open houseis a great way to sell a home. The fact is that according to the National Association of Realtors , 2% of homes are soldas a result of an open house. Can a sale result from an open house, YES. Is it likely, NO.

Selling For Sale By Owner Can End Up Costing a Seller Thousands of Dollars

You’re probably asking yourself why many real estate agents push open houses. When interviewing potentialRealtors to sell your home, ask them why they want to hold your home open every Sunday. If the answer is becauseit will sell your home, you may want to reconsider hiring that prospective Realtor.

The primary reason why a real estate agent would swear by open houses is because they see them as anopportunity to pick up new clients. It’s possible that a buyer walks through an open house and does not have a realestate agent they’re working with. This is a great opportunity for the real estate agent to convert the potential buyerinto a client.

Before deciding whether an open house is something you would want to take part in when selling your home,consider all the possible drawbacks of an open house.

Selling A Home “For Sale ByOwner” Saves Lots of MoneyThe main reason sellers believe thatselling their home “for sale by owner”(FSBO) is a good idea is because itwill save them lots of money. This isa common real estate myth. Manysellers who attempt to sell their homeFSBO believe that selling homes iseasy. It would be great if sellinghomes was as simple as putting afor-sale sign in the front yard of ahome, input the home into the MLS,and watch it sell, but it is not.

FSBO’s often will end up losingmoney by not hiring a professionalreal estate agent. This could be dueto several different reasons. Did theFSBO overprice their home and itdidn’t sell for 6 months? Wasthe transaction mishandled endingup in a buyer being declined after 3months under contract? Did theFSBO not know how to negotiate thebest price and terms for their home?

Real Estate Agents Only CanShow Their Own CompaniesListingsReal estate agents who belong totheir local real estate board and MLShave access to any listing that ismultiple listed. A common real estatemyth is that real estate agents canonly show their own listings or theirown companies listings. This isfalse.

For example, if a real estate agent

works for Nothnagle Realtors, my Rochester, NY real estate company, they also can show properties that are currentlylisted by other real estate companies, such as Re/Max or Hunt Real Estate.

Real Estate Agents Say And Do Anything To Make A SaleReal estate agents are held to a very strict code of ethics and also many rules and regulations. Many believe,however, that real estate agents will say and do anything to make a sale, because they don’t get paid until a homecloses. This real estate myth can certainly be possible as there are real estate professionals who will say and doanything to make a sale, however, the majority of real estate agents will not.

Most real estate agents business relies heavily on referral business, word of mouth business, and repeat business. Areal estate agent who blatantly lies to clients just to make a sale, is unlikely to receive any of the above mentionedbusiness. When buying or selling a home, it’s extremely important to select a very trustworthy real estate agent whoyou can trust and are comfortable with.

A Home Doesn’t Need To Be Prepared For SaleThe real estate myth that homes don’t need to be prepared for a sale can cost a seller thousands of dollars. Properlypreparing a home for sale can be the difference between it selling in a relatively quick amount of time or it sitting onthe market and developing a negative stigma. It’s very important that you don’t list your home before it’s ready.

Why is it important to prepare a home for sale? First and foremost, today’s buyers are more often than not looking fora home that is move-in condition. Additionally, the first 3-4 weeks on the market are the most critical. If a home ispriced properly, prepared properly, and marketed correctly, it should be under contract in the 3-4 weeks on the market. Simple preparations, such as staging tips , general cleaning, minor improvements, and pre-listing inspections can allhelp minimize time on market while maximizing the sale price.

The above real estate myths are too commonly thought of by the general public. While it’s understanding why thesereal estate myths could be true, they certainly are not.

Other Real Estate Resources

Is Your Realtor Sharpening An Axe by Lynn Pineda via RISMedia HouseCall Blog

10 Things To Expect From Your Real Estate Agent When Selling A Home

How Does a Realtor Get Paid? via HouseHunt

Have you heard any of these real estate myths “buzzing” around the Greater Rochester, NY area? Have you heardother real estate myths that you’re wondering if they are fact or fiction? If so, we’d love to discuss whether they arefact or fiction, so contact us today!

About the authors: The above article “Top 10 Real Estate Myths Debunked” was provided by the Keith HiscockSold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying,we’d love to share our knowledge and expertise.

We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton,Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush,Honeoye Falls, Chili, and Victor NY.

Visit our website at www.HiscockHomes.com.

© 2014, Kyle Hiscock. All rights reserved.