June 28, 2021
The 10 Most Common Real Estate Myths, Debunked
If you’ve ever bought or sold a home and turned to the Internet for guidance, you know there is a ton of information swirling around out there. But how much of it is good advice, and how much of it is urban legend (no pun intended)?
Buying or selling a home is one of the biggest financial decisions you’ll make in your life, which makes misinformation or bad advice all the more dangerous. But never fear—we’re here to set the record straight. Here are the most common real estate myths we hear on the job, debunked.
Myth #1: Selling your home FSBO (for sale by owner) will save you money.
We’re starting right out of the gate with one of the biggest myths we see. Many sellers attempt to go it alone instead of hiring an agent to save on commission costs, only to find out it’s not as easy as sticking a For Sale sign in their front yard and snapping a few photos of the home.
In reality, FSBO sellers often run the risk of losing money. This can happen in several ways. For example, FSBO sellers can price the home too high, meaning it could take months to receive an offer. On the flip side, they could price the home too low and leave money on the table. You’ve heard of buyer’s remorse, but seller’s remorse is a real thing, too—that is, looking back and realizing you sold your home for far less than it was worth, potentially missing out on thousands of dollars. In fact, in 2020, homes sold with the help of an agent went for $295,000 on average, whereas FSBO homes sold for an average of $217,900.
When you hire an agent, they’ll not only know how to price your home correctly, but also how to help you negotiate the most favorable offers. Agents—especially at a company like Urban Acres with more than 50 REALTORS®—have access to a whole host of buyers through their coworkers. We know what our fellow agents’ buyers are looking for and can connect you with a serious buyer more quickly.
We can also connect you with more than just a buyer. We’ve got connections in the entire industry, from real estate photographers to lenders, inspectors, and movers. It’s our job, after all!
In addition, agents serve as a guide through the financial and legal jargon that come with selling a home. We are well-versed in the language of offers, counter-offers, and contracts, and we can help safeguard you against potential pitfalls.
Last but not least, selling a home is a massive undertaking and can be a full time job. If you’re considering selling your home FSBO, ask yourself: is it worth the stress and time? Is this really the type of task you want to DIY? At the end of the day, you’re better off hiring a professional with the skills, knowledge, and resources to set you up for success in your sale. A good REALTOR® will be worth every penny.
Myth #2: Buyers get a better deal if they don’t use an agent.
This myth is the exact opposite of the FSBO misconception above. Does buying a house without an agent really save you money? The short answer is no.
Agent commission for both the buying and the selling agent (if there is one) is paid by the sellers. This means that as a buyer, your agent’s services are free to you. That’s one of the reasons why 88% of buyers choose to use a REALTOR®.
The benefits of working with an agent as a buyer are largely the same as the benefits of working with an agent as a seller. They can help you negotiate a fair price; they can give you access to all the latest listings and can help you find homes that meet your budget and needs; they can walk through homes with you and give professional input; and the list goes on.
Ready to buy in the Iowa City-Cedar Rapids area? Find an agent today.
Myth #3: Agents are interchangeable.
There is no such thing as a cookie cutter agent. All REALTORS® have very different personalities, and we each come with our own unique set of skills, specialties, and experience levels. Some agents work in teams, whereas others are a one-stop-shop for all your real estate needs. Some agents have a teaching background and excel at educating buyers and sellers as they guide them through the process. Some agents have law backgrounds and are very knowledgeable about the legal side of a purchase or sale. Still others are experts in certain types of transactions—like first-time buyers or relocation—or specialize in a certain area of the Corridor.
Why does all of this matter? Whether you’re buying or selling, it’s important to pick the agent that’s right for you. They will be representing you during one of the biggest transactions in your life. It’s key to choose a REALTOR® that’s a good fit—someone that you like, trust, and that you believe will have your best interests in mind.
Need help vetting for the perfect agent? Check out this blog for tips on finding the right real estate agent for you.
Myth #4: If you see a home online, that means it’s available.
Many major online real estate sites (such as Zillow) are aggregator sites, meaning they are gathering as many listings as possible, both from the MLS and from public record data. However, these sites aren’t always the most up to date, depending on how often they refresh their data. In addition, sites like Zillow and Realtor.com don’t always delete a listing once it has been sold, meaning they have many “off-market” listings—homes that are not actively for sale.
No matter what site you’re searching on, it’s important to pay attention to the status of the home. A listing labeled “active” or “new” is still likely fair game, though your best bet is to always check with your agent, who has the most up-to-date information on a property. If a property is contingent, that means an offer has been accepted, but that there are certain contingencies that need to be met before the sale goes through. If those contingencies are not met, there is a chance the property could become active again if there are no back-up offers.
Myth #5: Online resources can do it all.
Sure, many major real estate sites can give you an estimate of what your home is worth, help you calculate your approximate monthly mortgage payment, and list your home. However, don’t rely on these online tools as the end-all, be-all of your search or sale.
Why? These sites are often based on algorithms, and the algorithms are only as accurate as the data they pull from. Even if the data is correct, these sites are still missing part of the picture. Unlike an agent, these sites haven’t visited the home in-person; they don’t have “boots on the ground” knowledge that an agent who is well-versed in the local market will.
While sites like these are handy for getting a feel of the market or starting a conversation, turn to your agent for more in-depth and personalized information.
Myth #6: If you’ve bought or sold a home before, you’ll be a pro your second time around.
Unfortunately, buying or selling a home isn’t like riding a bike. Well, it is—if you hop back on the bike and realize everything about riding a bike is now totally different. The buying and selling process changes over time, and the local market is constantly fluctuating. These new processes and market conditions can lead to a totally different buying or selling experience than the one you had in your last real estate transaction. You may feel like a first time buyer (or seller) all over again, especially if it’s been awhile since the last time you went through the process.
That’s where—you guessed it—an agent can help. Between continuing education courses and being involved in the industry day to day, REALTORS® have the most up-to-date knowledge. So even if it’s your second (or third or fourth) time around, consider enlisting the help of your go-to agent.
Myth #7: Price your home higher so you’ll have room to negotiate.
Sure, you want to get as much money as possible for your home, but selling a home is not a “swing for the fences” type of situation. Though it may seem counterintuitive, scoring big in real estate has more to do with being realistic than being bold.
First and foremost, pricing a home too high will drive away potential buyers. If you’re pricing your home high in the hopes of being able to negotiate, remember that if your home is so expensive that buyers don’t even bother looking, there will be no one to negotiate with. This is an especially bad tactic if you’re in a buyer’s market—that is, when inventory is high and buyers have plenty of options to choose from, meaning they’re more likely to skip right over a home that’s overpriced.
At the end of the day, it’s better to set a reasonable price that will draw in the right kinds of buyers and offers. Your agent can recommend a realistic price, ultimately helping you reap the greatest reward when your home sells.
Myth #8: Offer less than you’re willing to pay so you have room to negotiate.
This is the exact opposite of the “price high” tactic, but equally as problematic. While it can be argued that there is a time and a place for lowball offers, those situations are rare and need to be thought through carefully. Usually, lowballing makes your offer less likely to be accepted. The seller’s agent may advise the sellers not to take the offer, or there may be competing offers on the table from those who decided not to lowball it.
Remember that while offering less on a home you want could help you save money, it could also lead to you missing out on your dream home. If the offer isn’t accepted, there’s no home to negotiate for. Instead, work with your agent to make a competitive offer based on factors like your budget, the asking price, the home’s condition, the current market situation, and so on.
Myth #9: If you renovate your home before selling, you will get a dollar-for-dollar return on your investment.
While it’s tempting to think that a bathroom update here or a new carpet there will be worth the investment and then some when you sell your home, sometimes this is wishful thinking. Not all home improvements generate an equal return on investment.
That’s not to say pre-sale renovations are always a bad idea. Even if they don’t get a dollar-for-dollar return, oftentimes these updates make a home more appealing and help it sell faster, which is a huge bonus in and of itself.
If you plan to sell your home soon, contact your go-to Urban agent before you undertake any major home improvement projects. Your agent can advise you which renovations and repairs will generate a higher sale price and which aren’t worth your time.
Check out this blog for a few legitimate ways you can increase your home’s value before selling.
Myth #10: Agents just want to make a sale.
While our ultimate goal is to help you buy or sell a house, we’re about more than making a commission or turning a “For Sale” sign into a “Sold” sign. In fact, many of us think of ourselves more as guides than salespeople. That’s because we’re in it for the long haul, from the first time you contact us to the moment you’re handed the keys to your new house (and beyond). We love it when clients become friends or when we can stay in touch and hear how they’re enjoying their new home. At the end of the day, we’re people helping other people make a well-informed, life-changing decision.
The Truth of the Matter
Don’t let conflicting information lead you astray in your home search or sale. Almost always, it pays (sometimes literally) to go straight to the expert source by contacting an agent.
If you’re looking for a reliable agent to guide you through the real estate market, reach out today. One of our 50+ REALTORS® would be happy to help!