Andrew Wetzel's Musings

March 25, 2019

6 Buying, Selling Myths Clients Believe

Filed under: Buying,Hiring an agent,Marketing,Price — awetzel @ 4:41 PM

Today I want to discuss an article posted on “REALTOR® Magazine Online (December 2018).  The article discussed 6 myths about buying and selling Real Estate and I want to add my thoughts to each of them.  The article can be found on my Facebook business page.

Since the Internet inserted itself between the consumer and the Real Estate professional, which is called “disintermediation”, the so-called Internet Empowered Consumer (IEC) has often sought information on their own while delaying contacting a professional.  We humans tend to do that and, in terms of buying or selling Real Estate, it can lead to costly mistakes.  We tend to be drawn to sources that reinforce what we think or which offer pleasant information.  While buying and selling Real Estate is NOT “rocket science”, it typically involves doing basic things to achieve your goal and delaying or failing to manage these steps can derail the best of intentions.  Here are the 6 myths and my comments.

  1. The longer a home has been on the market, the more negotiable the deal is. Prices are what they are.  Sellers have various strategies in mind when attaching an asking price to their property.  Buyers have strategies when making offers.  However, if there is a mortgage involved, the lender will order an appraisal which will consider how a specific property compares to recent sales of similar homes and a loan will either be approved or not.  Aside from any perception about seller flexibility, I would suggest that buyers not avoid a house simply because it has been on the market for a long time.  Do not assume it is a bad house just because it has not sold.  Of course, if it has been under contract and then re-activated there may be something you need to know.
  1. An open house must be part of the marketing plan for a home. While practices may vary, I generally discourage sellers from having open houses because I have heard of too many issues with them.  While they may work, the percentages are low.  I prefer private showings for my buyer clients.
  1. A 30-year fixed-rate mortgage is the best form of financing. The length of the loan should be considered, especially if you have a specific idea as far as how long you plan to own a house but I am more concerned with the interest rate and my client’s comfort with their monthly payment.  A professional lender is better able to advise my client than the Internet and I prefer a face-to-face meeting rather than chatting online.
  1. Overpricing your house leaves room for negotiation. Perhaps true but the bigger concern is whether or not your house will come out in a buyer’s or agent’s search results.  If a prospective buyer can find suitable options at a lower price, even if your house is in their search results, they may never come to see your house or prefer to make an offer on a house that is already more affordable for them.  In the long run, a sale that is financed involves an appraisal so thinking that a buyer will pay above-market may not be the best plan and your sale could fall through.
  1. Online evaluations can give you an idea of home value. The primary tool or attraction of so-called third-party web sites is property listings.  They use them and assorted ancillary tools like property evaluations to attract eyeballs so they can use “views” or “hits” to solicit advertising.  That is how they make their money.  While these sites cost money to operate, I am not convinced that they spend enough on quality information or that they can do everything needed to ever replace human beings.  Much has been written about valuation models and their algorithms and it has largely been negative, meaning that the valuations are too often off the mark. While they may have more relevance in some areas than others, they rely on recorded data rather than recent settled data so the information is stale.  The valuations are also geared towards “average” properties and may be unable to properly evaluate what interests you.
  1. You have to put 20 percent down on a home purchase. There are many programs and many offers involve a seller offering some financial assistance.  A professional can provide advice.  We do far more than open doors and write contracts!

There is no time for inexperience, empty promises or false expectations! 

Remember:  HIRE WISELY!  We are not all the same!

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