Buying a home is the biggest investment most people will ever make. Consequently, it seems odd that many people do something they wouldn’t do under almost any other circumstances—they reject the council of professionals. Why? The average person buys or sells real estate so infrequently, it’s a field rife with myths, hearsay, and untruths.
U.S. News says that, although most people are rarely part of a real estate transaction, everyone believes themselves to be an expert, and they list several things most people wrongly believe are true. Of the five most common myths, the top two both involve buying or selling a home without an agent.
Myth 1 – Buyers can get a better deal if they don’t use a real estate agent.
False. If the seller is using an agent, the total sales commission is built into the price. If the buyer doesn’t have an agent, the seller’s agent receives the entire commission, so the buyer doesn’t save anything.
Myth 2 – Sellers can save money selling a home themselves.
False. You’re responsible for listing the home online, marketing the home, negotiating the price, and dealing with issues concerning inspections or loan applications, all on your dime. Additionally, buyers expect a substantial discount when they see a For Sale by Owner sign, so you’re almost certain to lose money and waste precious time.
Myth 3 – Sellers should ask for more than they want, leaving room for negotiation.
False. The Washington Post says it’s important to be competitive by starting with an attractive price, and they site a Redfin study which showed a listing gets four times the online views during its first week than it does a month later. Starting high and lowering the price after a few weeks won’t get any new viewers. Also, a low price could start a bidding war, which will work to your advantage, while an overpriced home will languish unnoticed and unsold.
Myth 4 – Agents keep housing prices high to make larger commissions.
False. While it’s true that an agent’s commission is based on the selling price of a house, it’s not a huge amount. The Balance estimates that the commission difference between a $300,000 and $310,000 house is about $150. No real estate agent is going to lose a sale for the sake of a couple hundred dollars.
Myth 5 – Buyers should never pay the asking price.
False … sometimes. According to Zillow, the true market value of any home is almost impossible for a non-professional to accurately assess. A house may be priced at 10% over market value. A buyer offering 5% less than the asking price may think they’re getting a deal, but they’re still paying 5% too much. Conversely, a seller may be in a hurry to sell, pricing a home below market, at a minimum acceptable amount. Offering 5% less than the asking price could lose a great house at a great price.
A good agent will guide you through the home buying or selling process in a manner that keeps you informed without needing you to micromanage. Once you find an agent that suits you, you’ll want to use them each time you buy or sell, and they will reinforce your trust and your friendship with every sale, becoming part of your extended family.