For such a massive industry, real estate still suffers from rampant misconceptions and misinformation. It can be difficult for home sellers to discern between truth and falsehood. The real tragedy occurs when these falsehoods cause a seller to make a bad decision that costs them money. Have no fear though, because we’re going to help make sure you aren’t one of those sellers. Below we’ve outlined the 6 top real estate home selling myths we’ve encountered, and the truth behind the myths.
Myth #1: Zillow says my home is worth $X; therefore it must be correct!
Many people use Zillow for all sorts of real estate information. The site is great at keeping up with housing market trends and new listings. It’s also a tool for home sellers to advertise their properties if they’re not using an agent (more about that below).
Because the site is so popular, it’s easy to believe that everything displayed is 100% accurate. However, Zillow’s algorithm can only do so much to estimate property values. Unlike a skilled realtor, the site’s AI can’t perform all of the detective work needed to dial in an accurate value. It can only guess based on averages.
A good realtor will first pull comparable sales in the area. Next, they’ll comb through the details of each, comparing your home’s features or issues—many of which are only discovered/clarified during a pre-listing audit. Finally, they’ll investigate why any outliers sold for more or less than the average in your neighborhood.
All of this adds up to a much more thorough, clear understanding of what your home’s value is, and why. When you’re talking about such a big asset, you can’t afford to be wrong about something as important as price.
Funny note, according to Inman.com, Zillow’s own CEO sold his home in 2016 for 40% less than its Zestimate.
Truth #1: Zillow’s “Zestimate” is almost never completely accurate. Only use it as a general ballpark for determining a property’s value, if at all.
Myth #2: You will save money if you don’t use a real estate agent to sell your home.
Popular reality TV shows like Million Dollar Listing and Selling Sunset showcase agents doing almost nothing and netting huge commissions. This makes it seem like selling real estate is as easy as listing it on the MLS and holding an open house. This is one of the most persistent real estate home selling myths out there.
Now, don’t get us wrong—like any industry, there are some agents who put in the bare minimum effort. Unfortunately, the shows often seem to gloss over more involved parts of the job in favor of manufactured drama. This gives the impression that there’s not much to selling a home, and paying thousands of dollars for a Realtor seems like a crummy deal.
As the seller, it’s true that you’ll have to pay commission to both your listing agent and the buyer’s agent. Depending on your home’s closing price, this can be a hefty bill. However, the benefits of using a real estate agent vastly outweigh the price you’ll end up paying.
Selling a home successfully requires experience and knowledge of the market. The home needs to be positioned attractively for sale, not overpriced and promoted as far and wide as possible. It needs to stand out amongst the many other homes that are on the market at the same time. Once you receive offers, the contract needs to be effectively negotiated. Then, issues found during inspection need to be properly navigated. Finally, liability needs to be mitigated as much as possible.
For most sellers, not having a realtor to handle these things can result in disaster. The house may sit unsold for months (or years) due to being overpriced. Alternatively, it could mean unintentionally selling your home for tens or hundreds of thousands of dollars less than it’s worth. Worse yet, it could result in costly liability due to a bad contract or not providing certain disclosures.
Finally, don’t forget that even without a listing agent, you’ll likely still have to pay out the buyer’s agent.
Truth #2: A great Realtor will be a neutral expense at worst, and potentially save you tons of money at best.
Myth #3: Your home renovations will always increase your home value.
Property flipping shows are currently all the rage, so it’s easy to believe that any renovation will net a return. In truth, while some renovations may increase the value of your home, it’s not a universal rule. This is one of those real estate home selling myths that can cost you a ton of money if you’re not careful.
So, which renovations should you make, if any? Like usual, the answer is “it depends”. For example, renovating your kitchen can have huge ROI, or it can be a complete waste of money. If your kitchen is outdated or in bad condition, you can turn the weakness into a strength with a cost-efficient update. If your kitchen is ok as-is, spending a bunch to update it may not increase the home value at all.
Additionally, while an update may increase your home’s value, it may not increase beyond the renovation’s cost. A home’s value is primarily about surrounding home values and common features that justify said values. This is why having an understanding of the local market is so crucial.
Per Remodeling Magazine’s 2020 report, the average ROI for remodeling a bathroom or adding an ensuite is just 73%. On the other hand, adding stone veneer might net you a return as high as 120%.
Truth #3: Home renovations may or may not increase your home value. Even if they do, the returns may not be worth the cost. Only a pre-listing audit can determine exactly what renovations should be made, if any.
Myth #4: Leaving personal possessions out adds charm and character to the home.
It’s understandable to think that the cute finger paintings your child made will bring a family-friendly feel to your home. However, inserting your personal belongings into a buyer’s touring experience only inhibits their imagination.
As it turns out, a buyer’s imagination is your best friend. That imagination is what’s going to manifest an emotional attachment to your property. The more a buyer can see themselves living in your home with their own belongings, the more likely they’ll be to put in an offer.
This is why professional staging is so effective. Stagers are experts at dressing up a home while keeping a generic feel. This generic quality is what allows buyers to project their own furniture, belongings and lives into the home.
Truth #4: Depersonalizing your home is one of the most effective staging strategies you can employ. Prospective buyers can more easily imagine their own belongings in the home instead of yours.
Myth #5: Houses sell themselves.
Many sellers think that all it takes to sell a home is to put a “For Sale” sign in the yard and be available for showings. Even in a red-hot seller’s housing market, this won’t guarantee a quick sale. It certainly won’t guarantee you as many offers as possible to choose from.
Home selling is an art. Firstly, it’s important to understand that the market dictates a home’s price, not the seller. In other words, if a home isn’t selling, it’s because the price is too high. It’s really that simple. As such, understanding what price the market will support is a crucial skill.
Secondly, the best house in the world can’t generate offers from buyers who never knew it was on the market. Meaning, maximizing the exposure of your home is of paramount importance. Zillow and the MLS are a decent start, but a good realtor has many other methods of marketing your property available to them. This includes online marketing like social media ads, offline marketing like mailers, and large professional networks for referring buyers.
Finally, home buyers move quickly. Without a dialed-in communication plan, potential deals will fall through. As such, having a dedicated Realtor handle communication with prospective buyers takes a huge weight off a seller’s shoulders.
Truth #5: Like all products, proper pricing, great marketing and quality communication with prospective buyers is what sells homes.
Myth #6: Overpricing the home will provide room to negotiate to a higher ultimate price.
It might seem logical to list your home higher than the market value. By doing so, the intention would be for the buyer to place an offer somewhat lower (perhaps at market value), and then you could counter somewhere in the middle, ultimately higher than market value. It might thus surprise you to know this is one of the biggest real estate home selling myths out there.
The problem is that this approach falls apart completely, because buyers won’t even look at properties that are overpriced. Buyer’s agents will warn buyers away from seeing the property due to understanding it won’t be a good deal for the buyer.
Even worse, your property might not show up on their home search at all. This is because buyers will establish searches based on the price range of homes in the area that match their criteria. If your home is above that range, it won’t be included in the list.
In reality, pricing your home at market value is most often the best decision, and will bring you the most fairly-priced offers. Depending on the property and local market trends, sometimes it even makes sense to underprice the listing. This can create a ton of interest and potentially start a bidding war, which can ironically result in selling for over market value.
Truth #6: It’s never a good idea to overprice your home. It’s much better to list it for fair market value. This will typically net you the most offers and result in you selling your home for the best price.
Hopefully we’ve cleared up some of these real estate home selling myths for you. Are there any others you’re aware of that we missed? Let us know in the comments below!
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