Buying and selling a home or other type of property is a business transaction that most people will take part in at some point in their life. According to recent statistics, approximately 467 billion dollars' worth of real estate transactions occurred in 2017 alone. But a healthy real estate market is not without perils, one of which is when buyers or sellers fall for myths that only result in complicating the process.
If you are planning to buy or sell real estate in the near future and want to enjoy a pleasant, fruitful experience, avoiding the following myths is an excellent starting point.
Myth 1: Making a low-ball offer is a good strategy
One of the first myths that a prospective buyer might fall for is thinking that they should low-ball their initial offer on the house or property they want to buy.
The thinking behind this myth is that doing so will force the seller to negotiate and reduce their price, but that is almost never the case. Instead, sellers who have priced their home correctly, based on current data from their immediate area, will see through a low-balling buyer's attempted strategy and either reject their offer or counter back at full price.
Myth 2: Setting the initial price too high is a good idea
Sellers also fall for common myths, one of which is that it is okay to set a price that is a bit too high for their area at first, just to see how the market responds.
Doing this almost never brings the interest of a qualified buyer who is willing to pay more than the fair market price. What it does succeed in doing, however, is turning off potential buyers. By the time the seller sees their mistake and corrects their listing price, the home will no longer be fresh on the market and the length of time it takes to sell may be much longer than it would be if initially priced correctly.
Myth 3: Believing that selling by-owner will save money
Probably the most common myth of all is that selling a home on your own without using a real estate professional will result in saving thousands of dollars.
While an FSBO (for sale by owner) sale does eliminate the cost of the real estate commission, the final selling price is typically reduced by even more than the amount of the commission, making a by-owner sale much more costly than one guided by an expert real estate professional. According to recent statistics released by the National Association of Realtors, homes sold using an agent had an average selling price of more than $65,000 higher than the average FSBO sale.
There are many myths that buyers and sellers should avoid when buying or selling real estate. To ensure that you do not fall for any of them, take time to discuss your situation with a trusted real estate professional in your area.