Six Real Estate Myths Debunked
Five Real Estate Myths Debunked
Here are six common myths debunked, so you can get the knowledge you need.
1. When Making an Offer on a Home, You Need to Start Low
Like the classic seller's mistake of overpricing, buyers want to offer too low. While it's fine to negotiate, if a home is priced within range, buyers shouldn't start with an exceptionally low offer. This will only alienate the seller and keep the buyer from being taken seriously. The buyer may just receive a very slight counter or none at all.
2. Zillow Can Tell You Your Home's Value
Zillow can't walk through a property, use relevant comparables, make specific adjustments, and establish an accurate range of value. The "Zestimate" only gives a consumer a general idea of value, and the company calls it a "starting point" not an exact tool. The algorithm can't discern the difference in value between homes in one area or another. It does not know why the last three sales sold for the prices they did, or why a particular school is attracting hoards of buyers. Spencer Rascoff, Zillow's CEO, sold his home for 40% less than the Zestimate.
3. It's Better to Price a Home on the High Side, as the Seller Can Always Come Down
This is one of the most common real estate myths. Naturally, sellers want to protect their asking price, overprice as a defense to avoid selling too low. This does not work. Overpricing a home often just leads to a lack of interest. The home needs to be priced competitively from the beginning in order to attract the right traffic right from the beginning. Further, sellers might think buyers will just make an offer if the home is overpriced, but buyers may not look at it in the first place. The price must entice.
4. The Longer a Home Is on the Market, the More Negotiable the Deal
A home having been on the market a long time does not always mean the deal is more negotiable. In fact, it may mean the opposite. A home lagging on the market is often due to its asking price, lot, layout, condition, or location. The seller is probably unrealistic about their asking price, and probably won't be willing to do lots of negotiating.
5. Multiple Price Reductions Mean the Seller is Desperate to Sell
Many people think that price reductions are a sign of desperation. However, there are other reasons to reduce the price. Prices are often reduced in order to bring it in line with current comparables, price it competitively, or even underprice in order to generate traffic. It could also mean that the seller is through with negotiation, so don't think you know what the seller is thinking.