Whether you’re a real estate agent, mechanic, or even a doctor, chances are you spend a good portion of your day dispelling common myths about your job. Whether it’s patients who think they know it all after spending 10 minutes on WebMD, or homeowners who think their home is worth what Zillow says, everybody’s an expert these days.
Believe it or not, this is such a common problem that there’s even a scientific theory to explain why. It’s called the Dunning Kruger effect, which says that the less people know about something, the more confident they are about being right …
In order to help close the knowledge gap between real estate agents and homeowners, we decided to work with our friends over at Douglas Elliman, Compass, and Leverage Partners in order to dispel some of the most common (and annoying) myths about home selling.
Myth: “If The First Offer Was Good, That Means My Home is Worth Much More”
Fact Check by: Dolly Hertz, ENGEL & VÖLKERS NYC
The Facts: “This is the No. 1 biggest mistake sellers make. Your first offer is almost always your best offer, provided it’s within striking distance of your target price. You save months of showing inconvenience, months of HOA costs, months of repairs and mortgage payments. Your fresh new listing gets the most attention during the first week on the market. After that, inquiries drop off significantly. Also, let’s not forget that a buyer’s offer is simply a starting point — there are negotiations in your favor that follow it.”
Myth: Pricing an Apartment Should Include Wiggle Room for Negotiation
Fact Check by: Jordan Shea of The Eklund | Gomes Team at Douglas Elliman
The Facts: “As apartment and house values continue to soften, what is priced with 100% accuracy today will be overpriced tomorrow. In a declining market, pinpoint pricing is pivotal, as one must attempt to get a signed contract on the product within 90 days, or else risk the listing becoming “stale” and the perceived value of the item in question declining both in the eyes of the buyer and of their broker.”
Myth: You Don’t Have to Depersonalize Your Home
Fact Check by: Yawar Charlie, The Aaron Kirman Group at Compass
The Facts: “Homeowners believe you don’t need to depersonalize your home before you put it on the market. The reality is, you should. While the process of selling a home can often be very emotional, it’s best to make sure all the clutter, artwork, photos are gone.
This is no longer your personal space, nobody is buying your stuff; they’re buying the walls. You are opening it up to the public for a business transaction, and that is how you have to look at the house from now on.”
Myth: A Listing Agent’s Job is to Persuade and Influence a Buyer to Purchase Their Listings
Fact Check by: Arvin Haddad, Aaron Kirman Group at Compass
The Facts: “Buyers choose their future home based on their own wants and needs. Agents are the brand ambassadors, hired to bring the targeted qualified buyers in hopes that they fall in love. Negotiating and keeping the deal together is where Realtors add the most value.”
Myths About Selling Homes in Manhattan
Manhattan Home Selling Myth: You can sell it alone
The Facts: “A lot of sellers don’t want to part with 5-6% of their money but if they sell their own homes a lot of times they are leaving a lot more money on the table! You may able to save $60,000 in commission but you just lost $150,000 in selling price.”
Manhattan Home Selling Myth: You Can Out Maneuver the Co-op Board
The Facts: “A lot of sellers think that they can do this themselves. But board applications are very intricate and need to be submitted exactly as requested or the buyer can get a turn down. We had a seller who listed their own apartment and did not know how to properly review a financial statement. The buyer had too much debt and would never have gotten past the board.
They went through a three month process of submitting a package to the board and the buyer was turned down. They then listed the apartment with us. We received multiple offers and advised on the best candidate to go with. We got them an approval and they were able to sell their home.”
Manhattan Home Selling Myth: “My Home Looks Perfect This Way!”
The Facts: “A lot of sellers have an attachment to their home and think that their way is the optimal way of furnishing. There was a seller who had a pool table in their dining room. As cool as this was, we had to explain to them that other buyers would not appreciate the space as much as they would if we got rid of the pool table and brought in a table that sat 12 people.
Since such a large dining room is so hard to find in a New York City apartment, we really wanted to highlight this feature of the apartment. They took our advice and the buyers wound up being a family downsizing from the suburbs who loved to entertain and host the holidays for their large family. They fell in love with the dining room that would allow them to keep this tradition going while downsizing to a home that is 75% smaller!”
Manhattan Home Selling Myth: You Can Time the Market
The Facts: “A lot of sellers read about the summertime being a slower time in the market. And while that is true for some segments of the market, it does not apply to all. We had a seller that wanted to wait to list their apartment in mid-September. We knew that there was a very high demand for three bedrooms on the Upper West Side due to another listing we had nearby. We advised them to list the apartment in mid-July and we were in contract two weeks later at the asking price!”
Myth: Houses Sell Themselves
Fact Check by: Chantay Bridges, Truline Realty
The Facts: “No, no, and no! While it may look like a house can literally sell itself, that’s another myth. Just like in every profession, with certain tools, it will make for a quicker, easier, better sell. Car dealerships leave tons of vehicles sitting on a lot, but did you know, there is a method to their madness? While it looks like they just set a car there, placed a sign on it and walked away, there is more to it.
Many times, it’s a well thought out plan. Everything from whether it’s highlighted in the showroom, in the front of the lot, cleaned regularly, etc. The cars are prepared to show in the most appealing way to consumers and passersby. When it’s done right, the vehicle captures the eye quickly and the end result is it’s purchased at their price speedily.”
Myth: Using a Low-Commission Agent Will Save You Money in the Long Run
Fact Check by: Sarah F. Findel, The Lifestyle Group@RE/MAX
The Facts: “First and foremost, you get what you pay for. If an agent is so quick to let go of their money, what do you think they will do for your money when it comes time for negotiations?
Sellers need to understand that in today’s economy, you need an agent who is willing to spend money to market their home properly. Usually, with a seller that saves on the commission, their home takes longer to sell and more time on market means less money in their pocket.”
Myth: Buyers Will Appreciate Your Renovations as Much as You Do
Fact Check by: Marilyn Blume, Warburg Realty Manhattan
The Facts: “Sellers have an understandable emotional attachment to their home and believe that potential buyers will have similar taste. Sellers put a lot of time and love creating a home and take it personally if others do not feel the same and/or want to change the aesthetics.
Having an emotional attachment to their home can alienate some potential buyers if the owners feel insulted. For instance, if a buyer wants to change a living room (remove built-ins, any detailing on the walls such as Wainscoting) the seller could be personally offended which could negatively affect the negotiating process. Sellers need to emotionally detach themselves from their home and see who offers the best deal.”
Myth: The First Buyer to Make an Offer Will Always Lowball You
Fact Check by: Scott Gibson, Compass
The Facts: “In reality, your first offer is generally from your best buyer. This is the person who made the commitment to engage with the seller. Even if it seems low, this is true a very high percentage of the time.”
Myth: Buyers Want an “HGTV Style” Home Remodel
Fact Check by: Stevie Rangel, Compass
The Facts: “Many buyers appreciate original fixtures if they have been well taken care of. Consider what is pristine about your home and what makes it unique. Do you have original vintage lighting? Solid wood cabinetry? Some original features are better kept, instead of replacing with generic updates before selling.”
Myth: In Order to be Considered a Bedroom, a Room Must Have a Closet
Fact Check by: Tiffany Johnson-Wilson, Johnson & Wilson (Leverage Global Partners Member Brokerage)
The Facts: “In reality, it’s an actual appraisal guideline. It was common for homes built in the late 1800s or early 1900s to have bedrooms that used armoires and didn’t have closets. Those rooms are legally still a bedroom.”
Myth: The Standard Commission is 6%
Fact Check by: Gloria Singer, Boca Expert Realty, LLC (Leverage Global Partners Member Brokerage)
The Facts: “There is no standard commission. Price fixing is an antitrust violation. Brokers typically charge a commission based upon sale price, but this amount is not fixed and is negotiable. Generally, the listing broker agrees to a fee with the seller, and then makes an offer of compensation to the buyer’s broker from this amount.
Every market is different, and every broker charges different fees. There are discount brokers who charge very little and provide very little service, and there are full service, concierge-style brokerages at the other end of the spectrum. Be sure to understand what you are being charged, and what will be provided for that fee.”
Myth: Neutral Finishes Are Best When Selling
Fact Check by: Rebecca Chambliss, Compass
The Facts: “When sellers put their house on the market they think everything needs to be brought back to neutral colors. The reality is bland is boring. Well designed, unique spaces inspire and attract better buyers.”
Myth: “If I Redo my Kitchen or Bathroom, I Will Recoup my Investment When I Sell.”
Fact Check by: Christopher Totaro, Warburg Realty
The Facts: “Reality TV has greatly perpetuated this myth. Homeowners need to know that the reality, pun intended, is that every buyer has their own taste and a homeowner would be wise to concentrate on the generic improvements like spending a few thousand dollars on refacing cabinets just so the kitchen has a clean look to it or redoing the grout in the shower.
Surveys show that a major kitchen remodel will return 59% of the investment vs a minor remodel returning 81.1%.”
Myth: Getting Pre-Approved is Done AFTER Finding Your Perfect Home
Fact Check by: Dana Galli, HM Properties (Leverage Global Partners Member Brokerage)
The Facts: “A buyer should be pre-approved for a mortgage before hunting for a house. House hunting can be time consuming, exciting, and frustrating all at the same time. Before getting involved in a full out search for that perfect home, buyers should eliminate the chances of any disappointment down the road by getting a pre-approval from a mortgage lender. A buyer can be devastated if they find a home they love, write an offer, and have it accepted only to find out in the future they have been declined for a mortgage.”
Myth: Converting the garage Into an ADU Will Raise the Value of the Property
Fact Check by: Gloria Carmona, Director, Estates Division, Compass
The Facts: “Homeowners are spending an average of $150,000 to convert the garage into an ADU (accessory dwelling unit), expecting that when they sell, it will raise the value of the property. The reality is, this money will NOT come back to your pocket. The square footage on garage conversion cannot and will not be added to the square footage of the house by any appraiser, hence your money will not be recovered entirely. It’s better to upgrade bathrooms and kitchen, that’s where you get real value for your home.”
Myth: A Large Brokerage Will Do a Better Job Than an Independent Brokerage
Fact Check by: Carol Crandall, The Preferred Properties Group (Leverage Global Partners Member Brokerage)
The Facts: “Sellers often believe using a large corporate relationship estate firm will provide a greater website exposure for their home. In fact, with the power of the internet any homes added to the local MLS will syndicate out to the same websites. Whether the home is listed by a local independent company or a large corporate company the home will appear on the same search sites.
Under the same scenario, a small company’s website will also include the large corporate firms listings. What is more important than the company that lists the home is the quality of the entry in the MLS. Sellers should ask any agent to see examples of their listings on the MLS along with other outside sites to compare quality of photos, accuracy and comments that would pique a buyer’s interest. This is where buyers are looking and what they are looking for.”
Myth: Sellers Should Not Pay the Buyer’s Closing Costs
Fact Check by: Chris Carroll, Atlanta Intown Real Estate Services (Leverage Global Partners Member Brokerage)
The Facts: “The most qualified buyer may request the seller help with closing costs. Sellers can ask the buyer to raise the price above list price to give the seller the same net proceeds. Choosing the most qualified buyer results in a smoother sale with fewer delays.”
Myth: Overpricing Will Give Us More Room to Negotiate and Get Us a Higher Closing Price
Fact Check by: Ignacio Rodriguez, Westside Estate Agency (Leverage Global Partners Member Brokerage)
The Facts: “Truth is overpricing can be a very costly mistake — accumulating days on the market, a listing goes stale and closes much lower than if it had been listed at a realistic price. Buyers today have more data available at their fingertips than ever before and are very price sensitive. Consider under pricing instead —buyers recognize a good deal when they see one, giving you more attention, activity, and ultimately — offers. The better the perceived value is, the more offers you’ll receive, ultimately driving up the price to the real market value.”
Myth: All Agents Are The Same, Charge Too Much & Will Get You The Same Results
Fact Check by: Bruce Ailion, Realtor and Attorney RE/MAXTown and Country
The Facts: “You have real estate licensees and then you have Realtors who ascribe to a code of ethics and higher standard of business. For about the same price you may get someone with just a high school degree, a 60-120 hour course, nine months experience, and one transaction in their career or someone like me, a Realtor with nearly 40 years’ experience, a master’s degree in real estate and a doctorate in law with thousands of successful transactions. Real estate is one of the few areas where it really doesn’t cost any more to hire the very best. A top broker will net you more money, will protect you from issues you are not even aware of and steward the transaction to a successful outcome. Selecting the best qualified agent is the most important decision a seller will make in the home sales process.
Myth: Still Photos on the MLS Will be Enough to Market Your Property
Fact Check by: Mark Cianciulli, ESQ. Founder, The Crem Group
“Even though in rare occasions this may be true (e.g., homes in poor condition, priced well below market price, etc.), the marketing landscape in real estate has changed dramatically in recent years. The majority of buyers are beginning their home search online and must be drawn in and presented the unique features of a home in “new-age” ways. For instance, the benchmark is becoming: Getting professional photos taken of the property (i.e., high-quality resolution cameras), creating high-quality videos for your property that allow buyers to see different perspectives inside and outside the home (including views and close by amenities via drone footage), as well as 3D tour/floor plans of the home that allow buyers to navigate through the home at-will and in any direction they choose.”
Myth: Spring and Summer Are The Best Times to List
Fact Check by: Alison Bernstein, Founder & President Suburban Jungle
“Not True! Certain times of the year, we have tons of buyers circling, yet not enough inventory. Late summer and late fall are both great times to throw your gorgeous listing on the market — even though it is not prime ‘selling season’ your home will be sure to stand out!”
Over to You
Have a home selling myth you find yourself debunking over and over again? Let us know in the comments.