This is a guest post from Philip Gilliam featuring thoughts and musings from the real estate industry brought to you by AgentDrive.
Real estate investments can be difficult and confusing, and for many people buying or selling a property is a task that can send shivers down their spine.
The process of buying and selling real estate does not have to be difficult as long as you are aware of some of the real estate misconceptions that make the rounds from time to time. These are myths that need to be debunked for buyers or sellers for them to have an accurate idea of what actually transpires in the real estate market.
Until you get this in sync with reality, you can really get hurt by these misconceptions and real estate myths.
Here are eight misconceptions to consider.
1) Lower commission means money is saved
The first myth people tend to mention involves commissions. Often a seller has the tendency to look for real estate agents who offer to charge them less commission because they think that this will save money. Well, it is important to remember the notion, “you pay for what you get”, and that is very true with real estate agents.
There is a reason some agents price themselves higher, and it has to do with their track record and their success in the industry.
Some real estate agents are initially starting out in business at a lower commission rate to establish themselves in business and so they can gain a positive reputation in the industry. Also, there can be circumstances where a lower commission rate is justified by even an experienced real estate agent.
Conversely, you should realize that if you choose to go with the newbies, you may be playing with fire when it comes to selling or purchasing what will be the most important asset for which you will be transacting in your entire life.
2) The agent’s goal is to obtain a higher selling price
The agent usually is not looking to obtain a higher selling price for a property when it comes to their client buying a home. An agent realizes that if their client ends up not buying a home for a reasonable price that they can afford and is within their budget, the agent will go home with nothing. Instead, they want you to buy what is best for you, at the best price possible, so the sale will go forward smoothly and you will recommend them to other prospective clients.
If they cause you to pay a higher price than necessary now, you will end up very unhappy, and that means the end of the line for them as far as future sales and referrals are concerned.
You should not assume the agent is out to get as much commission as they possibly can, because in reality, most agents have your best interest at heart.
3) Spring is the best time for real estate sales
This is something a lot of people believe and is basically untrue. While it is true that many people do sell their homes in Spring, this is not the only time to sell your home because in reality homes sell year round. Numerous people have sold in the winter time and have done well for themselves because the truth of the matter is there is always someone looking to buy homes.
In fact, if your home is one of the few properties currently on the market, you are going to have a better chance to attract potential buyers, and you will have a greater likelihood of selling your home more quickly than you would in an inventory rich market.
4) Cash offers are best
A lot of people think they should be going after cash offers because they yield the best result. While this is true in one sense, a cash offer is not always the best option because often someone making cash offers has the tendency to try to low-ball the price with the enticement of a quick sale. Once again, the primary goal is to complete the sale of your home and ignoring a higher offer because it is not cash-based is a serious mistake.
5) The best agents always sell at the highest initial price point for the home
Another myth a lot of sellers tend to believe is that they need to go with an agent who offers to sell their home at the highest price point possible. You should realize that often the agents who are coming in with a lower price point for your home are simply being realistic about your home’s actual value. A good agent will always look around at other homes in your area for sale and find an “average” price point before they offer the price for which they feel you should put a house on the market. This is often the right price point.
However, if you blindly go with an agent who agrees to initially list your home at a higher price, this could delay the sale of your home and eventually cause you to drop the selling price down to a realistic point anyway.
6) You can easily sell your home without an agent
The next myth has to do with selling your home on your own without enlisting the help of a real estate agent. While it is true that you can sometimes successfully sell your own home, you will find that it is not easy to go through all of the hurdles that come along and that a good real estate agent knows how to handle. Real estate agents have done this for years and know what it takes to get the job done.
They will understand the legalities and how to make the deal happen, so you come out on the better end of things. Also, a good real estate agent can be more unbiased about someone who tries to low-ball an offer or is critical of your decorating and can keep all of the parties involved objective and on track during the selling process.
7) Realtors receive kickbacks
This is another misconception that makes the rounds because some people assume the industry is working through kickbacks which is a complete misconception. Real estate agent have a code of ethics for which they follow and they are governed by very strict laws in most states as to what they can and cannot do in relation to accepting money “under the table”.
While it is true that in any profession there are dishonest individuals who break the rules and cause rumors about kickbacks and illegal activities to circulate and sometimes even make the news, by in large, most real estate agents and brokers are professionals that value their reputation and industry far too much to be involved in kickbacks or other illegal activities.
8) The market will only go up
A final misconception we would like to cover in this article is that the market for homes will only go up. We have the huge real estate bust in 2008 to quickly disprove this myth. While overall, everything does get more expensive due to inflation, in fact when evaluated over a finite time period, real estate prices can go down and are not always on an upwards trajectory. In reality, a local market can go up and down based on a number of factors that are too numerous to even list in this article.
We want to be quick to point out that real estate has proven to be the best long-term investment available to the average individual because over a long period of time, values of real estate have increased, and obviously everyone needs a place to live. But do not assume that they will necessarily go up during your own personal sales cycle, because real estate “bubbles” do burst from time to time and based on your personal timing to sell your property, you may find yourself in a downturn real estate market when you actually sell.
These are just some of the misconceptions into which people fall prey, and can lead to poor decisions on their part both in selling and purchasing real estate. You simply have to remain aware of what issues are real and what are myths and be properly prepared to make the right decisions based on correct information. Just remember the old adage, “Knowledge is power”.
About the Author:
Phillip Gilliam has been writing articles on real estate for many years and is recognized as an expert author in an extensive and diverse range of topics and subjects. Phil has also been developing, selling and marketing a wide range of business, financial and technical products since the beginning of his career www.hausvu.com.
