If you’re getting ready to sell your home, you might be hearing some common myths from family and friends (or even strangers). I’m here to bust some of these common myths with accurate information about what you can expect when you sell your home.
Myth #1: Overpricing a Home Gets a Higher Sale Price
It’s tempting to price your home as high as possible in an attempt to have some wiggle room for negotiation or to get a higher price.
The problem is that this can cause your home to languish on the market. People may just overlook an overpriced home rather than try to negotiate it down to a reasonable level. And the longer your home sits on the market, the less and less appealing it’s going to look to buyers.
Overpricing your home can actually lead to a lower final sale price than you would have gotten if you had priced it correctly from the get-go.
Myth #2: A Quick Offer Means Your Price Was Too Low
Sometimes people may feel that a quick offer means that they priced their home too low.
A correctly priced home that’s been marketed well will draw a lot of attention right away, since homes get the most attention in their first days of being on the market. If your market has especially limited inventory, you may get offers within hours of your home being on the market.
Myth #3: You Can Rely on Online Home Value Estimates
We’re so reliant on the internet to give us information that we sometimes forget that some information isn’t very accurate. This is very true of online home value estimates.
Sites like Zillow and Trulia will give you an estimate of your home’s value, but these estimates rely on an algorithm. That algorithm is more accurate in some parts of the country than it is in others. Its accuracy depends on the publicly available data about your home and recent home sales in your area.
They do not take into consideration any updates made to the home or the quality of the materials in the home.
These estimates can be off by a substantial amount, so it’s smart to realize that any online valuations are just ballpark estimates. For fun, plunk an address into Zillow, Trulia, Redfin, and Realtor.com and see how much the estimates vary. There’s no substitute for an expert agent’s analysis (and most agents will provide a comparative market analysis for free).
Myth #4: Home Improvements Pay for Themselves
On the surface, it makes sense that any home improvements you do before putting your home on the market will pay for themselves. A drastically improved kitchen or bathroom may seem to be well worth the money you spend.
The problem is that most home improvements don’t net 100% of what you spend on them. This yearly report shows you exactly what you can expect to get back for a particular improvement in your area. Are you surprised that a kitchen remodel will net you only 59% of what you spend?
However, that doesn’t mean that minor improvements aren’t a great idea! Simple changes can really improve the way your home looks. Think painting over the lime green wall in the den, cleaning dirty carpet, or swapping out a dated light fixture for something more modern.
Make sure to talk to a Realtor® about the changes they think are worth making. They can help you understand what home buyers in your market are looking for.
Myth #5: You Can Skip Minor Repairs Before Listing
On the flip side, some sellers think that minor issues with the home are so unnoticeable that people won’t care. After all, haven’t you been ignoring some of those issues for years?
If people come through your home and see a loose doorknob, a cracked window, or lightbulbs that don’t work, they’re likely to get the impression that you haven’t been taking care of your home.
It’s smart to walk through and make note of all those little things that have been bugging you. Then take a day and fix them!
Myth #6: Spring and Summer is the Only Time to Sell
There’s a pervasive myth that spring and summer are universally the best times to sell your home. But this isn’t necessarily true; the optimal time to sell a home depends a lot on the market you’re in.
Know your local market and don’t wait for the supposed “best” time to list. With a good Realtor®, you should be fine selling no matter when you need to do it. This is especially true if you’re in a hot market with high prices or limited inventory.
Myth #7: The Agent Keeps All the Commission
Some balk at paying a commission when selling a home, but the truth is that a commission check goes a lot of ways, not just to the listing agent.
Typically, the listing and buying agents split the commission. Actually, the commission is paid to the agent’s employing brokerage, which then pays the agent. And the brokerage keeps a portion of the commission (sometimes as high as 50% of the commission) and then splits the rest with the agent.
Don’t forget that your agent also has to pay to market your home, as well as pay for all of their business expenses, out of the commissions they make.
Myth #8: What You Paid for the Home Determines Your Price
You may be tempted to price your home based on how much you bought it for. Or maybe you’re tempted to price it based on how much you still owe on your mortgage.
Both would be a mistake. The market doesn’t care what you paid or how much you owe the bank. You should price your home based on what the market says it’s actually worth right now.
I hope this helps you feel a little more certain about selling your home! Best of luck no matter what the circumstances are.