As I sit down to think about how I want to shape my 2023 real estate business, I think about what I have learned in the real estate industry over the last decade and a half. I enjoy the real estate business and the people in it. I like the challenge as much as I love helping people move on to the next chapter in their life. But if I have learned anything in this business, it is that there is no shortage of real estate myths that exist from people outside the real estate industry.
This blog post will be about the myths I come across most often. And I will give a shout-out to my friend Katie Lance who posed this question to an army of real estate professionals which helped jog my memory.
Here are my favorite real estate myths.
It is an easy job.
The one thing I’ve learned from watching HGTV is that their real estate shows oversimplify every real estate transaction. In addition, they make real estate look much more glamorous than it is in real life. The fact is that in a real-life transaction, a real estate professional has to accomplish 182 tasks after a contract is accepted by both parties (the buyer and the seller)? The viewers rarely see one of these, let alone all 182.
Another issue is that the emotional toll the process can take often gets lost. Buying or selling a home is extremely personal. There is a lot of money involved. There is excitement for the buyer and sadness for the seller who may be closing a life chapter. And if there is distress in the sale (like in a divorce, death, or financial challenges), then the emotional component can be overwhelming. I have seen all of this at least once, if not often. And the bottom line is that the process can be anywhere from great to extremely difficult.
You don’t need an agent.
Sure, you can go it alone in real estate. But the fact is that you will still generate the same fees for the transaction. Subsequently, why wouldn’t you choose to have someone represent your interests throughout the process?
In Massachusetts, the commonly used listing agreement is issued by the Massachusetts Board of Realtors. It breaks out how much of the fee goes to the listing agent and how much goes to the buyer’s agent. If you are a buyer and don’t employ a buyer’s agent to work on your behalf, then you are forgoing that fee to the listing agent who could end up representing both you and the seller. Who do you think the listing agent will truly hold his/her allegiance to? It will be the seller.
As real estate agents, we have negotiated countless transactions. When it comes to negotiation, experience makes all the difference. Don’t take it on yourself to go up against long-standing, practiced, agents.
Another reason to work with an agent is to locate inventory. Lots of times agents (like myself) know about off-market properties. If I am working with a client on an exclusive basis, I can often find a home they would not have otherwise known is on the market. Buyers without representation will not have access to the resources professional real estate agents have.
You can sell your home yourself.
Yes, you can certainly sell your home yourself. However, statistics show that homes sold For Sale By Owner garner less than homes sold by an agent, even with all the fees included. In addition, selling your home yourself means you have less access to many of the tools needed to sell a home. I often employ a professional photo editor for top-notch photos. I do the same with the 3D tour of the home. I have access to Matterport and can use that in all of my marketing. And then there is my broker network. Agents talk to one another quite often. This is where I can presell a home prior to it coming on the market. If you opt to go it alone, you run the risk of shutting down access to these valuable channels.
I will buy with the listing agent.
I have seen more than one buyer think that they can get a better deal by working directly with the listing agent. The first thing to remember here is that the listing agent works for the seller and NOT YOU. So you are essentially paying someone (the listing agent) to work against you. I am never sure how this is a benefit to a home buyer.
The seller gets to keep the deposit.
In all my years of selling real estate, I have rarely seen the seller keep a deposit. The fact of the matter is that it would cost more to litigate a deposit battle than the deposit is worth. And while the legal battle rages on, the home becomes hard, if not impossible to sell due to the pending litigation. So, unless that contract violation is so egregious that the buyer just says keep the deposit, then the situation is usually simply negotiated to a resolution.
All brokerages are the same.
This is one of the larger myths. Here in Cohasset, the brokerage landscape runs from large corporate-owned companies to small boutiques owned by people who live and work in our community. What each of these brings to the table can vary in a myriad of ways from the style and quality of the marketing down to the level of service you will get from the listing agent and his/her firm. At some larger firms, your listing can equate to not much more than a number on a stat sheet. At a hyper-local boutique, every listing can matter and the level of service is more customized to the individual needs of the home and home seller.
Overpricing Your Home
This is a huge myth. Too many sellers feel as if they need to ask a big price for their home in an effort not to leave money on the table. Quite often this leads to a stale listing that sits on the market. And time on the market is never a seller’s best friend. In fact, when a home is underpriced, it attracts more interest, sells faster, and usually for more money. This is true because there is often a multiple-offer scenario that forces an offer up due to competition. I have seen both of these scenarios play out. As a home seller, you are better off pricing your home correctly from the start.
“But my Zestimate says my home is worth…” This is a phrase all real estate agents despise. All that Zillow is doing is using a computer-generated algorithm to estimate the value of your home. This algorithm takes in little, if any, local market knowledge. It has never seen your home, nor will it ever. A local agent who has toured your home, and similar homes that have sold recently will provide you with a more accurate opinion of value compared to a computer-generated algorithm.
An interesting fact I like to tell is that one of Zillow’s co-founders sold his house for 60% of his Zestimate. This speaks volumes about the value of a Zestimate vs. a locally generated comparative market analysis. Hyper-local knowledge makes your real estate experience all that much better.
There is a lot that happens in real estate that we don’t see on television. The process takes more time and effort than you would assume. Experience has taught me that no two transactions are alike just like no two buyers or sellers are alike. In the end, when between the emotional stakes and different personalities involved, you deserve a professional agent who understands, advocates, and represents your interests.