3 Real Estate Myths
The rebounding real estate market is resulting in many new and first time buyers and sellers. Because of their lack of hands on experience, these new buyers and sellers are entering the marketplace with a number of preconceived notions on how the real estate market works and what steps they will need to take along the way. Unfortunately, many of these notions come from “reality” TV and on the opinions and experiences of family and friends who previously bought or sold property.
A recent article reported on FoxBusiness.com, contains good advice for buyers and sellers in the 2014 year and discusses three real estate myths less experienced homebuyers and sellers may consider as truths.
Myth No. 1: Spring is the best time to sell a home
“Historically, real estate seasons were tied to summer and the end of the school year. Families were the typical buyers or sellers, and they wanted to move during the summer so their kids could start anew in September. That’s how spring became the prime selling season. It’s true there are still more homes for sale in the spring, which means there’s a lot of activity and buzz. But spring isn’t necessarily the best time to sell a home anymore.”
The reality: The best time to sell is during the holidays and right after
“Today, more than half of buyers aren’t married, and their decisions aren’t based upon school schedules. So spring isn’t as relevant as it used to be. Instead, the best time to sell a home is in November, December and January.”
Myth No. 2: Always start with your lowest offer
“There’s no generalized strategy for making an offer on a home anywhere, ever. A seller could have overpriced or underpriced the home on purpose. Some markets may be more competitive than others. But, somehow, in the back of the buyer’s head is good old Uncle Bob saying “never offer the full asking price.” That strategy might work if you’re trying to buy a used computer on eBay. And it worked in some real estate markets years ago. But times have changed.”
The reality: A low offer may get you nowhere fast
“A buyer in a strong, tight inventory market today would be wasting their time making low offers right from the start. It’s likely a home that’s priced right and shows well can receive multiple offers, sometimes even over the asking price. In this environment, constantly throwing in low offers because that’s what your Uncle Bob advised you to do will likely lead to disappointment.”
Myth No. 3: A cash offer trumps all
“There’s an assumption that a seller, considering two different offers, will always go with the cash offer because there’s less risk. As a result, many buyers who hear they’re competing with a cash offer assume they won’t get the home. They may not even make a formal offer. At the same time, many cash buyers assume that because they’re paying cash, they can make an offer below the asking price, and it will likely be accepted.”
The reality: A savvy seller may be more tempted by a solid financed offer
“Consider a seller with a home priced at $399,000. The seller receives two offers: One is a cash offer of $375,000. The other is an offer for the full asking price, with 25 percent down, a bank pre-approval letter and swift contingency periods.” It makes sense to go with the latter. Cash is not always king.
Learn your market
The most important piece of advice, consult with an experienced real estate agent. They will be able to help you not make assumptions that may hinder you in the long run. “Real estate is local. Every market is different, with its own customs.” Your agent will help you navigate the constant changing market and make the process as easy, enjoyable and beneficial as possible. Don;t fall prey to real estate myths.
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