5 Real Estate Market Myths Today

Are you considering buying or selling a home in the Houston area?

As you get things started, you may find that many people want to comment on real estate. Suddenly, you’ll be getting a lot of tips on what it takes to purchase or sell in today’s market from your friends and family, social media, and even your Uber or Lyft driver.

But there’s a catch. Many of the so-called “advice” and “conventional wisdom” you can hear may potentially do more harm than good to you.

It’s time to distinguish reality from fiction so you can go into business with the courage and expertise you need to thrive.

Here are five common market misconception to be aware of for both buyers and sellers:

Myth #1: There’s a ‘Perfect’ Time to List Your Home for Sale

When you start thinking about selling your house, you’ll probably get many suggestions about the “right” time to do so. You may have heard that the best time to list is in the spring or summer when the demand is most involved. You might be advised to take a “wait and see” approach in other situations, deferring selling before the housing market becomes firm.

There are some seeds of reality in this myth, as there are in many others. Home prices, for example, have a tendency (though not always) to peak in the spring and early summer months, which can be a significant plus for sellers. When the weather is good, and people have more free time to commit to their real estate quest, it can be advantageous to have your listing ready to go.

There are, however, other factors to consider. What if you live in a highly competitive market? In this situation, listing while everyone else in your neighborhood is doing so could result in your property being ignored, causing your selling to drag on longer than you’d like. Is your home more likely to stand out if you list it in the fall or winter when inventory is usually lower, and buyers are more motivated?

What about waiting for the “ideal” market? The truth is that there isn’t such a thing, and it’s usually best to begin the process now while you and your real estate team can assess current market conditions. Although brokers may use forecasts and models to forecast the future, the reality is that market dynamics are constantly evolving and are influenced by various factors such as interest rates, political cycles, and weather.

The Actual Real Estate Fact: 

It’s essential to keep in mind that there is no one-size-fits-all approach to listing a home for sale. It’ll all come down to your schedule and the peculiarities of your local market. Working with a local professional broker is also the most effective way to understand market dynamics and develop a sales plan that will benefit your house.

Myth #2: As a Home Seller, You Should Always List The Price as High as Possible

When it comes to selling a property, it typically boils down to bargaining or seeking a middle ground between the buyer and the seller. Moreover, you’ll often hear that the traditional wisdom in negotiations is, to begin with, the highest possible number so that you have more of a “buffer” to come down in price over time. The strategy has merit, and it can work in the right situation, with the right customer, at the right time.

But the fact is that selling each home would necessitate a unique strategy. A good sale does not follow any hard and fast rules, and adopting the mentality that it is always right to target as high as possible can slow down your sale.

Understanding a variety of unique variables, such as the precise details of your property and market conditions in your local area, can help you determine the best price for your listing.

If there are many homes on the market in your neighborhood area or your price range, buyers would be drawn to the listings they perceive to be a better offer. Aiming too high could cause your home to sit on the market longer than necessary, resulting in you having to pay carrying costs. It may also force you to dramatically lower your asking price later on, resulting in you receiving even less than you had anticipated. At the same time, keep in mind that most home buyers look for homes in a specific price range (for example, $200-350K). If the home is priced too high, the target audience will never see it or be aware that it is for sale.

The Actual Real Estate Fact: 

A variety of specific and local considerations can go into determining the right price for your house. When it comes to selling your home, remember to think like a businessperson and rationalize items like pricing and deadlines. Prepare to collaborate closely with your broker and pay attention to their buying and selling recommendations in your market.

Myth #3: Home Buyers Should Always Start With a Low Offer

On the other hand, many sellers plan to make the lowest possible bid in any real estate deal. The idea is that by starting low, you’ll have more space to negotiate, particularly if you’re willing to raise your price for your ultimate “best and final” bid.

However, there are numerous ways in which this strategy could backfire for buyers. In some instances, sellers may refuse to accept offers that are too big. Many sellers would ignore unrealistically low offers even though there are no competing offers. Alternatively, they may be less likely to accept a lower price on their end. Some sellers can perceive an especially low opening bid as an offensive strategy, and they may respond in kind.

Making a bid isn’t something that can be taken lightly, just as pricing a home necessitates extensive research and study. Creating a winning bid depends on a variety of factors. Including your desires and needs as a buyer, as well as the particular circumstances of the market you’re purchasing in and the quality of the property you’re negotiating over.

The Actual Real Estate Fact: 

When it comes time to make a bid, it’s crucial to have a practical approach as a buyer. An experienced real estate broker would be a valuable asset, as they will be able to use their working knowledge of real estate and the local market to assist you in developing and presenting a solid bid.

Myth #4: Making Renovations to a Home Always Mean a Higher Home Value

Many homeowners invest a significant amount of money and time in modernizing or upgrading their homes over time. When it comes time to sell, many homeowners want to recoup every dollar they put into their house, plus some.

Renovations, on the other hand, don’t always add as much value as homeowners would like. It all boils down to a question of cost vs. benefit. Home improvement projects seldom yield a 100% return on investment (ROI), let alone prove lucrative when it comes time to sell your house.

When it comes time to put your house on the market, your home’s value will be calculated by a combination of factors. Your home’s appearance, feel, and functionality will all play a role in deciding its worth. However, outside of your influence, there are several factors, such as market conditions in your area and the valuation of comparable assets in your region.

This isn’t to say that homeowners shouldn’t make improvements and updates to their properties. In certain instances, cosmetic enhancements and improvements would suffice to bring your home up to date with comparable properties in your neighborhood. A home with numerous improvement projects can sell faster, saving you time and money in the form of carrying costs. It’s possible that being strategic about your home renovations would pay off. Investigate which home developments have the best return on investment, and speak with a local real estate broker who can provide helpful insight into what features buyers are looking for.

The Actual Real Estate Fact: 

When it comes to home improvement projects and renovations, be strategic. Examine the estimated returns on various projects and be realistic about what you can get from each one. If you have any doubts or concerns, talk to your real estate broker. An experienced broker will guide you in the right direction, whether it’s by providing industry knowledge or connecting you with local real estate professionals.

Myth #5: You’ll Save Money If You Don’t Use a Real Estate Broker

When it comes to real estate, you may hear that it’s best to go it alone as a buyer or seller. As a result, sellers will often try “FSBO” or “for sale by owner,” while buyers will go through the process of looking for a home and closing a deal on their own. Buyers and sellers who take this path always assume they can save money in the long run.

While handling a real estate transaction on your own may work in some circumstances, it is not the best option for most buyers and sellers. There are so many moving parts on both sides of a real estate deal that buying or selling a home can be extremely difficult. Buying and selling real estate is an incredibly complex process, governed by many state and local regulations and oversight.

A real estate agent is also the essential partner you have when entering the market, whether you’re purchasing or selling. Brokers bring to the table an unrivaled knowledge of markets and the overall real estate operation and expertise that can be extremely useful. Brokers also have access to a network of home specialists, including insurance agents, mortgage professionals, lawyers, contractors, and other brokers, that the general public does not.

Furthermore, real estate brokers, on average, make the real estate process quicker, simpler, and more profitable than doing it alone. In reality, according to a recent analysis of over 200,000 sales. FSBO listings sell for approximately 5.5 percent less than comparable properties sold through a listing broker—furthermore, FSBO homes sold for less than their estimated value on average. At the same time, broker-sold homes sold for more than their modeled value.

Also, buyers should keep in mind that the buyer’s agent is usually not paid a fee. Instead, they are compensated from the profits of the seller. As a result, through previous representation, a consumer saves no money and foregoes all of the advantages — negotiating skills, industry experience, an extensive network, and so on.

The Actual Real Estate Fact: 

For both buyers and sellers, a real estate broker may make it simpler. If you’re looking for a new home or planning to sell your current one, having an experienced and professional broker on your side helps you to tap into their specific resources and skill set, allowing you to optimize your time and money.

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