The Top Real Estate Myths Your Clients Probably Believe (and How to Debunk Them)
Teachers. Lawyers. Real estate agents.
What do these professions have in common?
Answer: everyone who’s not a teacher, lawyer or real estate agent thinks they’re some kind of expert on these fields. Stereotypes and myths abound.
Your clients probably believe some myths or stereotypes about real estate. And while some of these myths are harmless (e.g., real-life real estate is just like reality television real estate), others can threaten the success of your business.
It’s the latter kind of real estate myth that we’re discussing — and busting — today.
Keep reading and dive into the real estate myths that your clients probably believe — and the best ways to debunk them.
Do All Home Improvements Before Listing
Plenty of homeowners believe that in order to get the most possible money for their home, they have to fix up every corner.
That means homeowners often spend big money on improvements that don’t always come with a return on investment. Buyers might not like the aesthetic or functional choices of the improvements (like extensive landscaping). Or the improvements might be useful but invisible (like an upgraded furnace).
The result: homeowners might be out money that never comes back to them. They might even turn down buyer offers because they feel so sure that an offer should reflect the value of their upgrades.
How to debunk this myth for your clients:
You have to start from the get go, when you first walk through their home. You want to be clear about what, if any, home improvements they should complete before they list and what projects just aren’t worth it. Be ready to make recommendations; bonus points if you have data to back them up.
And remember to always bring it back to the return on investment, which is all sellers have in mind. A $50,000 kitchen remodel might show well in listing photos, but a buyer would likely rather pay less for the home and do the job according to their own tastes.
Skip All Home Improvements Before Listing
And then there are sellers who believe the opposite to be true — that if the real estate market is hot enough, they don’t even have to lift a paint brush.
That may be true in cases where the home is already in excellent condition (or, on the other end of the spectrum, will without a doubt be gutted by the next owner) but most of the time, there are a few small, relatively inexpensive projects that pay off when it comes to a buyer’s overall impression of the home.
Things like repairing cracks in walls, replacing missing hardware, upgrading old light fixtures and giving a front door and garage a fresh coat of paint to improve curb appeal.
How to debunk this myth for your clients:
You want to remind your clients that it’s not necessarily about nabbing a higher selling price; it’s about creating a good impression that gets potential buyers in the door and then makes them feel confident in making an offer.
Be ready to make recommendations for specific, strategic improvements and come prepared with budget suggestions. You want to show your clients that completing a few small home improvements (or even just opting for home staging) can be surprisingly transformative without having to break the bank.
Always Start With a Low Offer
Maybe it’s the fault of real estate reality television, but so many buyers come into the process believing that starting with a low offer is par for the course. And that by doing so, they’ll be in the position to successfully negotiate with the seller.
Not. True.
What these misled buyers aren’t considering is that a low offer might ruin their chances of negotiating with the seller. A low offer might offend the seller, and they might decide not to counter-offer and not to entertain any future offers from that buyer.
Of course, no two listings are the same. But generally speaking, a first offer should at least feel fair and within the realm of possibility.
How to debunk this myth for your clients:
Buyers who believe this real estate myth need to be reminded of the risk involved with a lowball offer. Once they consider that their offer might mean they lose out on any chance of successfully purchasing the home, they’ll likely reconsider.
Of course, there will still be overconfident buyers who want to move ahead with a potentially offensive offer. Your best line of defense is empathy and data.
You know where they’re coming from (they want the best house for the best price; who doesn’t?), and you can tell them that. You should also show them data that helps establish why their lowball offer is a bad idea. Prepare comparables and their selling prices.
Go With the Agent Who Wants to List Your House For the Highest Price
Sellers who interview and consider multiple listing agents before making their final decision often consider several factors, including personality fit, reputation and the strategy the agents suggest in their listing presentations.
But other sellers only pay attention to one thing: what the agent says they’d like to list the house for. Whoever names the highest number gets the listing.
Of course, any good agent knows this is a bad strategy. The right price — the best price — isn’t always the highest price.
How to debunk this myth for your clients:
There’s not much you can do if a potential client’s decision to go with another agent is already firm. But if they let you know while they’re still deliberating that a different agent had suggested a higher listing price, you still have an opportunity to win their business.
You can respectfully, but convincingly, explain to your client why the highest price doesn’t mean the best selling experience. Use sold data for comparable properties to show why your suggestion makes the most sense and to back up your selling strategy.
You can also explain the risks involved with listing at a high price that doesn’t take market factors into account; namely, an extended time on the market that costs money, frustrating offers, and a final selling price that’s below list.
For Sale By Owner Always Saves Money
This one’s a classic. There are sellers who buy into many of the stereotypes about real estate agents (e.g., they’re all rich, they barely work for the money, and so on) and as such, when it comes time to sell their house, they’re more interested in listing themselves.
Why? Because they believe that no matter what, selling their home privately will always keep the most possible money in their pockets.
How to debunk this myth for your clients:
If a seller is meeting with you, you still have a chance to change their minds about selling privately.
How? By walking them through the reasons why sellers still choose to work with real estate agents, such as an agent’s access to a pool of eager buyers, their arsenal of real estate marketing tools and their expertise in navigating difficult situations.
Don’t make it personal; stick to facts, data and results that they can’t ignore.
What’s the top real estate misconception that YOU hear from clients?
Last Updated on June 28, 2024 by myRealPage
