Debunking home selling myths
I recently met with a client about listing her home, and found that a friend of hers had talked with her the previous week and given her oodles of advice on selling her home—much of it untrue. Although her friend had good intentions, she was actually hindering her friend’s home sale. So today I thought I’d take the opportunity to debunk a few common myths we hear about selling a home.
Myth #1: There's no point in putting my home on the market until the spring. No one will buy it.
Happily, that's not the case, particularly now when many buyers are shopping to take advantage of historic low interest rates. Home buyers shop year round these days.
In fact, 473 single-family homes sold last fall and 283 single-family homes sold last winter, compare to 402 home sold in the spring.
The good news is that if you sell your home in the fall or winter you'll have fewer homes to compete against since inventory tends to be a little lower this time of year.
Myth #2: There's no need to update my home before putting it on the market. Buyers can just ask for money off the price if they see something that needs to be done.
There are a few problems with this approach. First, if the home looks dated, many people simply won't bother to book a showing. Second, buyers often grossly overestimate how much it will cost to make home updates, so leaving the work undone can actually cost you more. Third, if the home has been nicely updated it will very likely attract more buyers and help you increase the sale price.
Myth #3: I'll get 100% of my investment back on home updates.
The return on investment really depends on the upgrades you make. For example, adding an in-ground pool can add little value compared to upgrading the kitchen. The two reasons to make updates are to help maximize the value of your home—and help you to secure a buyer quickly.
The vast majority of home buyers are looking for a home in move-in condition, and many will pass in a home -- even a home with great potential -- because they either can't envision how it will look fixed up or because they don't want to hassle with making updates. Fortunately there are many updates that you can make very inexpensively that can make a huge difference.
Myth #4: You should paint rooms in white when you're selling your home.
Actually, that's not ideal. White looks very stark, particularly in photos. There are lots of other great color choices such as comfort grey or light tan that are neutral but bring some added cheer and warmth to the home. Your realtor and home stager should be able to provide advice on the best colors to use.
Myth #5: If a buyer receives a pre-approval letter from a lender, they’re fully approved to buy the home.
Getting a pre-approval letter is just the first step. The letter shows that the lender will approve a loan based on the information the buyer has provided but the buyer still needs to go through a more formal approval process to approve the loan on this specific home.
Once the offer on the home is accepted, the buyer will apply for a mortgage. The lender will order an appraisal of the home and will conduct a more in-depth review of the buyer's financial status (credit rating, employment, income, assets, etc.). Once this is done, they’ll issue a formal mortgage commitment letter verifying that they approve the loan.
Myth #6: My home should sell for its assessed value.
This is not always the case. Assessed values are historical in nature, while appraised values reflect comparable sales of homes within the past six months. When you’re interviewing realtors, ask them to provide a comparable market analysis of your home, and to provide data to backup the numbers.
Myth #7: The only thing your realtor needs to do to sell your home is put it in the MLS.
I would venture to say that if your realtor is only putting your home in the MLS, they’re doing you a disservice. Their job is to help you get the best price for your home. This means gaining maximum exposure for the home. This can be done in myriad ways, including mobile marketing, magazine ads, public and broker open houses, online promotion, e-newsletters, social media, direct mail, property videos, community videos, and any number of creative campaigns.
Do you have a real estate question? Contact Kyle Mann to learn more about selling your home in the Boston suburbs. Mann is a Realtor with Gibson Sotheby's International Realty.