Sometimes it's not easy to know what's reality and what's not. How many times during this Presidential Election season did we see a meme about one of the candidate with a quote they never said? But that's how rumors and falsehoods get spread. Someone says it once, and keeps saying it, so it must be true, right? Not always.
The real estate industry is no different. There's plenty of falsehoods circulated around, usually by FSBO websites, buyers who research incorrectly, or sellers who think they know more about real estate than their realtor. Here's some of the top myths finally put to bed.
I'll Buy a Home On My Own So I Don't Have To Pay a Realtor
This is probably the biggest myth out there about the home buying process. As I explain in my video, the realtor is the one person you DON'T PAY during the entire home buying process. We work for you at no cost to you. The sellers pay the commissions to both Realtors in the transaction. And while one might assume because the seller is paying us we are just going to encourage you to pay more so we get paid more, not true either. I can't speak for all Realtors, but I work on referrals. If I don't do a good job during the process, you won't refer your friends, family, and co-workers to me later on, and you won't use me again. If I do a great job, even if I get paid less on your transaction, the likelihood of receiving referral business from you increases. Also, remember it's not a good idea to call the agent on the sign of the house you want to buy either. All homebuyers need to understand they don't pay us, and it only benefits you to use us to your advantage.
Let's Price My Home Higher Than It's Worth To Allow Room For Negotiations
No. Just no. The simple fact is homes which are priced correctly sell faster and for more money. Pricing it over what it's worth will end up requiring a reduction, maybe a second reduction to what it's really worth, and then you'll end up getting lower offers because the home has been on the market way too long and appears stale. Some realtors do in fact price the home too high on purpose in order to just get a listing and have their face in the yard to get buyer leads. As unethical as it sounds, people do fall for it. Make sure someone can prove why the home is worth much higher than anyone else is saying. Appraisals do matter, so it needs to be price accurately.
I Don't Need To Speak To a Lender Until I Find a House To Buy
Getting approved for a mortgage is ALWAYS the first step in the home buying process. Without the approval from a lender, you won't be able to have the maximum price you're able to afford, nor will you be able to prove you can afford to pay for the home to the listing agent when we write an offer. Most good realtors will not show homes to, much less write offers for, clients who have not taken this step. If you don't qualify for a mortgage yet, lenders can usually let you know what it is hurting your ability to qualify and tell you how to rectify it. There's plenty of reasons why this is the first thing you should always do, and not all lenders are the same either. Make sure to get a referral from your realtor.
Realtors Just Put a Sign in the Yard and the Home Online, so I Can Do That Myself and Save the Commission
Don't get me wrong, For Sale By Owner homes can be sold. Not every single home is sold by a Realtor. Just about all of them are, but not all. Most buyers do in fact use a realtor, as I stated above it's free of charge, so you should have your own representation. Realtors do a heck of a lot more than just put a sign in the yard and the home on the MLS though. For starters, FSBO sellers cannot put their home on the MLS without a Realtor. You might be able to do it on third party sites, but not the MLS. Since it's the single biggest website home buyers use, don't you think that's kind of crucial? We are also getting pictures taken by a professional (at least I do), we might have to get the home staged, pre-market the home to other realtors through word of mouth or by emails, and make sure all the proper paperwork is gathered before it's listed. There's more, but I don't want to write a novel here. Then after it's listed we are still marketing the home to prospective buyers and other realtors, following up on showings, negotiating on your behalf, and handling all the paperwork which comes after. Again, there's more. Websites like OpenDoor have convinced some people it's easier just to sell to cash investor buyers and be done with it. It might be, but you'd be taking a much lower payout and paying much higher fees than you would be with a Realtor. Real estate is the most litigious field out there, and in a lawsuit-happy environment is it worth it to you to forget something, or fail to disclose something to a buyer, and end up losing everything you made and more? C'mon, man!
So if you're in the market to buy a home, Contact Me Today! I can help you get set up with mortgage and insurance people to make sure you're able to buy a home and have the best coverage.
You can also get a copy of my Home Buyers Handbook when buying to learn about the process!