3 Real Estate Misconceptions Debunked
Sometimes it can be hard to separate fact from fiction, especially when you’ve heard something time and time again. I’m personally guilty of believing more than a handful of myths, from bagged milk is only available in Canada — you can find it in the U.K., Israel and Russia — to it takes seven years for your body to digest gum if swallowed. When it comes to real estate, there are a number of misconceptions. Here are three of the most common ones debunked.
Myth 1: Negotiate the Realtor’s Commission to Net More Profit
There’s no harm asking your Realtor if they’re willing to reduce their commission, particularly if selling since you’re footing the bill for both the listing agent and cooperating brokerage that represents the buyer. However, it may not be in your best interest if your agent passes part of the price cut on, which they’ll likely do. Even though it’s a breach of the industry’s code of ethics and can result in a fine, some Realtors may steer their buyer clients toward higher listed commission properties, resulting in fewer interested buyers seeing your home. Or they may show the lower commission properties with less enthusiasm, which is also bad news. So, instead of asking your Realtor to lower their fee for service, find out what add-ons they offer. This may include covering the cost of staging, in whole or part, or paying for a pre-listing home inspection, which details the exact condition of your property, provides a guide when making repairs and improvements, and improves prospective buyers’ confidence in making the purchase.
Myth 2: Open Houses are a Waste of Time
Sure, some Realtors hold open houses to find new clients. And they’re often attended by nosy neighbours and lookie-loos that have no interest in purchasing your home. But many bona fide buyers who attend open houses have already been pre-approved for a mortgage and are therefore ready to make an offer, accounting for 7% of home sales. While this figure is not high, there are other benefits of holding an open house, particularly shortly after listing your property. It generates attention — more eyes on your home often equates to a faster sale — and provides your Realtor a valuable opportunity to obtain feedback from agents and the public that may hinder or hasten a quick sale.
Myth 3: Never Accept the First Offer
It’s normal to anxiously await news of an offer after you’ve listed your home for sale, perhaps even more so in a buyer’s market. When one comes in, your initial reaction is excitement. But this can quickly change to disappointment if the offer amount is not what you were expecting. However, you should not discount it as oftentimes, the first offer is the best offer. (Remember, the longer your home stays on the market, the more a buyer may try to negotiate on price.) Look at the contents of the offer, including the closing date, deposit amount and conditions like financing, and give it serious consideration. Instead of outright rejection, you could sign back a counter offer in which you’ve changed terms of the original deal, including price. This negotiating tactic shows that you’re willing to work with the current buyer.