In an effort to make a profit, many sellers in the real estate market tend to fall for certain myths when it comes to putting a price on their home. This is especially true in places like Palm Beach where a record-setting $105 million deal went through for a property on Ocean Blvd. was closed just last December, underscoring the city’s booming local real estate market.
While market optimism is a good quality for any seller to have, it shouldn’t lead to believing in certain myths that can only prolong the sale of your home and make the process more difficult. If you have some concerns regarding the pricing of a home you want to sell, let’s discuss the truths behind some of real estate’s most prominent myths.
Myth: Renovations automatically result in a higher value or asking price.
Truth: Not all renovations have a positive ROI, which is why it’s important to remain cautious about this — especially given the capital involved, whether it’s coming from your savings or from a loan.
Desert Sun indicates that there are a variety of transformative renovations that can actually allow you to raise your asking price and result in a decent ROI. From simply replacing your garage door to going for a full kitchen remodel – which usually costs on average $1,750 and $20,830, respectively – there are a variety of options you can take in terms of renovating towards a higher market valuation. While doing a major renovation may necessitate dipping into your savings or taking on loans, the ROI could be worth the time, money, and effort to renovate. Fortunately, The Federal Housing Administration’s 203(k) program lets homeowners borrow up to $35,000, which can give you ample room to plan out renovations that can actually increase your ROI. If you’re aiming at major renovations but worried about making payments, there’s no shortage of personal loan options that can cushion the blow. Marcus details that personal loans can be used for debt consolidation and subsidizing other loans as well. However much you’re willing to spend or borrow, what’s important is to choose the renovations carefully so your capital doesn’t go to waste.
Myth: The longer you wait, the better the offers.
Truth: This is rarely the case. The more likely scenario is that the longer your home is on the market, the worse the offers will tend to get. In fact, according to real estate experts from The Balance, listings that have lingered on the market for over 30 days have a greater chance of being low-balled by buyers. Rather than prolonging a sale and waiting for a better offer, it might be better to compare the initial offers you’ve already gotten and choose the best one. A related myth is that getting immediate offers means that your price is too low – what this really means is that the price is likely just right, which is why serious buyers considered it in the first place.
Myth: Potential homeowners are mainly interested in the ‘bones’ of a house.
Truth: While the structural integrity of your house is an important and valid concern, it’s far from the only thing that buyers consider before making a decision. In our article ‘Revisit Your Listing’s Curb Appeal: Have You Done Enough?’ we detailed how the way your home looks from the outside can greatly influence whether or not buyers think that the price is right.
It’s important to remember that anyone who’s in the market for a house wants to be able to move in and not have to do any cosmetic or practical repairs for at least one year. While there are some buyers looking for a structure with ‘good bones’ that they can renovate to their liking, most buyers want a blank canvas.
Myth: You don’t need an agent to sell for the right price.
Truth: This is only true for agents themselves or those with at least a decade of professional experience in real estate. While agent commissions can seem like a lot, finding the right agent can make the process a lot less stressful, which is something you can’t put a price on. The right agent can not only help you identify the ideal price range to start listing your home, but also put you in touch with the right potential buyers. While you technically don’t need an agent to sell a home, that’s like saying that you don’t need a ship to cross the sea because you can swim.
Debunking these myths is the first step to landing an attractive offer that will satisfy both you and your potential homebuyer. The more accurately you can ascribe a value to your home, the smoother the process will be.
Guest post written for carolinecarter.com by Rania Jazzy