Buying or selling real estate is a much more complex process than many would imagine. Right off the bat, let’s debunk one of the greatest misconceptions about real estate: namely, you can deal with the entire real estate transaction on your own, without the help of a real estate agent.
Professional realtors possess a particular set of skills beneficial during the process. They manage online and offline marketing, help with contract negotiation, arrange for home inspections, and resolve loan application issues. Do you have what it takes to navigate these complex processes? Without training, the answer is probably no.
Additionally, there’s another common misconception that seems to be widespread. Many first or second-time home sellers seem to think that, once you’ve hired a real estate agent, the rest of the process is simply waiting for them to do all the work while you sit back and relax. This would be nice, but it’s rarely the case.
In this article, we’re going to be taking a closer look at these misconceptions, and telling you how things actually are in the world of real estate. Let’s get started!
Navigating through chaos
A real estate transaction is a lot like a 1,000 piece puzzle. Initially, all you see is a completely disorganized mess of incongruous elements in a state of chaotic disorder. At a glance, things are difficult and confusing, with no readily apparent way to make them less so.
Throughout the course of a real estate transaction, things are much the same. The real genius of an experienced real estate agent stands in coordinating the many factors in play and managing the negotiation process, fitting the pieces together, and then finally completing the puzzle by closing the deal.
Put yourself in a realtor’s shoes for a second, and try to imagine what it’s like to be in this position. You’ll soon realize that your clients have come up with quite unrealistic expectations from the upcoming business transaction. How does this unfold?
First off, your client will want the transaction closed as soon as possible with the best financial outcome. Secondly, they wish to avoid the whole ordeal without the least amount of personal involvement or investment. Thirdly, they expect an agent to care for every detail such as financing, mortgages, and insurance policies. And lastly, they show little to no inclination to compromise with the other parties involved.
An agent can’t perform a “money miracle”
Realtors must inform the client upfront about the current state of the economy, especially the local economy, which sets the market value of their private property. If you’re a home seller, you should understand the real estate market trends to see the bigger picture. You can’t raise feasible expectations based purely on something you heard in your neighborhood. One property sold in your area doesn’t qualify as standard. Also, don’t consider average home prices either.
Median house price vs. average home price
Median house prices will give you a more accurate overall picture than average prices. They’re the middle point for real estate prices in a given city, with half of the houses priced for less and half of those properties priced for more. Consequently, a few exceptions from the rule don’t affect the median price. Neither do certain houses that alter the perceived prices in a given housing market. Suppose your neighbor has sold their home for more money. This fact, however, doesn’t affect the median house price, only the average house price.
It’s the median price that helps buyers and sellers form a general view of the market. More people want to purchase a property than available ones if you see rising median prices. On the other hand, if you notice declining median home prices, you’re in a buyer’s market. In other words, there are more houses available than in demand.
Factors you can’t control
Location, climate, and local facilities available in the neighborhood will all affect the real estate’s listed price. Now, a competent realtor will know all these factors. And even if they obtain a favorable price, they can’t perform miracles with the cards they’ve been dealt. Neither can you outsmart nor influence the circumstances mentioned above out of your jurisdiction. Let’s see what you can do instead.
Your house won’t sell itself quickly
Selling a house isn’t easy peasy. Do you believe your home is the best on the market? As a result, will you be able to convert it into hard cash without even the minimum effort? Think again! No one will ask you to spend a fortune on spectacular improvements beforehand, for sure. Still, there are some inevitable tasks for you.
Fact: a house in tip-top shape sells better. That’s home selling 101. A real estate agent will inform you about how cost-effective house refurbishments will result in significantly increasing your property’s market value. More than that, carrying out these renovations in time could potentially point out common house problems. Before the home inspector comes knocking on your door, you must address these maintenance issues.
Indeed, you can be pretty meticulous about your home’s overall condition and look. You can start with permanent decluttering and necessary home renovations. You can then conclude with color and lighting ideas to enhance your interior design.
The good news is that you don’t have to do it all by yourself. We highly recommend relying on experts, such as interior and exterior designers and professional home repair contractors.
Be more flexible!
A property transaction, be it either selling or purchasing, is a pretty big commitment. Don’t rush into anything resembling recklessness. A realtor will do everything in their power to collate with the parties concerned. Still, this presupposes a certain degree of flexibility with appointments.
Open house events and virtual cyber tours need careful planning and timing too. To guarantee that everything goes smoothly, listen to your realtor’s suggestions. What should your house look like? What should you say when a client comes along? Honesty goes a long way with potential buyers. And finally, be open to negotiations price-wise if time is a sensitive issue for you.
A crash course on what not to do
Don’t listen to “reliable sources” other than your real estate agent. They will also recommend you refrain from the following:
- Overestimate your property and try to sell it at an exorbitant price. In fact, you’ll scare away many potential buyers!
- If a property becomes available on the market, there must be something wrong with it. In reality, it’s not your job to uncover a house’s hidden faults!
- Investing in real estate is like hanging by a thread. The truth is, buying a property might be your safest bet for the future.
- You must have a “gold mine” to invest in real estate. Once a mortgage broker evaluates your credit score favorably, you can apply for a loan based on your income potential.
- You consider only fully developed neighborhoods. In fact, you forget that these come at a higher cost of living.
Conclusion
Failed home inspections and disastrous appraisals still represent a significant roadblock to a successful closing. In addition, the legal research to uncover a property’s deed can also be bumpy. On the other hand, a buyer’s loan process may encounter difficulties too. In a nutshell, you will need an expert to address all possible and unpredictable setbacks.
The real estate business works best when there is team play. Your agent compliments you and will represent your interests. However, this presupposes specific responsibilities on your behalf too. For this reason, you should invest your fullest confidence in them. With their assistance and expertise, you can avoid giving in to popular misconceptions. Let them lead you along the way!