Certain pieces of real estate advice seem to have survived across the ages, but does that mean the advice is good? Tips like pricing your home above market value to what you really want have been so often repeated that they are now part of common wisdom. The problem with such advice, however, is that it never comes with any warnings or caveats about when the advice should be applied. There are a whole host of situations in which a good piece of advice will fail or, worse, is the opposite of what should be done. Here are few pieces of common real estate wisdom that should be questioned.
You Should Set Home Prices Higher
Evidence indicates that setting the price of your home too high can actually net you a lower sales price than had you set a more reasonable price. If a home’s value is set too high above the rest of the market, both agents and shoppers will ignore it and that means the home will be on the market for an extended period. Any home that sits for more than a few weeks will be assumed to have problems. In many cases, setting a fair or slightly low price can garner enough offers to start a bidding war, which will push the price higher.
Renovations Are Smart
Any renovation is a major investment in time, money, and frustration, so don’t jump into big projects thinking they will pay off when you sell your house. In general, you only recover about 68% of what you spend on a renovation when you sell a house. That means a renovation will actually cost you money, despite what all of the home improvement shows want you to believe. In fact, the only renovation that will get you a 100% return on investment is a new front door.
More Open Houses
A common myth, and one perpetuated by people who stage houses for a living, is that open houses sell properties. Data indicates that buyers who come during an open house rarely purchase the property. In truth, it is agents who benefit from open houses because they find more clients (people looking to buy/sell a home). For the homeowner, forgoing the open house makes no difference in terms of when the house sells or how much it sells for. The only type of open house that really works is the broker’s open house when other agents come to take a look at your home.
List Your Home in the Spring
Even in the worst of climates, the difference in price between homes sold in winter versus spring or summer is negligible. Sell your house when it is most convenient for you to do so. A home that shows well, is priced right, and is marketed effectively by a good agent will sell no matter what time of year it goes on the market. Remember, the Internet has drastically changed how homes are purchased, making it possible for people to see how a property looks no matter the time of year.
Your Agent Has Your Best Interests in Mind
According to http://www.jayneandmoss.co.uk/, some agents keep their customers best interests in mind and some have ulterior motives. Look for a firm that offers a consent agreement stating whose interests an agent represents. Always do your homework to find out which agents are the best. Word of mouth is the most effective research tool in this case.
Don’t think that you can get away without an agent though. Both buyers and sellers, on average, get better deals when agents are involved. There is a slim chance that you can save some money by going it alone, but most of the time it makes no difference and only leaves you to deal with all of the hassles yourself.
Common Sense or Evidence
In the end, let the evidence guide you. There are plenty of idioms and proverbs regarding how to best handle a real estate transaction and all of them are true, at one time or another. The trouble comes about from try to figure out which bits of advice are true in which situations. You’re better off forgoing the idioms entirely and using evidence about local, regional, and national markets to guide your decisions.
Madeleine Stanley has worked as a property agent for a number of years. She likes to share her ideas and insights on what you need to know about buying and selling property and is a regular writer online for a number of relevant websites.