Look, we get it. Your home is not only likely to be your largest asset, but it is also something you have a biased opinion of. It’s a natural human tendency to think what we have is the best. We do it all the time, even when it defies logic. Our children are the smartest or best athletes, our favorite sports team can do no wrong, and the list goes on and on. Yes, your home is on that list. I’ve yet to meet anyone who had their home appraised and didn’t question if it should be worth more for some obscure reason that has no weight in reality.
Because of this bias, people regularly make several mistakes that actually wind up hurting their chances of getting top dollar instead of helping them. So, what are the biggest myths real estate agents and would-be FSBO (for sale by owner) warriors trying to make us believe? Let’s take a look:
Sentimental Value Does Not Equal Market Value
The sentimental value of living somewhere for an extended period of time, raising kids, and experiencing other life changes we associate with our homes is a real thing – for the homeowner. But the truth of the matter is, no one else really cares. That’s not to sound harsh, but sentimental value does not factor into how much money a bank will lend or how high of a monthly payment a buyer will make. After all, the sentiment lives with you and not the house. You cannot transfer those memories to a bank account or guarantee the new owner will be able to create anything similar.
That’s not to say your experiences don’t matter and that it would be a bad idea to share how much the home has meant for your family while accentuating how certain elements contributed to those memories. But, and this is a big but, do not fall into the trap of expecting them to factor any of it into their offering price or sway them into making an offer instead of moving on to the next home.
Staged Photo Shoots
Yes, the photos on Zillow or Realtor.com look amazing. Your house has probably never looked so good as it does after paying a hefty price to the photographer, and possibly even the virtual staging company that makes your empty rooms look like a perfectly furnished oasis. What most realtors and companies specializing in this space won’t tell you, though, is this strategy can cause more harm than good.
Have you ever bought something online because of how great the pictures looked, only for it to show up and be underwhelming? Maybe it was a hotel or restaurant you chose to book because the location and food looked too good not to try. So, what do you think happens when someone falls in love with your home online only to show up and realize it looked better on their screen? Sure, they may still like it, but some of their initial excitement is gone, and the likelihood of a lower offer or tougher negotiation is now far greater. It is far better to be in a position where the prospective buyer falls more in love with the house than they did while shopping.
Skip the Realtor
This is not one I am listing because I am in the real estate business. Of course, anyone can sell their home without a license or extensive knowledge of the market – just like anyone can change the oil on their own car or paint the side of their house. But just because you can do something doesn’t mean you should. Even as a licensed broker who has been part of dozens of transactions, I made the mistake of selling one of my own homes and will never do it again.
Why? Because realtors are the (hopefully) experts who can get you the best price while keeping you and your emotions out of the deal. There are many things that can slow down a real estate transaction and are even more capable of killing it entirely. When you are not used to dealing with these situations regularly to be intimately aware of how to proceed, it is easy to think you should start questioning the buyer’s intentions. And while some buyers and agents might play games to buy time or improve their negotiating position, often the delays in getting an appraisal back, a bank requesting more documents, or even attorneys reviewing contracts with both sides are routine. It is best to be patient instead of jumping to the next offer and starting the process over again.
Claiming “As-is” Avoids Haggling
This is a favorite of the inexperienced FSBO client. A friend of a friend told them putting the “as-is” description on their home will eliminate any potential negotiations on the part of potential buyers. “As-is” is just a nice way of telling the world the house has some maintenance and repair issues (just how serious they are could be anyone’s guess) and that you have set the price accordingly to avoid having a home inspection or accepting lower offers. Not only is this not true, it can actually backfire.
What you think is priced accordingly is likely to be considered overpriced by anyone who sees the term “as-is” as a red flag. After all, if you know the home might have some issues, why not let a buyer have a home inspection to anticipate how much extra money they may need to spend fixing the place up? The likelihood of a buyer simply accepting your classification without pushback is about as likely as buying a used car without a mechanic looking at it.
It can backfire by leading potential buyers to believe something is wrong with the house. This can wind up with them assuming the issues you do not want to be inspected are more severe than they really are and make them negotiate even harder. “As-is” also tends to attract investors (cash buyers looking to renovate and flip it for a profit) or scavengers (potential end users who will push you for the lowest price possible) who enjoy negotiating more than they care about getting the house.
Impossible to Upgrade Too Much
We have probably all seen the house I am describing. It is either the largest, brightest, or most eccentric one on the block or neighborhood. It sticks out like a sore thumb, whether for the right or wrong reasons, and it detracts from the other houses. The same can be said for the interior, no matter what the outside looks like. It is common knowledge that upgrades to rooms like bathrooms and kitchens will provide the largest return on investment. But even that stops at a certain point.
An appraiser will be hard-pressed to adjust the value of a home up to account for upgrades significantly out of the realm of what is customary for specific locations. What does that mean? Well, if you live in an area like Beverly Hills, where every home within a few-mile radius is all mega-mansions, you may have the expense of the Italian Marble tiles on the basement floor or solid gold door knobs reflected in the appraised value of your home. But when the cost of just your upgrades begins to rival the price of entire homes in your neighborhood, the value will not translate to the appraisal.
You Must Leave After Closing
While it is true many buyers would like you to get out right away so they can move in, it is actually not a requirement. Depending on how hot the market is and how badly the buyer wants to guarantee their offer is accepted, it has become much more commonplace for buyers to let sellers continue living in the house after closing. If the potential buyer loves your house enough and is not under any pressing constraint where they need to move immediately, do not hesitate to see if they will entertain a “post-closing possession.” Most who agree will probably expect some form of rent payment or a discount at closing, but if you structure the deal right, you might even secure a few weeks for free.
Location is Everything
Location, location, location. Yes, it does make a tremendous difference. But it is far from everything. A good location does not make a bad house desirable, nor does a bad location always make a good house undesirable. And just because there was something about the location you loved when you bought the home does not mean it will have the same appeal to your prospective buyers. Whereas having access to the main city center within walking distance could be a huge selling point for some, there are an equal number of potential buyers who would prefer to live off the beaten path where everything is a decent car ride away.
There are plenty of other innocent mistakes homeowners, and even inexperienced real estate agents, make when trying to sell a home. Some may go overlooked entirely, others can cause extra stress or delay the process, but the worst will cost you money or opportunity. If you are not the type of person who would perform surgery on yourself, please consider hiring a reputable professional to steer you clear of these and other pitfalls you might never see coming.