There are many common misconceptions about the home buying and selling process. Whether you’re actively in the transaction or you’re simply a consumer of media, you’ve likely heard about countless tips and tricks in real estate whether they are accurate or not. The agents at Helen Adams Realty have the boots on the ground knowledge of the current market and are here to play the role of real estate myth busters! If these or other questions have been top of mind for you, give us a call. We are happy to guide you through the buying or selling process and answer any question.
Myth: “I don’t need to use a real estate agent to buy a house.”
Kyle Land, Lake Norman Office: When it comes to purchasing your next property, why wouldn’t you have a buyer’s agent involved? This person is there from start to finish with a consultation session to discuss needs and wants in your next home, the home search services that we offer through HAR, hyperlocal market data, and then guide you through all the documents to make an offer and handle all inspections and negotiations until you’re successfully at the closing table.
Myth: “In this hot seller’s market, I don’t need a REALTOR® to list my home - I can do it myself.”
Melissa Brown, Ballantyne Office: If sellers are not getting exposed to the entire MLS, they are missing out on a huge pool of eligible buyers who are ready, willing and able to pay good money for homes in this crazy market. If your home isn’t exposed to the vast MLS market, will the seller get the maximum value for their home? I don’t think so! Also, it’s easy to go under contract in this market - it’s not easy to make it to the closing table. The value of a REALTOR® to help you through the appraisal challenge and repair negotiations is important.
Myth: “In this hot seller’s market, I don’t need to complete any updates because I know my house will sell!”
Katherine Shermansky, Ballantyne Office: Sellers feel that their home will sell quickly without putting additional money into the home. They are correct in theory. However, due to the interest rates being at an all time low, more buyers are willing to come in and pay top dollar for homes that do not need any updating inside. The reason being, buyers would rather maximize their home purchase with a low interest rate and keep cash in an investment account since they will yield a much higher rate of return. Putting some money into getting your home updated is well worth the return. It gives sellers more opportunity not only to receive multiple offers but also to yield a much higher sales price.
Myth: “I have to put 20% down for my down payment.”
Kyle: There are multiple options when it comes to getting a mortgage for your next home. Down payments can range from 0-5% in most cases. Personally, the only 20% I've seen in recent years are those who are purchasing raw land or just had the extra funds to put down.
Chloe Faucher, Randolph Rd. Office: Many buyers are discouraged from purchasing a home because they believe that a 20% down payment is required. This is not true! Some loan programs allow buyers to put down as little as 3%. If a buyer puts down less than 20%, they will be required to pay a monthly Private Mortgage Insurance (PMI) premium until their mortgage balance reaches 78%. Some first time homebuyers delay their home purchase in order to put down 20% and avoid PMI, but when considering rising home and rent prices, as well as low interest rates, it may be more economical in the longrun to take on PMI for a period of time.
Myth: “Selling to an iBuyer (think: Zillow Offers, Opendoor) is cheaper.”
Chloe: When selling to an iBuyer, homeowners run the risk of leaving money on the table between service charges/fees, repair costs, and low offers. For example, Opendoor charges a 5% service fee and deducts costs for repairs they deem necessary from the seller's net proceeds. Zillow Offers charges a 6% fee in addition to a service charge ranging significantly from 1.5-7.9%, and they also deduct repair costs from the net proceeds.
As a comparison, when listing with a traditional real estate agent, sellers can expect to pay around 6% in brokerage fees. The listing agent will recommend repairs and improvements to make the home more marketable, but tackling these is at the seller's discretion. Sellers can expect buyers to make repair requests during their due diligence period (usually around 0-2% of the purchase price), but the seller isn't obligated to agree.
Additionally, by selling to an iBuyer, sellers miss the opportunity to take advantage of the competitive marketplace and obtain the highest possible price for their home.
Myth: “If I'm buying new construction, I don't need a buyer’s agent.”
Anna Fenno, Ballantyne Office: Yes, actually you do! The sales person in the office of that new neighborhood may be very nice, but remember they represent the seller - the builder. A buyer’s agent will represent you during the process of lot selection and negotiating on price and add-on's. A pre-drywall inspection is extremely important and having your own, not the builders inspector, is recommended. A good agent will have an inspector ready to go when your home is to that point. Assisting you as your advocate from finding the neighborhood, all the way through the process of the home being built and to the closing table is the value-add of having your own representation, through a buyer’s agent, on new construction.
Myth: “It’s cheaper to DIY for home projects.”
Melissa: If you’ve ever done a DIY project, you know there are always pitfalls - it always costs more than you think. Unless you are super handy and skilled at renovations, it is almost always less expensive to hire a pro and pay a contractor to come in later to fix what you’ve done wrong can cost a lot. The problem is, contractors are booked out because everyone is renovating versus moving. You have to be patient and wait for a good contractor. This is where an experienced REALTOR® can help - we have lists of experienced contractors who can help with any project.
Myth: “It's best to sell my home completely vacant.”
Anna: No, actually it's not! If you have already moved out (or are planning to) before you list your home, staging is a great way to go as it will help to sell your home faster and for more money. A good stager will use as much of a homeowners furniture to reduce the cost of renting those items. Staging a home creates an emotional response in buyers when they enter a home. They envision what the furniture set up could look like, the art, the details...staging works!