The real estate industry has more than its fair share of myths and preconceived notions, which can often impact negatively on the success of a transaction
“A myth can be defined as ‘any invented story, idea, or concept’ and that’s exactly what many of the misconceptions about our industry are – notions that have become entrenched through their retelling over time,” says Steve Thomas, secure estate specialist, Lew Geffen Sotheby’s International Realty in Cape Town’s Southern Suburbs.
“And although some of these tall tales may be harmless, others can severely hamper a buyer’s or seller’s success and can easily lead to errors in judgement which can prove costly, both in time and money,” he says. According to Thomas, some of the most common misconceptions, and potential pitfalls resulting from them, are the following:
Myth 1: Overpricing a home results in a higher sale price
When potential buyers begin their search for a new home, it’s usually online and they will filter their search to select properties that suit their needs and are within their budget range. So, not only will your property take longer to sell when it’s overpriced, buyers will notice that your property has been on the market for some time and will begin to wonder what’s wrong with it. “I cannot emphasise this enough, especially in the current market – correctly pricing a home within its market is key to realising a quick sale at the best possible price.”
Myth 2: A quick offer means the property was priced too low
It’s not uncommon for buyers to be less than thrilled when they receive an offer very soon after listing and to start questioning the agent’s valuation. However, in most cases quite the opposite is true. After extensive comparison shopping online, serious buyers will have seen everything that’s for sale and have a good idea of pricing, so when they see a new listing that meets their needs and is priced right, they’ll immediately enquire.
Myth 3: Open houses are essential to selling your home
“With digital technology now allowing us to advertise homes in much more detail with multiple photos and even virtual walk-throughs, most serious buyers will compile a short list after an online search before contacting the agents to view by appointment.” Making a sale at an open house is becoming increasingly rare as it can attract nosy neighbours, and people who are thinking of possibly buying but ‘just looking’ for now.
Myth 4: Agents will say and do anything to close a deal
It’s certainly true that the most successful agents are those with the gift of the gab and a talent for selling. “There will always be a few charlatans trying their luck, but they don’t last long, especially in reputable, established agencies. Not only are agents held to a strict code of conduct with a multitude of rules and regulations, they also rely heavily on referral and word-of-mouth business. Those who are less than ethical and professional will soon fall by the wayside,” he says.
Myth 5: The real estate agent offering the lowest commission is the best option
Times are tough and it’s understandable that many buyers want to negotiate the commission rate and most agents will oblige. However, if an agent offers to significantly reduce their commission upfront, it should be regarded as a red flag. It takes many long hours off work over several months to sell a home from listing to transfer. Furthermore, a good agent will negotiate on your behalf to achieve a sale for the best possible price and will strive to protect your interests at every point. In other words, they earn their commission and they know they’re worth, and are unlikely to slash 50% off the rate.
Myth 6: You can completely rely on online valuations
“Although some things, like the initial search for a new home, can confidently be done online, the human element is still critical in other steps in the sale or purchase process, such as property valuations and pricing. Popping online for an approximate estimate of the value of your property is an easy solution, but once you decide to sell, a market-related valuation is critical – one compiled by an experienced agent with a solid track record and knowledge of the area.
Myth 7: Home improvements pay for themselves
While certain upgrades and improvements can significantly increase the value of a property, there’s also a possibility of over-capitalising. “First establish the current value of your home and property prices in your area, as neighbourhoods generally have a threshold up to which buyers and renters are willing to pay. Also find out what trends and home features are most popular.”
Myth 8: A home doesn’t need to be prepped for sale
The truth is that even a brand new build that has never been lived in will attract more interest if staged with furniture. Prospective buyers should easily imagine themselves living in the space. A property can often benefit from a fresh coat of paint, having the garden tidied and a vase of fragrant flowers placed in the entrance hall. Thomas concludes, “The decision to buy a home is not only a financial one; it’s strongly influenced by emotion and it’s therefore essential to engage buyers emotionally by highlighting your home’s best features and making it as appealing as possible.”