Real Estate Myths – Debunked
Even though we are all familiar with houses, not everyone understands how the housing market works. What’s even worse, there are a lot of myths and absurd lies surrounding it. From fake laws to silly beliefs about houses, and everything in between. Take a quick five and learn the truth about eight common myths regarding real estate.
1. The commissions asked by real estate brokers are set by law.
It just isn’t true, plain and simple. Your real estate broker has the right to ask you for a commission, but it’s not set by law – or set in stone, either. Your broker can ask for anything, whether it’s a percentage of the sale or a fixed amount of money. If the broker wishes to do so, he (or she) can work for free. It’s up to that person, not the law. There are no laws regarding commissions in real estate.
2. Doing an open house is the best strategy to sell.
It sounds counterintuitive, right? The truth is doing an open house does not guarantee you anything at all. Numbers don’t lie; studies show only 2% of sales are due to open houses.
Open houses don’t necessarily help you sell your house; it helps the realtor pick up new clients. It’s a free service for them, but it’s not as helpful to you. Open houses’ success ratio relationship to how much of a pain it is for the owner to do it, can make it a poor strategy.
3. Handshakes and verbal agreements are legally binding.
You can probably blame this one on movies and TV shows. In most states, if not all, anything real estate related lasting for more than a year – like a sale – needs to be properly documented, otherwise it cannot be enforced. Before you decide to believe anything, consult your attorney.
4. Doing a low-ball offer if you are a buyer (Or overpricing if you are a seller) leaves room for negotiation.
This one is in movies as well. We have all seen at least one movie character trying to ask for a million dollars for something worth less than a hundred. Lowballing a seller or asking a buyer for absurd amounts of money is only going to drive people away. The real estate market is like any other market, driven by buyers and sellers. If the opposite party can tell you are way off with the number you bring to the table, they are going to walk away and look for another opportunity – a real one.
5. The real estate market is always a great investment.
You will have to meet this one halfway. The real estate market COULD be a great investment if you know what you are doing – and if you can afford it. Fees, taxes and multiple costs related to a house are plenty and they can drown you. To get into the real estate business you need to do your research, know what you are doing and learn to adapt. We all learned an important lesson back in 2008.
6. Every real estate agent is out to get you.
A lot of people think their real estate agent is some sort of absurd used car salesman kind of guy trying to scam his – or her – way into a commission. The truth is, most real estate agents are nice people, worried about the good of the community. They decided to get into real estate because they love the job and helping someone find a home is an incredible feeling.
7. An approved mortgage is final.
If you are trying to secure the money to buy your house, you’d probably need a mortgage loan. Getting a mortgage can turn out to be a never-ending chore where you will only breathe again when you get your mortgage approved. But the truth is, a final mortgage can fall through. Even though it’s a rare occasion, mortgages can be revoked up until the escrow is set to close. Keep an eye on things until they are final – for real!
8. A bigger house means a better life.
Most people work hard five, six or seven days per week for eight hours or more. We give hours of our life away to achieve our goals – the most common one is owning a house. Most people dream about a mansion, but homes don’t have to be huge. Houses can be incredibly big, but a home needs you and your loved ones sharing moments together, not a big space.
Are you interested in learning more about real estate? Or are you looking for help in anything house market-related? Contact us! We offer real solutions in real-time. Don’t hesitate to ask, we are more than happy to help.