July 14, 2024 Breaking News, Latest News, and Videos

Five Myths About Buying a Home:

By Michael Edlen

In real estate, there are many myths about buying a home. Here are five of the most common and pervasive beliefs.

The highest bidder always gets the deal. Many buyers and even real estate agents assume that they will assure success if they offer the most money for a property. There are several other aspects that will make a significant difference in who wins when there are multiple offers. For example, the all-cash buyer with few and short contingency periods can be more appealing to the seller as compared with a buyer who may offer more but asks for time to get a loan. 

Price per square foot is the best way to decide the value of a home. Many people look mainly at how a home is priced on a per square foot basis, and appraisers essentially consider that as a major determinant of value, too. However, it can be a costly mistake to merely apply some number because other people have said it is the best method of deciding how much to offer. Some examples of other significant factors affecting value are: lot size, condition of the home and property, specific location, quality of views, proximity to sound sources or other environmental issues, etc. Also, even if most of these types of factors are roughly comparable, if the actual size of the home is not within 10% or so of the averages used in applying an average price per square foot, then the estimate is likely to be in error.

You have nice furniture so there is no need to stage your home. In fact, a skilled stager creates an “environment” that helps to evoke a more emotional and positive appeal for buyers. Sometime the placement of various furnishings or the combination of accessories can make a significant difference in how the home feels even if the changes are quite subtle or small.

You can save money by selling your home yourself. Of course, an owner can sell their own home and thus not need to pay a listing agent. However, most such sales are done by agents working with buyers, and they will still receive a commission. As buyer’s agents, their primary fiduciary responsibility is to the buyer, which most likely could disadvantage you as a seller in the negotiating process. Also, if you do sell it directly to a buyer, they may expect a 5-6 percent discount because you do not have an agent representing you.

There are also several potential risks of selling a home without an agent, due to today’s complex selling details. Numerous disclosures must be properly completed, various ordinances complied with, and comparable sales data prepared for appraisers.

All real estate agents are basically the same, and provide similar services. In fact, there are significant differences between various real estate agents even in the same office or community. For example, all agents will provide basic marketing such as putting the listing in the MLS, posting a sign and scheduling an open house for agents to preview the property. Some agents offer a more vigorous plan of action to help your property show well and to also provide maximum exposure in print and online.

Other major differences can impact your sale in the negotiation and escrow management phases. Some agents will have far greater expertise in negotiations and in finding creative solutions to issues that may arise. They may be more on-top of the little details that must be properly handled in order to complete the escrow, so you are not one of sellers who have the emotional experience an escrow falling out. That fall-out rate today is between 20-25 percent in most areas.

Michael Edlen has sold nearly $2 billion, 1,200 homes, and his team has more than 90 years combined experience in real estate. He and his team have represented hundreds of families in the downsizing process and provides real estate counseling services to prospective buyers and sellers. More insight and information are available at MichaelEdlen.com. He can be reached at 310.230.7373 or Michael@MichaelEdlen.com

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