Note: This is the first of a 3-part series on real estate myths. There are many misconceptions when it comes to buying and selling Louisville real estate that I believe we can correct. If you have more specific questions, feel free to contact the LHB Editor.
Because there is so much information flooding our lives today, it’s more important than ever to distinguish truth from myth. Whether myths about foreclosures or myths about home improvement, we want you to be informed. Either that or team up with a Realtor who knows the difference.
Myth #1: Sellers should price their Louisville home higher than market value to allow for negotiation room.
Markets, real estate or other sectors, are constantly moving. When the market tilts towards the seller’s advantage, this might not be a myth at all. When it is a buyers market, there is a huge selection of homes and competition is fierce for each buyer’s attention.
Buyers look at an average of 8-14 homes before writing an offer. If a home seller prices his house above market value, that home may not “make the cut” to be one of these properties that a buyer will visit in person.
The longer a home is on the market, the greater the perception that the home is unwanted or undesirable. The thought process goes like this, “Don’t the best homes sell fast?” The answer is, “Yes they do.”
» Best Strategy: Get a solid Competitive Market Analysis (CMA) from your Realtor and price your home at or near market value. New listings have the most showings during the first 30 days. After that, traffic drops off considerably.
Myth #2: Selling a Louisville home For Sale By Owner (FSBO) makes the homeowner the most money.
There’s a reason why Realtors are more valued than ever. The market grew tougher and the number of homes sold by their owners dropped to its lowest level in years—just 9%. Twelve years ago 14% of all homes sold were FSBOs. (This includes transactions involving parties that knew each other, such as a parent selling a home to a child.)
Selling via this method is extremely difficult. In today’s real estate market, expertise is needed to best evaluate, price and promote a home to get it sold.
It’s also important to remember that if the homeowner doesn’t have a firm grasp on the true value of their home, they could accidentally under-price the property and lose money.
Lastly, most buyers understand what FSBO sellers are trying to do… save money. So when writing an offer on a FSBO property, home buyers are more likely to “low ball” and try to take a share of that unpaid commission for themselves.
» Best Strategy: Find a strong Realtor. Ask trusted friends and family for referrals. Also search online for top agents in your area.
Myth #3: Don’t update the home, just drop the asking price.
Remember when I said it was a tough market for Louisville home sellers? Yes, it’s still true. The goal for every online listing, virtual tour, or property profile is to get a buyer in the home. But they won’t come if the home doesn’t look appealing in the photos.
For example, replacing some old, dingy carpeting with brand new flooring does a couple of things. First, it removes a big negative and possible hindrance to a showing. Second, the update is now something that can be promoted, which encourages a possible visit. It’s a win-win!
When talking about what sells a home, the classic saying is “Location, location, location!” In today’s Louisville real estate market, it’s more likely to be “Condition, condition, condition!”
» Best Strategy: Ask a trusted real estate advisor which updates will give your Louisville home the best bang for the buck. Example, replacing your front door continues to rank the highest on Realtor surveys for return on investment for home improvements.