Parade Magazine: “5 Biggest Real Estate Myths”
Yesterdays Parade magazine (That insert in-betwixt the Best Buy ad and all the coupons) had the article: “5 Biggest Real Estate Myths”. Parade doesn’t have the article posted online, but here are the “high” points:
1. Only a licensed real estate broker should sell your home.
Reality: The National Association of Realtors tends to propagate this assertation: You’d turn to a doctor when sick, so why not have a broker handle your most valued asset? But not everyone needs a third party. After all, who knows more about your home than you?…
Here’s your reality: It’s not about who knows the most about your house, it’s about who knows the most about the local market, who knows the most about marketing your property, who knows the most about exposing your house to the highest number of potential buyers.
If you’re going to go with the good ol’ doctor analogy, use it correctly. Why go to a doctor when you’re sick? After all, who knows more about your body than you? “Who knows more about your home?” It’s not about individual product knowledge, it’s about industry and market knowledge.
2. Your broker wants to get the highest price for your home.
Reality: Most brokers just want to get a deal done, says John T. Reed, author and publisher of the Real Estate Investor’s Monthly newsletter. “They’ll tell you, “I’ll be pushing for the higher price, because my commission is linked to the price”" he says. But agents may be pushing for the first reasonable offer…
Here’s your reality: No seller is going to turn down extra money, but not every seller has “Highest Price” as their primary motivation for selling. Just as many sellers would say “Quick Sale” is as important as “Highest Price”. If a broker goes along with a sellers false expectation of what their house is worth, he’s doing a disservice to his client, and possibly violating the Code of Ethics.
3. A lot credit score means you won’t qualify for a mortgage.
Reality: David Reed, a mortgage broker from Austin, Tex., and the author of Mortgage Confidentia, says the FICO credit score is just one of myriad factors considered in mortgage applications.
Here’s your reality: If you can’t pay your credit card bill, what makes you think you’ll be able to afford a mortgage? Get your credit in order and then buy your house.
4. The advertised mortgage rates are what you’ll get from a lender.
Reality: David Reed says this isn’t always the case, though he stresses that it is not a “bait and switch” tactic. Depending on market fluctuations or economic news, “interest rates can change throughout the day” he says.
Here’s your reality: That’s the same David Reed that’s a mortgage broker from point #3. Ok, dave. Doesn’t sound like a “bait and switch” at all.
5. Your home must be turned into a showplace before it’s listed.
Reality: Homes in mint condition are the first to be sold, but sellers must be careful not to overimprove. Some renovations can exceed what is customary for comparable homes in an area, while others may compromise a home’s character…
Here’s your reality: I’ve never sold a house in my life, but I’m guessing a clean house sells faster than a dirty one.
Does anyone still read Parade magazine? Seriously.
Heya Will
Good, straight talk in your comments. I found them because I read Parade & was looking an electronic version of their May on 4 on-line real estate article.
I have divorcing clients whose homes are often financial albatrosses, so am always on the lookout for good 3rd party material to help them better understand their options.