Top Home Selling Myths Debunked

There is probably no other industry in the country that is resplendent with myths, then the residential home selling real estate industry. Not only are there myths on the sale-side and buy-side of a transaction, but there are ‘natural’ issues of home selling myths that may in fact be true, depending upon whose data you are more persuaded by, and/or your locality – since all real estate is local. For example, is it better to buy in the Spring or Summer? The answer is both, since given the temperature differentials in various parts of the country, it in fact may be better to sell in the Spring – or perhaps the Summer.

In order to make the myriad of myths slightly more digestible – given the vast array of myths in connection with the sale of a home, the following is a short list of common misnomers that are delineated as follows: short sales, staging, remodeling and pricing.

Short Sales –
Myth: Must a homeowner have missed loan payments to qualify for a short sale?
The short answer (pun intended), is that it depends. And it really does, since some lenders have different criteria when assessing whether or not missed payments qualify as a precursor for the go ahead with a short sale. Often, sophisticated software such as CoreLogic will help make that sale decision for the lender. This software is in fact an AVM that is so exacting in its valuation of a subject property, that it will nearly gauge the probability of a successful resale of the home – and at what price.

For some quick stats, short sales made up 5.9% of all home sales in 2013. According to Lambros Politis, co-author of The Complete Guide to Short Sales, the 2013 percentage represents an increase of 18% over 2012. Hence, an inquiry into a lender’s specific guidelines on short sales – since some lenders can be substantially more liberal than other banks, is a prudent measure. This is a situation wherein you don’t want to be left with the short stick.

Staging –
Myth: Staging is too expensive
The cost to stage your average sized home is approximately $1,800. However, depending upon the upgrades a homeowner decides upon, it can go beyond $5,000. On the other hand, it may hinge upon how you look upon the expense. The ideal way to view the expenditure, is to view it as a return on investment. In the bug picture, if it costs a few thousand dollars, how does that compare to a home price reduction of $5,000 to $10,000 as result of a home’s not so favorable impression amongst its prospective buying base?

The justification for staging can be illusionary if it is overthought, but just asks Shelly Hughes, President of Staging Buzz, a Media, PA based home staging business whose business it is to help home sellers sell faster and for a higher price. “The goal of any home staging project for both the home owner and home stager is to have home buyers fall in love with the home and create a sense of urgency to buy the home”, says Hughes.

Remodeling –
Myth: Remodeling your home is an investment
I suppose we can thank HGTV for the recent reconstituted myth that remodeling your home is an investment. And so to, the Home Depot’s and Lowe’s of the world are somewhat responsible, given their ever indulgent manifestation of home improvement product. Ultimately it comes down to how much you are willing to lose, vs. how much an investment you have made as a result of a home remodel, and what was actually remodeled. As an example, and according to the Remodeling Magazine’s 2010 Cost vs. Value report, below is an example of the ROI on specific remodels. The hard cold numbers do not lie, and in fact belie the myth that remodeling is a great investment. สร้างบ้าน

Best Bets on Remodel Payback:
*adding living space by converting an attic (83%).
*midrange deck additions (80%).
*minor kitchen remodel (79%).
*converting a basement (75%).

Worst Bets on Remodel Payback:
*major kitchen remodel (72%).
*new roof (67%).
*master-suite addition (61%).
*sunroom addition (57%).

Weighing in on this hotly contested issue of ‘bang for your buck’ rhetoric is Liz Weston of MSN Money and author of Remodeling? It’s a Waste of Money. “The home-improvement-as-investment myth, combined with easy credit, fueled an awful lot of irresponsible spending in the past few years.” Ultimately, Weston concludes, remodeling is a consumption of money, not an investment, per se.

Pricing –
Myth: The best strategy is to price your home high
This ranks as the all time high of home selling myths. Very simplistic and to a large extent a fairly reasonable presumption. However, the reality of it is that pricing a home too high is a certain death knell in selling one’s property at t’all. Not only is an over-priced property a kill joy to prospective home buyers, a home priced outside of the market range has the deleterious effect of stigmatizing the home as unsellable. The best strategy – price your property to sale, not priced to deter. Which doesn’t mean a little ‘price hype’ may not hurt – since 3% to 5% over market is considered permissible, but keep it reasonable if you decide to go down that road of assigning a high price in selling your home.

 

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