You may not have realized this, but more than half of today’s home sellers are selling a home for the first time, according to Zillow’s latest Consumer Housing Trends Report.
That’s a whole lot of new home sellers who may not understand the pitfalls that await them because they either don’t understand the process of selling a home or they’ve bought into the myths they read on the internet.
If you hope to sell your home during your preferred timeframe and for the most money possible, you need to:
- Fully understand the selling process, from the paperwork to the various methods of marketing your home
- Choose the right real estate agent
- Divorce yourself from your emotions
- Don’t buy into the myths you’ll hear from others
You would be surprised how many first-time and even some repeat home sellers harbor certain myths. Let’s bust some of those right now.
Myth #1; Zillow’s “Zestimates” are accurate
Zillow.com, an online real estate aggregator, turns 13 years old this year. From the beginning, consumers have at times misunderstood the site’s limitations when it comes to home valuation.
In fact, too many buyers and sellers rely on the company’s “Zestimates” when deciding what their home is worth.
Zillow isn’t a real estate brokerage company and doesn’t employ real estate agents who go through each home on the market, which is what is required to help pinpoint a home’s current market value.
Nor is Zillow able to seek out, via the MLS, valid and relevant comparables of each home, another requirement when determining market value.
Instead, it relies on an algorhythm – an automated valuation tool that uses public records and information from “users.” Zillow points out, “The Zestimate is an estimate, not an exact home value. It’s not designed to replace the opinion and expertise of a local real estate professional. Zillow doesn’t actually visit every home in the nation to account for renovations or custom features. The Zestimate is calculated using an algorithm based on public data. Nationwide, the Zestimate’s median accuracy rate is 8 percent. In some areas, the Zestimate is amazingly close to the actual sold price. In other areas, it isn’t. Errors are just as likely to be above the sale price as below the sale price.”
Far from exact, Zillow’s Zestimates are frequently way off the mark. In fact, in 2016, former Zillow CEO Spencer Rascoff sold his Seattle, Washington home for 40 percent less than its Zestimate.
That particular Zestimate was off by $700,000
The discrepancy illustrates perfectly why a home must be evaluated in person to come up with an appropriate market value.
That Zestimates are accurate is a myth.
Myth #2; Real estate agents are all alike
This is the myth that may lead real estate consumers to choose the first agent they speak with, a very common practice according to studies performed by the National Association of Realtors.
All licensed real estate agents attend real estate training, which teaches them the legal aspects of selling real property. That’s it.
It doesn’t teach them how to effectively sell a home. It doesn’t teach them marketing techniques.
So, while an agent will walk away from those classes with an understanding of riparian rights, he or she may be clueless as to how to actually sell a home.
The differences among agents is astounding when you look into it. Some feel that a sign, some photos on their I-phone, and a lockbox will do the trick. Others do a bit more. Then, there are listing agents who’ve studied and used various marketing methods, and through trial and error, have found one that is proven and effective.
The home seller is paying the same fee for the novice agent as he or she would for the powerhouse agent.
Not choosing the latter is like paying for a new Rolls-Royce Phantom and driving a 2011 Ford Fiesta off the lot.
Take your time when interviewing listing agents — we are definitely not all alike.
Myth #3; Videos are an important aspect of home marketing
While 88 percent of homebuyers use online websites when searching for homes, according to a National Association of Realtors survey, only 26 percent of them say they visited an online video site.
In fact, among the online tools that buyers find “very useful”, “video” didn’t even make the list:
- Interactive maps
- Virtual tours
- Neighborhood information
Listing videos don’t offer the flexibility of virtual tours, which is most likely why homebuyers prefer the latter.
Now with the 3-D tours, buyers are able to perform a virtual walkthrough of the home, viewing what is important to them, not what’s important to the ‘guy videoing the house’ for the agent!
Yes, you’ll no doubt run up against internet claims that all homes must have a listing video – a myth started by those selling video production, with no statistics to back up their claims.
Myth #4; I don’t need to replace the appliances, I’ll just give the buyer a credit so he can do it himself
If you plan on including your appliances in the sale of your home, and they need replacing, do so before the home goes on the market. Many buyer’s can’t “see” what the house will look like with those new appliances in the home. Also, it caps your cost. If you offer a ‘credit,’ 9 times out of 10 the buyer will want a larger credit than it would have cost you to just put the new appliances in the house to begin with!
A recent survey of housing trends finds that nearly half of homebuyers find energy efficiency a desirable feature. Efficiency-rated windows are popular as well as energy-efficient appliances.
These features are strong selling points. So much so that 75 percent of millennial homebuyers place “updated appliances” at the top of their list of “must-haves,” according to a Bank of America survey.
Myth #5; I don’t need to clean and/or stage the garage
While you will hear a lot about how bathrooms and kitchens “sell homes,” it’s the garage that nearly half of homebuyers say is their hot button, according to research from Zolo.com
Garages are extremely important to millennial homebuyer as well, according to that Bank of America survey, with 65 percent of them valuing a garage over an extra bedroom.
Yet far too many home sellers use the garage for their excess “stuff” when preparing the home for the market.
The last time I moved I found that Habitat will pick up donations. Declutter and simplify your life!
In reality, the wisest choice is to rent a storage unit or a pod.
We’re happy to answer any questions you may have about the home selling process. Reach out to us anytime.