Remember when you were a teenager and you thought you knew more than your parents about life? Well, sometimes clients have that same attitude toward their real estate agent. In recent years it has become even worse due to the excess amount of information online that may or may not be accurate. This can be frustrating for experts like you, who have spent countless hours in classes and have years of real experience under your belt. This problem is much easier to manage when you understand what common beliefs your clients might have and you are prepared to explain why that might not be the case. First, let’s look at 3 buying myths that need busting:
Finding a home is the first step.
Unfortunately, this myth might have already done its damage before the buyer gets to you. It’s all too common for shoppers to go out and find their dream home in their dream neighborhood, and then call you expecting to make it all a reality. More often than not, heartbreak will be soon to follow. The very first thing you should tell buyers is NOT to make a list of their must-haves, but to get pre-approved for a loan. As fun as it is to browse what’s out there, setting the buyer up for realistic expectations will help everyone avoid a let-down.
A 20% down-payment is needed.
This myth is likely passed down from generations before us. Luckily, most lenders will accept down payments much lower than 20%. If the buyer is eligible for an FHA loan, their down payment could be as low as 3.5%! There are also options out there for down payment assistance that your buyers could explore and apply for. Don’t let the 20% down myth hold anyone back!
The only up-front cost is the down-payment.
Thinking the down-payment is the only up-front cost is like thinking you are only responsible for your kids for 18 years. HA! Let buyers know that there will be additional closing costs, taxes, inspection fees, insurance payments, and more that will be due when they sign that dotted line. This should be made clear before ANY offer is made. Now, let’s address 3 selling myths your clients may believe:
Sellers should expect to get their asking price, or close to it.
Let’s assume you read our previous blog, Convincing Them It’s Worth Less Than They Think, and your sellers priced their home at fair market value. Now you must tell them that they still should expect their first offer to be below asking price. Unless they are in a low-inventory market, most buyers will test the seller’s level of motivation, and their willingness to negotiate. Make sure sellers are prepared for this likelihood, and don’t let them give a hard pass on any offer without writing a counter.
Remodeling is a necessity if you want to sell.
While upgrades here and there could boost the home’s desirability, don’t let clients go overboard. If all appliances are functioning and not noticeably outdated, there shouldn’t be any reason to replace them. Remodeling any room can be very expensive and it’s not guaranteed sellers will get that money back on the sale of their home. Use your expertise to determine if any major changes should be made, or if strategic staging will be enough to sell.
Once an offer is accepted, they can stop maintaining the home.
This is an easy trap to fall into. The home is sold, they are moving out, no need to keep watering the lawn! Caution your clients against this mindset. There is always the possibility of a deal falling through for a multitude of reasons, and then they will have to start over. Tell clients to slowly pack their things, if possible, and keep taking care of the home until the very last paper is signed. It’s always better to plan for the worst case scenario. Once you set clients straight and get these myths debunked, you will have earned their trust and the rest of the deal will come a little easier. They can be tough conversations to have, but well worth it!