At Daniel and Julie’s appearance this month on Twin Cities Live they had a great interview on some of the many myths heard from buyers and sellers around the Twin Cities. With so many items to deal with when buying or selling don’t forget to review these common myths before deciding to make that next big move.
MYTH: All sellers will pay your closing costs
This is sometimes true but is definitely not customary. The seller will look at the net price of the offer so if you are asking for them to pay closing costs your offer price is actually less. Asking for closing costs can sometimes challenge an appraisal. As a buyer you are essentially increasing the price/mortgage of your home so you don’t have to bring as much cash to closing. If you write an offer on a property assuming the sellers are going to agree to your request to pay your closing costs, you may be disappointed and may lose out on the house.
MYTH: When selling a home price it to leave room for negotiation
This can actually hurt you and cause you to get less in the long run. You will miss your target market by being out of the price range those buyers are searching in.You can drop the price but once you do that you have already accumulated days on market and your home does not look as desirable and buyers wonder why it has been on the market for a longer period of time so they naturally feel there is something wrong with it. Buyers are suspicious of properties that have sat on the market for more than 3 weeks to a month. It is better to price your home competitively so you get a good offer (or multiple offers) quickly.
MYTH: Online home valuations are accurate, like Zillow’s Zestimate
Websites like Zillow and Trulia are a handy tool for buyers and sellers. According to the Desrochers, you can’t always believe what they say. Zillow states that the Zestimate is Zillow’s estimated market value computed using a propriety formula. The hard thing with a zestimate is that is it just some computer generated number using area statistics and tax records. Very rarely do we come across homes that sell for what their Zestimate states their home is worth. What sellers need to remember is Zillow has never been in your home, they don’t know what type of condition it is in, what updates you have done, if it’s on a cul-de-sac backing up to woods or on a busy road with huge power lines in the backyard.
If you look at the fine print on Zillow, they state their Zestimates can be off as much as 20%. In Hennepin County they state their median error rate as 9.6%. That’s $50,000 to $100,000 on a $500,000 house.
MYTH: Always include your exterior photo first on your listing
Not necessarily! Instead, include your best feature first. If the kitchen is the highlight, make sure that’s the first thing a potential buyer sees. Include exterior photos, but don’t put them first if they aren’t the best thing about your home.
Watch the entire Twin Cities Live segment below: