When it comes to real estate, people still hold on to a host of tired, old-school beliefs that are hard to shake off. But to ensure a successful sale, sellers need to be aware of the current process. Despite the abundance of information that’s out there about selling a home — along with numerous TV shows highlighting everything from flipping, renovating, buying and selling — sellers still maintain a lot of old-school beliefs when it comes to putting their property on the market.
These beliefs can lead to a long and difficult process. When reality doesn’t meet expectations, your property might not sell as a result. So, here some outdated seller beliefs — busted.
- ‘If I price it high, they will still come’
Despite the emphasis on pricing correctly the first time, many sellers still subscribe to the idea that they can price a property as high as they want, and buyers will come to see it. After all, they can always reduce the price later, and a buyer can still make an offer, right?
Unfortunately, this theory does not play out as a seller expects. The home usually sits with little showing traffic, and the feedback is that it’s overpriced. When this happens, the seller comes up with a million other reasons as to why the home is not getting the attention it deserves from the marketing, property descriptions, photos, video, where it turns up on consumer search sites, etc.
The reality is, when you price a home too high, the buyers that are looking in the same price range as the home can afford more and usually want something else. You risk eliminating the very buyers the home would be an ideal fit for.
The price sends a signal to potential buyers and agents as to what kind of seller you are — realistic or unrealistic, flexible or difficult. So, take the right pricing decision.
‘Open houses bring ready, willing and able buyers’
Before the proliferation of the internet, open houses were heavily relied upon as a marketing tool to generate potential buyers. COVID-19 aside, buyers are more aware than ever of properties for sale as a result of listings syndicating from property websites. Their phones chime with the latest market activity on properties.
Although buyers have attended open houses during pre-pandemic times and may be venturing out in those markets that are actually hosting them, the reality is that most open houses tend to bring out more curiosity seekers and neighbors than buyers who are ready to buy now.
In some cases, buyers coming through may have an agent, but don’t want to share too much information with the hosting agent as to who they are or what their status is. That’s not to say that open houses (in person or virtual) don’t have their place in an overall marketing strategy. They do. However, sellers should not heavily rely on them to generate a buyer when their home is not selling.
‘Why do I need to substantially improve my home before putting it on the market? It is what it is’
The great debate over what to fix, change and improve before putting a home on the market. The agent’s recommendations can seem endless. Many sellers still believe they shouldn’t have to do those things or not nearly to the level of what their agent is suggesting. After all, a buyer is going to come in and do what they want anyway. “Why do I need to give them new appliances and countertops in the kitchen or even new flooring?” They think. “Repairs? What repairs?
As a seller, you never get a second chance to make a first impression. If you start off on the market on the wrong foot, you’ll have a very difficult time capturing genuine buyers who would’ve been interested in your home had you done the necessary changes recommended by your agent. Failing to properly prepare your home for sale may communicate the message that your home isn’t maintained and is in need of a lot of repairs. It makes the buyer wonder what else may be seriously wrong that they can’t see.
In short, it might look like a money pit, and it will cause buyers to eliminate it or make a low offer. Even if the improvements or repairs are not costly, a couple of thousand dirhams — or even a few hundred dirhams — spent could net a much stronger offer price because you can’t assume buyers have a realistic grasp of the costs involved to fix up the house. After doing prep-for-sale work, many sellers think they can raise their asking price because they simply repaired or replaced things that needed to be done in the first place. Again, it does not work like that. The market won’t pay more for maintenance, but it will result in better viewings and the likelihood of strong offers.
‘Show me the money’
Many sellers still believe that whatever improvements they’ve put into their home automatically translates into a higher selling price. The reality is, the market will never pay you like for like for improvements you’ve made, and some things might be too taste-specific to motivate a buyer to pay more. Pools are a great example of this. It’s no secret that the cost of building a pool can easily hit AED 200,000 or more, based on size, the type of decking, screen, heater etc.
At a certain point, going over the top with renovations or additional features is not going to command a certain amount of money over the highest comparable sales. Although it might help the home’s appeal and overall marketability, the custom kitchen with taste-specific finishes — no matter how full of brand names it is — will not necessarily command a premium with buyers. The media room complete with projector and surround sound may not be something every buyer has to have — or even wants.
They’re nice to have, but some things — like fancy summer kitchens, fire pits and garage cabinetry — don’t guarantee a buyer is going to pay over what recently closed homes have gone for, plus or minus adjustments. As a seller, it can be difficult to understand that what they feel contributes to the value of their home may be something that a buyer shrugs their shoulders at. Everyone has different priorities.
I can give a repairs allowance on completion
Speaking of repairs, many sellers think they can give an allowance toward the cost of replacing something that’s old or outdated in their home subject to an acceptable offer. Although the idea sounds practicable, this is very old-school thinking.
A seller can’t give a buyer an allowance on completion as part of the completion process. Any concession granted from a seller to a buyer is best accomplished by the seller either reducing the purchase price accordingly or paying a certain amount toward a buyer’s completion costs.
‘More marketing means more buyers willing to pay my price’
When a home isn’t selling, sellers might think they need more marketing. However, they often can’t really quantify what that means and don’t understand what tactics may or may not get tangible results. Sometimes, they have outdated beliefs as to what should make the phone ring off the hook with buyers.
As a listing agent we often have to educate sellers as to what marketing strategies and activities will work best with their property, and explain how it will be used to raise awareness and engage prospects. However, all the marketing in the world won’t attract the right buyers if the home is overpriced, doesn’t show well or looks unattractive in photos and video.
A seller may also think that the thousands of views their property garnered online should translate to numerous in-person showings. An agent has to spend time educating their sellers that while those stats are encouraging, the number of views from various websites does not mean that every person who’s clicked on the listing is a ready, willing and able buyer. People surf property websites from all over the world for various reasons. They might just be dreaming about the house they’re going to get “someday” rather than being actively in the market for one right now.
‘Every buyer who sees my home must want to buy it’
We wish. If only it were that straightforward. Some buyers are more specific and definitive than others. Some can articulate exactly what they want, whilst others have to use the property search to get some clarity on what’s important to them. If the buyer is a couple, there’s a chance they might not be on the same page — which makes the house hunt all that more difficult. Also, buyers are in varying stages of their search. A buyer who is initially exploring an area is likely going to take more time compared to someone who’s familiar with it.
Some buyers are on shorter time frames to make a decision, while others might be planning on taking their time. While it would be great if every buyer that saw a seller’s house was ready, willing and able to buy it right this minute, the reality is, it’s typically a process of elimination. The good news for sellers is that, given the current COVID-19 climate, buyers looking at homes for sale are likely more serious, ready, willing and able now compared to pre-pandemic times. Given what’s involved with showing properties today — safety precautions, travel restrictions, general hesitation and uncertainty — buyers are more focused on what they want. They’re making decisions in a shorter period of time.
People’s beliefs about real estate often stem from their own experiences, that of their family or friends, and of course what they see in the media, which tends to oversimplify a process that’s anything but simple. Outdated beliefs and misconceptions are common.