You’ve heard the stories: Maybe your neighbors sold their fixer-upper as is for $100,000 over asking price. Or your friends were deluged with crazed homebuyers engaged in a bidding war within 24 hours of putting their house on the market.
It’s no secret that today’s seller’s market is wilder and more competitive than it’s been in years, fueling sellers’ hopes of major profits if they list their own home, too. All of which could be true—but only if you gauge your market carefully, and handle your sale with care.
“The biggest issue I’m having when I talk to sellers is, they’re seeing stuff in the papers or hearing from their neighbors, ‘Oh, this house just got this absolutely crazy price, or this guy flipped a property for a huge profit,’” says Liz Hogan, vice president of luxury sales at Compass in South Florida. “Those stories are circulating because they’re the anomalies. Nonetheless, a lot of that chatter has made sellers think that even their home—which may just be a regular home and not a super spectacular listing—is going to get some crazy price. That’s not necessarily going to happen.”
For one, this strong seller’s market has started to show signs of softening, with fewer buyers and lower prices. This means sellers may need to reset their expectations.
To help home sellers separate fact from fiction, here’s a look at four myths you’ve probably heard about selling a home today, and why they might not be true for you. Plus, we’ve got some tips to adjust your strategies for the realities of today’s market so you can up the odds that your home actually does become the next success story on the block.
1. ‘You don’t need to renovate—buyers will take anything’
In such a hyperactive market, sellers may get lazy and expect to get a high price for their homes without making any repairs or upgrades. But Jason Gelios, a real estate agent with Community Choice Reality in Southeastern Michigan, says this could set you up for failure.
“Home sellers looking to get top dollar should not sell a home as is, even in this seller’s market,” he says.
Despite the limited housing inventory, high-priced homes that need too much work are a turnoff, since many of today’s buyers expect homes to be mostly move-in ready.
“Buyers today still want to walk into a clean home, one that has nice paint on the wall, that doesn’t have chipped-up countertops or banged-up refrigerators and toilets that aren’t working,” Hogan says.
The truth of the matter is this: A fresh coat of paint, tidying up the landscaping, and a good scrub-down are inexpensive upgrades that bring a return on investment of thousands of dollars when you sell. And don’t neglect minor things like replacing lightbulbs and fixing broken doorknobs. They count.
2. ‘You can price your house sky high and get that amount’
It’s true that home prices have been going up. According to the National Association of Realtors®, the average home price was $363,300 in June (the latest month data is available), 23% higher than a year earlier. That’s quite a rise, but don’t let those dollar signs get to your head.
“The market is hot, which makes sellers think they can just ask for whatever price they want and get it,” says Ruthie Assouline, a real estate broker with Compass in New York City and Miami. “That’s a myth, because it’s all supply and demand.”
Homes need to be priced realistically in line with what the market is asking, the type of home it is, and its condition.
“Just throwing something online and asking for a ridiculous price—you probably have to have the crème de la crème to be able to pull that off,” Assouline says.
Pricing too high also means the home could sit on the market for a while. Plus, Hogan says she’s starting to see buyers push back on the high prices by delaying their home search or not making offers, forcing some sellers to reduce their asking price.
3. ‘Sellers don’t need to market their listing much—it will sell’
Recently, Hogan says a client was interested in a multimillion-dollar home in Miami, but the listing featured only one smartphone photo of the exterior. She called the listing agent to ask if more images would be added; the agent said the owner said they didn’t need more photos since they were certain the home would sell fast.
“I’m like, for a $10 million home, you can’t spend $500 to take professional photos?” she says. “It’s crazy.”
This is a common sentiment these days. Some sellers think putting a lot of effort into online marketing is pointless, since the home is bound to sell quickly regardless of what they do. But consider this: Most homebuyers start their search online—so if your listing falls short, you just won’t get much attention.
Plus, Hogan says sellers aren’t always selling to local buyers who can drive by or are familiar with the area.
“Homes hitting the market without professional pictures, additional pertinent information, and other appealing amenities that could sway a buyer to choose their property is a huge error,” Gelios says.
Photos, videos, floor plans, 3D tours, and other details help homebuyers decide if a home is right for them and if they want to see it in person.
4. ‘In a bidding war, it’s a no-brainer to just pick the highest offer’
Bidding wars are common these days, with sellers receiving multiple offers with some over the asking price. Accepting the highest offer may be tempting, but it’s not always the best move.
“It’s terms versus price,” Hogan says. “A smart seller may take a little bit lower price to get much better terms.”
A lower offer that’s all cash, for instance, may be more attractive, since it eliminates the financing hurdle and could mean a quick closing. Or you may need extra time to stay in the home until you find somewhere to move.
Sellers should examine all factors of every offer, including a buyer’s finances, and not focus solely on price, Gelios says.
“Many home sellers have other motivators that could sway them toward choosing an offer,” he explains. “These could include longer occupancy, more flexible closing terms, or other outside-of-the-box offerings, like a credit toward the seller’s moving costs.”