Real Estate Myths Dispelled
As I was generating this list of myths, one of the interesting things I found is that many perceptions of real estate are universal. From New Zealand to South Africa, you’ll find many of the same questions and thoughts, making it all the more important to work with a local agent who can give you meaningful information for your market.
If this house hasn’t sold yet, there must be something wrong with it, the sellers must be getting desperate, and I can get a good deal.
In 2019 the average days-on-market was 116 days. In 2020, we’ve seen an average of 100 days-on-market. While this means houses are selling much faster than previous years, this demonstrates that it isn’t abnormal for a house to sit on market for several months. Sellers are selling their homes for a variety of reasons and may be willing to hold out indefinitely for their price. Likewise, just because a house hasn’t sold doesn’t automatically mean there is anything wrong with it - a flaw to one buyer might be a desirable feature to another.
Real estate agents can only show their own listings.
Any licensed and active Washington real estate agent can theoretically show you any house listed in the state. That stated, there is a very practical reason why you would want to work with a local agent. As there are various Multiple Listing Services across the state, an agent not a member of your local MLS would have a difficult time accessing local key boxes to show you a home. As long as an agent is a member of your area MLS, they will be able to show you houses listed within that MLS. The important point is to find an agent you like and trust.
Real estate agents drive the price of houses up so they can get bigger commissions and sell more houses.
This is such a pervasive myth that I wrote a separate article here: https://www.jeffstrickler.com/resources/agents-and-home-pricing-myth-dispelled
Houses don’t sell in winter.
Houses sell almost every day of the year! Through August of 2020, we were averaging 66 house sales each month in Walla Walla. In January 2020, 62 houses sold. It’s not uncommon for our low point of the year to be in February / March, but realistically there’s no “down“ season.
You’ll save money working with the listing agent directly.
As a buyer, working with the agent of your choice isn’t costing you anything directly. Agent commissions are paid out of the sale of the house, not out of your pocket. On the other hand, the listing agent is not only getting paid out of the sale of the house but they are also representing the seller. While they can perform dual agency, there are often good reasons why you want to work with your own agent as a buyer.
Don’t buy the best home in the neighborhood.
Like many myths, there is some truth to this. For example, a luxury home in a neighborhood that was facing significant economic decline would be likely to depreciate. Likewise, sometimes homeowners will update their homes beyond a level that can be supported by the rest of the neighborhood. At the same time, just because a house has desirable updates or amenities relative to the neighborhood does not automatically make it a bad buy, especially if there are comparable properties within a close radius.
I don’t need an agent because [online site] gives me all the information.
I’m glad you have access to so many online sites providing useful information and enabling you to see many more houses virtually than we could see in person together. That stated, so long as real estate deals with immovable physical good like land and houses, it will remain hyperlocal and in-person. That is to say, agents frequently know about houses coming to market long before they reach these online sites, and have boots-on-the-ground knowledge of neighborhoods, values, and home history that can’t be replicated. An agent is there to be your advocate through the buying process, including negotiating and sharing localized knowledge of zoning and building codes.
We want to find a foreclosure so we can get a good deal.
Foreclosures never go as neatly as they do on TV. By the time a house actually reaches foreclosure, it has generally been uninhabited for an extended period of time, often deprived of electricity and left without basic maintenance. Even figuring out the rightful owner and process for making an offer can be arduous. This isn’t to say that there aren’t success stories, but for the majority of home buyers the effort isn’t worth the outcome compared to other properties.
It’s easy to put in septic and a well, right? I can sub-divide this property, right?
Maybe. Or maybe not. If you are considering building a home, especially one far off the grid, you need to be prepared for the work and potential surprise expenses that could accrue. Before buying any property, you should take into account current zoning restrictions and have sufficient funds for inspections and surveys well above a typical urban home purchase.