You mention you’re buying or selling property to one person and the next minute, you have everyone knocking on your door with advice. If buying and selling your home a few times made you an expert, we’d be out of a job! There are so many tall tales and outdated assumptions being told that it’s hard to know what is fact and fiction, so we’ve set out to bust some of the more common real estate myths we hear every day:
1. Never sell in the winter
This is one of the most common myths that has been circulating for as long as I can remember. The assumption is that the only people who put their homes on the market when the weather is coldest are poor, desperate souls who will accept any price to pay for some firewood! This is simply not true. There are not specific months or seasons to sell property as Australia’s property market is active year-round (even during footy season!).
2. Young adults have no hope of home ownership
This idea that it’s ‘impossible’ for young people to buy their first home is certainly a myth. We see young people buy their first, second, third-plus properties every day, showing grit and determination. It’s simply a matter of smart finance, understanding expectations and hard work to achieve a long-term goal.
3. All properties go to auction
Auctions are often the most talked about method of selling, but the facts are that in a booming market only about 25 % of all homes get auctioned. Don’t be fooled by the media and stakeholders, such as auction agents, who make it appear to be more.
4. Auctions get the highest price
Public auctions are a popular way to buy and sell property, but most people enter the process blind. For an auction to work, you need at least two serious buyers. Many sellers get so caught up with the urgency, competition and excitement of the auction, they don’t realise these buyers aren’t bidding at the highest price they’re willing to pay. In a public auction, the underbidder pays their highest price, but the final bidder may have many thousands or even tens of thousands dollars more they were willing to spend. Consider the other methods of selling rather than just following the masses.
5. Worst house on the best street
Many people think it’s all about position. Certainly, position is a big factor, but the exterior look of the home, including style, condition, property potential (planning and zoning) and size of land all contribute. If the home isn’t the norm for the area, then it’s unlikely you will get the standard growth. For example buying a 1970s brick veneer house in a street filled with Victorian terraces is not advisable.
6. The property must be presented like a show home
This is unnecessary and really only promoted by incompetent agents who can’t sell homes as they are and by companies who have something to gain. Homes that are neat and clean will be just as effective!
7. We need to spend money on advertising
Most people don’t realise a lot of advertising actually benefits the agent by promoting and profiling themselves. Agents who sell in a particular suburb ask vendors to pay substantial advertising and marketing fees to find buyers and then repeat this exercise on a house just around the corner. Why do vendors need to keep paying all this extra money to find buyers? Shouldn’t these real estate offices and agents keep records of all the buyers they’ve previously advertised to time and time again? We like to think of advertising costs as an incompetence tax!
8. Buying in a ‘hot spot’ means I can’t fail
The reason an area is labelled as an up and coming hot spot is usually because of some sort of change, such as infrastructure developments, that will lead to short sharp price growth. But in these areas where growth has been consistently below average, growth is likely to just revert back to below par levels in the long term.
9. A property is worth what a buyer will pay
A property is actually worth what a skilled negotiator can persuade a buyer to pay. It’s important to note this opportunity isn’t available via public auction, unless the property gets passed in.
10. If we renovate before we sell, we’ll get more money
Most people tend to think renovations will increase the value of their home, but this isn’t always the case. The key is to know the current value of your home, do your homework and hire the experts for advice. Consider what changes you think are necessary, then estimate what the cost will be. Of course the more changes you can implement yourself, such as tidying, rubbish removal, painting, cleaning and minor maintenance, the less your costs will be. Once you have established the current value of your home and you know the improvement costs, add the two together – do you really think you can sell now for that amount or ideally more-than that total?
11. I don’t need a Section 32 until a buyer is found
Remember, the buyer may be anxious to resolve the purchase and may not wish to wait until you have all your paperwork in order. We recommend organising a conveyancer or solicitor before finding a buyer so everything is ready to go.
12. I won’t sell unless I get exactly the price I want
Unfortunately, the price you want is not associated with the value of your home. There’s a very clear distinction between value and seller expectations. However, if you do your research, have your property professionally (and independently) valued and allow yourself to step back and really look at your home ‘warts and all,’ you’ll discover what the approximate value is. Consider if you know anyone looking to buy a property for more than market value? Would you pay over market value for a home? No you wouldn’t, so don’t expect buyers to.