SELLING: Vanquishing Myths --Set them straight

BY BARBARA BALLINGER

Who isn’t talking about real estate these days? All the talk’s great for business. But the abridged chatter that takes place at cocktail parties and around watercoolers can breed myths. Although many real estate myths contain some truth, they tend toward black and white rather than realistic gray. Here are some common myths and strategies for squaring them in consumers’ minds:

The first offer is always the best. It may turn out that way, particularly if buyers have been looking for a long time and want to avoid losing a purchase, says Fred Carmean, a salesperson with Coldwell Banker Residential Brokerage in Chicago.

But exceptions abound. In many parts of the country overheated markets spur multiple buyers to bid above the listing price, so it may not be wise for sellers to accept the first offer, says Nicole Sassaman, a developer who’s seen this happen in her hot Beverly Hills, Calif., turf.

Some buyers may also want to test sellers’ motivation by lowballing a bid, says Kenneth W. Edwards, GRI, broker and author of Your Successful Real Estate Career (American Management Association, 2003). He advises sellers to do the same and counteroffer high to find out how serious buyers are.

The key, adds Rob Henderson, CRS®, GRI, a broker-associate with ERA Shields Real Estate in Colorado Springs, Colo., is for sellers to avoid being insulted by a low bid and view it as a starting point to negotiate upward.

Lower commissions mean a higher net to sellers. It sounds logical, but it’s not always true. You get what you pay for, says Henderson. “A lot of sellers like the idea of a discounted commission until they learn that the salesperson won’t do much marketing, advertising, or negotiating,” which means the sellers might not reach their ideal outcome on the sale. So if you’re competing against a lower commission, be sure the sellers understand all that full and discounted service implies.

If a house sells in a few days, it was underpriced. Not necessarily, says Mark Nash, broker-associate with Coldwell Banker Residential Brokerage in Evanston, Ill., and author of The Original New Agent’s Guide to Starting & Succeeding in Real Estate (Thomson South-Western, 2004). A quick sale may mean the house was priced correctly for its market and that buyers did their homework. He suggests showing clients higher-priced, active comparables that are still sitting to confirm that the sellers hit a pricing bull’s-eye.

If you don’t want to make repairs, lower your price. Not the best idea, says Henderson. A house that doesn’t look its best may attract few or no offers, particularly if it’s in an upper bracket where buyers’ expectations run high, he says. “Condition remains critical to getting top dollar and moving a property fast,” says Sarah M. Funt, a salesperson with the Bethesda Gateway office of Long & Foster, REALTORS®, in Maryland.

Although it can be difficult to decide which repairs to tackle, Henderson advises sellers to focus on those that offer the quickest payback, such as fixing a leaky roof. If sellers continue to balk at making changes, suggest they at least clean, touch up peeling paint, and add lighting both inside and out.

Attorneys add an unnecessary complication. Attorneys and practitioners can clash over what’s a red flag. Yet an attorney might spot something a salesperson might not. Example: A developer’s contract for new construction includes different points than the typical board-approved contract and may throw some curves, says Nash. An attorney may be best able to protect the buyer’s legal interest. Some buyers also may appreciate the extra attention an attorney brings to transaction contracts.

Does this mean an attorney is always needed? No. Whether an attorney is required depends on state law. In most cases, you don’t need Joe Litigator,” Nash adds.

You don’t need a real estate practitioner. Since a home typically symbolizes family, hearth, and security, selling or buying a home often becomes an emotional roller-coaster. It’s also often the biggest purchase buyers will make. Having an involved but objective third party helps buyers and sellers stay focused on important business issues and advocate for their best interest. Remind consumers that REALTORS®, members of the National Association of REALTORS®, bring special value to the transaction because they subscribe to a strict Code of Ethics.

Buyers lose interest if sellers are present at showings. It’s better for sellers not to be on the premises so buyers can discuss concerns freely with their salesperson. But the sellers’ presence generally won’t derail serious interest, says Edwards. If sellers won’t leave, they should maintain a low profile, he says.

Don’t buy stigmatized property. Rather than letting buyers dismiss the property outright, help them evaluate the stigma in light of their needs and budget. A death in a house can be overlooked, particularly for the right location and price, says Funt. Also remind buyers that a stigma today may not be a stigma tomorrow: Time can assuage some psychological stigmas. But know your state law regarding which stigmas, if any, you must disclose and keep in mind that even if your buyer is willing to accept the stigma, others may not, which may adversely affect the value of the property on resale.

Although there’s a grain of truth to many myths, most are too generalized to be taken at face value. Teach your clients not to jump to conclusions but to weigh their concerns in light of all factors.

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QUOTE

All truths are easy to understand once they are discovered; the point is to discover them.
—Galileo Galilei (1564-1642)