Real estate’s been one of the hottest topics in the news for the last seven years. CNN, The New York Times, and most other major news outlets have gone from covering housing-related stories to creating dedicated channels where consumer can scan headlines and “assess” the state of the market.
The upside of this trend is consumers have the ample opportunity to find out about national trends in the market. The downside is that “scanning” doesn’t make you an expert and can create some seriously twisted misconceptions about what’s happening both nationally and locally.
Here are four of the 2014 myths that may have your buyer and seller clients in the wrong (or slightly skewed) mindset about today’s market.
Myth 1: You Have to Sell to Move On
Talks of inventory shortages, price increases, and a more normal housing market are conjuring thoughts of selling among many property owners. Why? They want to profit off of their investment and move up to something bigger or better.
Unfortunately, the most common debate—to sell or not to sell—leaves out a great option in today’s market; becoming a landlord. Your seller prospects who show up wanting to list to get in to their next property may need a reality check.
Use resources like the rent vs. buy calculator and Trulia rental search results to show what they could be making in rental income. This may open up a new opportunity to profit and land you an instant buyer client who is primed and ready to move.
Myth 2: Buying Today Has Less Short-Term Risk
Prices are up, interest rates are down, buying must be “safe” again, right? Wrong.
During market upturns many buyers think that the “worst” in terms of market change is behind them.
Karl “Chip” Case, economist and co-creator of Case-Shiller Index was recently quoted saying, “If you’re not buying it for the long haul, don’t buy because there’s a good chance you’ll have to sit through some down cycles.”
Buying will always have its risks. That’s why choosing the right home for the right reasons is critical.
Download and pass along this helpful handout “4 Big Signs You Should Buy” to help your prospects and clients understand how to make the purchase that will benefit them in the long run.
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Myth 3: The Starter-Buyer Pool Is Slim
If you’re selling a starter home or looking to jump in to home ownership for the first time, some of the headlines have been down-right depressing. Most read that Millennials and the market’s potential first timers are held up with 18 roommates or in their parents’ basements.
The real fact is that the true home ownership rate among Millennials has been steadily climbing since late 2011.
According to Chief Economist Jed Kolko, “The official homeownership rate published by the Census gives a misleading picture of homeownership trends. In fact, homeownership among young adults is both on the rise and not too far off from where demographics say it should be.”
For those selling starter homes or properties with undeveloped potential, this is great news. The buyer pool for these listings is growing every quarter according to the real data and given that most real estate transactions happen from April to August, this makes now a perfect time to list for these clients.
Myth 4: It Takes Top-Dollar to Win a Bidding War
While price is one of the biggest factors in any housing deal, it doesn’t stand alone. Many buyers in this market are anxious because of the constant talks of price increases. They may think they can’t afford to compete for the home they really want.
This is where a little agent education can go a long way. In super-competitive markets and multiple offer situations, there are other motivators buyers can use to win the deal including:
- Committing a quick closing dates
- Limited or no concessions
- Accepting responsibilities for some needed repairs
- Heart-felt letters that share why buying this particular home is important
At the end of the day, there are humans on both sides of the tables with multiple priorities. Appealing to the other, less black-and-white needs of the seller can give your buyer clients the ammunition to close in this market.
These are four of the top myths we’re seeing in the market. What would you add to the myth-list? Tell us in the comments below!