Marshall Park is a real estate broker at Redfin in Virginia who writes an occasional column on the local real estate market.
When you buy or sell a home, you’re likely to get lots of unsolicited advice from well-meaning friends and family. And a portion of the advice may be helpful while some of it, well, may not be so helpful.
When it comes to real estate, people tend to make generalizations based on their own experiences and speak in absolutes, when the reality is more nuanced.
Here are some examples:
• “You should wait to list your home until the spring.” Yes, real estate is seasonal. In some cities this is more apparent than others, especially places with harsh winter weather. In the D.C. area, however, many buyers jump into their home search in January instead of waiting until March or April as conventional wisdom dictates. When Redfin crunched the numbers over the past five years, we found that 51 percent of homes listed in the winter sold above asking price, compared with 50 percent in the spring. If you want the best shot at selling your home quickly and for the most money, list in the first half of the year. The percentage of homes that sold over asking price dropped to 44 percent and 43 percent in the summer and fall respectively in our region.
Ultimately, the difference between selling in the winter and spring is negligible, so choose the time of year that is most convenient for you. And don’t fret if you need to list in the summer or fall. Ultimately, a home that shows well and has a good pricing and marketing strategy is the most likely to sell, regardless of when it hits the market.
• “Look for a deal during the holidays.” On the other side of the coin, I’ve seen many buyers who were convinced that they could score a great deal on a home by looking around the holidays. Like much advice, there is a nugget of truth to this concept. Fewer buyers are looking during this time period. Sellers who list during the holidays may be selling due to necessity, like a job relocation, and therefore be more motivated to sell quickly.
Sale price is ultimately a function of market dynamics and less a function of the season. The key is to be patient, since it may take many months for the right opportunity to present itself. I also suggest that buyers look at homes that have been on the market for a bit of time. These homes may be good opportunities for negotiating a sale under asking price. Once a listing gets stale, you’re likely to have more negotiating power, regardless of the time of year.
• “You don’t need an inspection for a new build or recent renovation.” Some buyers are under the impression that they can forgo the inspection for a property that is new or recently renovated. How much could be wrong if everything is new, right? From an improperly installed dryer vent to faulty wiring, new developments can have minor and major problems that aren’t apparent until you get a professional in to do a thorough review.
While there may be competitive reasons to waive the inspection contingency in the contract, the decision to do so should not be taken lightly and should be made with full knowledge of the risks. Regardless of how shiny and new the property looks, it is in the buyer’s best interest to spend the money to get a thorough inspection from top to bottom.
• “Your home is updated and in a good neighborhood, so you don’t need to stage it to sell.” Even the most beautiful, high-end homes should be staged and photographed by a professional photographer. Listing photos are a critical factor in the selling price of your home, how quickly it sells, and whether it sells at all. Our agents found that homes with professional listings photos sold faster, for more money, as much as several thousand dollars more.
A professional stager can provide objective advice on how to get your home photo-ready. They see a lot of homes so they can speak to design trends and features that are common in homes for sale in your area. You live in your home every single day and stop noticing little things that make a big difference in listing photos — a frayed rug, clutter in the entry way, chipped paint, etc. Spending a few hours to de-clutter and a few hundred dollars for a fresh coat of paint will go a long way in attracting the most interest from potential buyers.
• “Price your home above the amount you want to get, so you have room to negotiate.” Determining what your list price should be is an art and a science. Before you list your home, ask your real estate agent for a comparative market analysis, which will help you determine a reasonable price based on sales of similar homes in your area. It’s very important to set a good price the first time, so you don’t have to drop the price later.
A Redfin study showed that the first week that a listing goes on the market, it receives nearly four times more visits online than it does a month later. Even if you drop the price later, it won’t get the same attention. When in doubt, start with a lower asking price. Bidding wars are a good thing if you’re the one selling the home. If you underprice by, say, $10,000, you could get multiple buyers to bid up the price. If you overprice by $10,000, the home may sit on the market for months, and you’ll lose a lot more.
So there you have it — the common real estate misconceptions that snag buyers and sellers. Something I missed or overlooked? I’d love to hear your comments below.
Previously from Marshall Park: