3 Real Estate Myths - Fact Or Fiction?

By
Real Estate Agent with Nothnagle Realtors

 3 real estate myths - fact or fiction?

Have you ever watched the television show MythBusters?  If not, it is a show that takes various theories and tests them to decide whether they are fact or fiction?

As a real estate professional, there are tons of theories that not only buyers and sellers believe but also other Realtors®.  There literally could be an entire segment on the show MythBusters relating to the most common real estate myths.

What are some of the most common real estate theories that you hear on a frequent basis?  

Below are three of the most common real estate myths and theories and some insight into why they are simply not true!

Every Real Estate Agent Is Identical

Potentially one of the most frustrating one out of all the real estate myths that exist is that all real estate agents are the same.  This is the furthest from the truth and buyers or sellers who believe this myth generally will learn that this is not the truth at some point.  

Why All Real Estate Agents Are Not The Same For Home Sellers

Selling a home is a big deal.  There are many pieces that all need to be accounted for when selling a home.  The reality is that all real estate agents do not have the capability of possessing all the pieces of the puzzle.

Sellers who believe that all real estate agents are identical can find out quickly this is not true by asking an agent about their marketing and online presence.  One easy example of this is the fact that all of you ActiveRainers who are reading this are much different than others in your local market.  While some real estate agents have profiles on social media sites like ActiveRain, Twitter, Pinterest, Facebook...are they using them to their best ability?  Are they actually giving their sellers additional exposure by using social media or are they just using it as place to talk all about themselves and their listings - I call it using social media as a ME channel...ME ME ME ME ME...

Another excellent way to prove that all real estate agents are NOT the same is by looking at online exposure.  In any given market, I'm pretty certain that I can count with my fingers the number of real estate agents who understand the importance of a website and know how to leverage their website to build their business and to give their clients homes exposure.  A real estate agent who has knowledge about SEO, blogging, and the importance of having a highly ranking website is not the norm.  

An agent who writes quality real estate content and knows what types of real estate content to write about can truly give themselves and their sellers an advantage over their competition!

Why All Real Estate Agents Are Not The Same For Home Buyers

Just like selling a home is a big deal, guess what, buying one is as big of a deal!  All buyers real estate agents are not the same and for many reasons.

One of the biggest differences between buyers agents is whether they are available to show buyers homes or not.  Since the majority of people are busy, it's important that buyers agents can accommodate a buyers schedule, not their own.  If a real estate agent is part-time, do you think they will be available to show houses to a buyer when it's convenient for them or when it's convenient for themselves?  Of course themselves.

It's important when buying a home (or selling) to understand all agents are NOT the same.  One of the best ways to figure this out is to know what type of interview questions to ask prospective real estate agents.  Check out this resource by Bill Gassett over on List.ly that provides some excellent articles relating to real estate interview questions.

Mortgage Pre-Approval & Pre-Qualification Are The Same

Another top real estate myth that is pretty common is that a pre-approval and pre-qualification are the same.  It's important to understand the differences between a mortgage pre-approval and pre-qualification.

Mortgage Pre-Approval

A mortgage pre-approval is what both a buyer and seller should be looking for.  To obtain a mortgage pre-approval a buyer must submit documents to a lender such as their tax returns, bank statements, pay stubs, and other various required mortgage documents.  

Once a lender receives these important documents they will review in detail to ensure the buyer is truly able to obtain a mortgage.  When selling a home, it is strong suggested to request that buyers who submit purchase offers include a mortgage pre-approval not a pre-qualification. 

Mortgage Pre-Qualification

A mortgage pre-qualification is best described as an estimate of what a buyer can afford.  A mortgage pre-qualification in many cases is only as good as the paper that it is written on.

Depending on the lender, a mortgage pre-qualification can be obtained by a buyer simply giving a mortgage consultant information over the phone.  The big problem with this is if a buyer stretches the truth in some areas, such as their income or even possibly their job history. 

Open Houses Are Needed To Sell A Home

The third real estate myth, one that will inevitably rile up many other real estate agents, is that open houses are needed to sell a home.  Open houses are NOT needed to sell a home!

Did you know that less than 5% of homes are sold as a result from an open house?  There are many PROS and CONS to open houses, but the truth is there are more CONS.  A home can be sold without open houses if it is priced correctly and the proper marketing is used.  I always ask sellers (and other real estate agents) who believe open houses sell homes if they honestly believe a serious buyer will skip their home because it is not open.  Their answer 99.9% of the time is no and that they would contact their Realtor® to schedule a private viewing.

It is simply wrong that some real estate agents convince sellers that they will sell their home because they will hold it open every weekend.  Real estate agents should explain that open houses will give some additional exposure to a home but the primary purpose of open houses is for real estate agents to prospect and potentially pick up additional buyers.

Check out this great resource from Bundlr that provides many articles discussing why sellers don't need open houses.   

Final Thoughts

The 3 real estate myths above are some of the more common ones.  There are literally hundreds of other real estate myths that exist.  It's important that buyers, sellers, and real estate professionals dig deep to find out whether a real estate myth is true or not!

So, as mentioned about, what are the most common real estate myths that you hear on a regular basis?

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Rainmaker
2,235,697
Debbie Gartner
Floor Coverings International - Westchester NY & Lower Fairfield CT - White Plains, NY
The Flooring Girl - Westchester hardwood flooring

Oh yes, you're right a lot of these are either myths and/or big misunderstandings.  Great way to lay out the logic here.

Jan 27, 2016 09:55 AM #1
Rainmaker
22,518
Kyle Hiscock
Nothnagle Realtors - Rochester, NY
Licensed Real Estate Salesperson, Realtor®, e-PRO®

Thanks Debbie Gartner for the compliments!  There are WAY too many myths that don't get discussed enough and these are three extremely common ones!

Jan 27, 2016 10:00 AM #2
Rainmaker
958,224
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Another very well written article with tons of excellent resources Kyle Hiscock !

Jan 27, 2016 10:13 AM #3
Rainmaker
22,518
Kyle Hiscock
Nothnagle Realtors - Rochester, NY
Licensed Real Estate Salesperson, Realtor®, e-PRO®

Thanks Bill Gassett for the compliments!  As you know, real estate myths can be extremely annoying to hear over and over again!

Jan 27, 2016 10:25 AM #4
Anonymous
Joelyn Losada

Great article Kyle. Thank you for posting!

Jan 27, 2016 12:44 PM #5
Anonymous
Linda S. Cefalu

Agree completely. Very articulate and on point.

Jan 27, 2016 04:56 PM #6
Rainer
61,024
Linda S. Cefalu, Broker Assoc.
Coldwell Banker Homesale Realty - Hales Corners, WI

Agree completely. Very articulate and on point.

Jan 27, 2016 04:58 PM #7
Rainmaker
22,518
Kyle Hiscock
Nothnagle Realtors - Rochester, NY
Licensed Real Estate Salesperson, Realtor®, e-PRO®

Linda S. Cefalu, Broker Assoc. - thank you for reading and glad you found the information helpful! I'm sure you know of many other myths too!

Jan 27, 2016 07:46 PM #8
Anonymous
Kelly Koselek

Good article. With open houses - I find that about 15-20% of the people coming through are those whose agents have sent them. For various reasons - some agents can't show the house when the buyer can go. Either they are busy with other clients, doing their own open house, gone out of town etc... Having an open house can get quite a few potential buyers (and nosy neighbours ) through in a short amount of time, therefore inconveniencing the seller less.

Jan 29, 2016 01:32 PM #9
Rainmaker
253,162
Jean Hedren
Edina Realty, Inc. - Gordon, WI
NW Wisconsin Homes for Sale

I am located in a primarily second/vacation home market in NW Wisconsin where open houses definitely do not work. It's good to hear the facts from urban realtors. Thanks.

Jan 31, 2016 11:14 AM #10
Anonymous
Barbara

I also believe the company is important to a home seller more than a buyer. You should hire a broker that is associated with a national or regional company with a positive strong brand and a website with good technology.

Jan 31, 2016 11:17 AM #11
Anonymous
Tricia Beam

Open Houses are just another tool to sell a house. I sold 2 houses last year to buyers that
came to the Open House. It does serve as a form of marketing a home to prospective buyers. One of these homes was primarily a 2nd home.

Jan 31, 2016 01:07 PM #12
Rainmaker
762,227
Margaret Goss
Baird & Warner Real Estate - Winnetka, IL
Chicago's North Shore & Winnetka Real Estate

I agree and think the biggest myth is the open house.  Sellers still like us to do them because it's something tangible.

Jan 31, 2016 02:24 PM #13
Anonymous
Katie Muck

I do think open houses are important, especially when a house is difficult to show (shown by appointment only; no lock box; etc.).

Jan 31, 2016 03:55 PM #14
Anonymous
Rose Gabriele

Good article. I, however, have had very good success selling homes at an open house. A buyer looking for a completely different style of home and not even in that particular community happened to follow my signs into my open house. They fell in love with that house and bought it. That is one of several successful open house sales.
Rose Gabriele, Associate Real Estate Broker, RE/MAX Plus,
www.RochesterNY.com...Your Link to Local Real Estate

Feb 01, 2016 04:47 AM #15
Anonymous
Ian North

Real Estate activities combine to create our job! Our job includes everything that we do to create an income for ourselves. So although these may be seen as myths, to me, they are just part of the job that I must do!

Feb 01, 2016 12:54 PM #16
Anonymous
Debbie Anastas

No two properties are ever the same, and no two marketing plans should be either.
In a competitive market, an open house can serve to heighten the interest. If there's a good turnout, an interested buyer may be compelled to step up and make a good offer because they may fear losing the house to another buyer. A "feeding frenzy" at an open house can definitely prod a buyer into making an offer.

Feb 03, 2016 10:28 AM #17
Ambassador
1,175,117
Hannah Williams
Re/Max Eastern inc. - Philadelphia, PA
Expertise in NE Philadelphia & Bucks County

Kyle Hiscock  i love your way of thinking . Especially about Open Houses not selling houses .  In thirty years of selling Real Estate I have only sold One House from an Open House . Great information

Feb 09, 2016 04:43 PM #18
Rainmaker
22,518
Kyle Hiscock
Nothnagle Realtors - Rochester, NY
Licensed Real Estate Salesperson, Realtor®, e-PRO®

Thanks Hannah Williams !  I'm completely fine when agents are honest with a seller that they want to hold their home open and there is a slim chance it'll sell and the real reason is to prospect.  When agents indicate that because they hold a sellers home open because it'll sell it, that is where I get frustrated because in the majority of situations, it is not the case!

Feb 10, 2016 04:28 AM #19
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Kyle Hiscock

Licensed Real Estate Salesperson, Realtor®, e-PRO®
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