Dear Heather,

A friend of mine who priced their home lower than market value ended up having a bidding war on it! Should sellers price their homes for less than they expect to get, in the hopes of getting multiple offers above asking price?

Seller

Dear Seller,

Buying or selling a house is not something most of us do every day. You may do it once a decade, or even once in a lifetime. Although most of us enter the world of real estate only rarely, we all think we know how it works based on the experiences of friends and family members, stories we have heard and things we have read. But for everything we believe we know about the industry, there are a number of myths that circulate about how real estate actually works. Buying into those can hurt your chances of buying or selling the right home at the right price.

In recent years, technology has radically changed the way homes are bought and sold and yet some aspects of real estate are the same as they were when your parents bought their last home. If a long time has passed since your last transaction, you may be surprised at how much has changed.

The internet has made much more information available to consumers but not all the information is equal, or even accurate. A lot of people, for some reason, believe everything they read on the internet. Take everything you see on the internet with a grain of salt. The danger with believing everything you hear or read can cost you money when it’s time to buy or sell a home. Here are seven of the most common real estate myths that can trip up buyers and sellers:

Properties sell at the price they are listed for

Most people assume that if a house is listed at a certain price, let’s say $1.5 million, it sells at this price too. Whilst it’s true some houses sell for asking price, many do not. Ask your agent for some comparables of similar houses that have sold recently to give you a realistic idea of value.

Set your home price higher than what you expect to get

Listing your home at too high a price may actually net you a lower price. That’s because shoppers and their real estate agents sometimes don’t look at homes that are priced above market value. Plus, an internet search in the range the buyer can afford will not include yours in their search.

It’s true you can always lower the price if the house doesn’t garner any offers in the first few weeks but that comes with its own set of problems. Bermuda is a very small market and those looking to buy keep an eye on the market, avoiding those that are overpriced or have been on the market too long. It is true that for correctly priced homes, we are seeing multiple offers. Should you price your home low in the hopes of getting multiple offers above asking price? In truth it can be risky as if you do this in a soft market, the danger is that all the offers will come in at lower than the asking price.

You can save money selling your home yourself

Some people do successfully sell homes on their own but they need the skills to get the home listed online, give the home full market exposure, negotiate the contract and then deal with any issues that arise during the survey, conveyance or loan application phases.

It’s not impossible to sell a home on your own but buyers often expect a substantial discount when you do, so what you save on a real estate commission may end up meaning a lower price. It’s not impossible to sell your home on your own for the same price you’d get with an agent, but it’s not always easy to emotionally detach yourself from the transaction.

The market will only go up

In recent months, homebuyers and sellers have experienced a time of strengthening home sales. Sellers can believe that the market only goes up, but sometimes that can be followed by a correction. The recent recession should have reminded everyone that real estate prices can indeed fall as well as rise. Home prices have fallen a number of times over the years: the 2008 market crash; the early 1990s, 1980s and mid-1970s. Invariably they rise again however it takes time and it isn’t always a smooth, upward line.

You should renovate your kitchen and bathroom before you sell

If your kitchen and baths work, a major remodel could backfire. Prospective buyers may not share your taste, but they don’t want to redo something that has just been renovated. You’re better off adjusting your price accordingly. Most buyers want to put their own spin on things.

You’ll earn back what you spend on renovations

If you fix the heating and air-conditioning system or roof, you will sell your house more quickly but you may not recoup what you spent.

The only renovation that is likely to net you as much as you spent is a coat of paint, mowing the lawn and a new front door.

The agent who shows you homes or lists your home represents your interests

Yes, in Bermuda listing agreements are signed by the vendor/s and therefore the listing agent has a fiduciary duty to the seller. Pick someone who you think will give you solid advice and good service.

• Heather Chilvers is among Coldwell Banker Bermuda Realty’s leading sales representatives. She has been working in real estate for 25 years. If you have a question for Heather, please contact her at hchilvers@brcl.bm or 332-1793. All questions will be treated in confidence. Read this article on Facebook: Ask Heather Real Estate