There are many Minnesota real estate myths out there that continue to affect the decision-making process of buyers and sellers. This article shines a light at some of these myths and debunks them to give a realistic and factual look at the Minnesota real estate market.
Myth 1: Setting your home price higher than its market value, or what you expect to get, will see it sell well.
Truth: Listing your home at a higher price than the actual value of similar homes in the Minnesota real estate market is counterproductive. That’s because potential buyers and their real estate agents rarely look at homes priced high above market value. You can always lower your price after the first few weeks but the result will be your home will remain on the market for a more extended period making buyers suspicious of it.
Myth 2: Discount brokers are just as competent as any Minnesota real estate agency.
Truth: Real estate agencies have proven marketing strategies supported by promotional budgets that include costs such as virtual tours, printing of photos and brochures, MLS inserting fees, yard signs, floor plans, internet marketing, open house costs as well as highly trained and experienced staff.
On the other hand, a discount broker may not even have a complete marketing campaign or the staff required to attend to your specific needs. You only pay commission after your property sells, and a successful sale is directly related to the network and exposure of your realtor.
Myth 3: You can save more as a buyer if you do not use a Minnesota real estate agent.
Truth: This myth is entirely false. All homes listed with a licensed Minnesota real estate agent have the total sales commission built into the price. Ergo, if the buyer does not have an agent, the seller’s agent receives the entire commission.
Myth 4: You cannot buy a home if you have bad credit.
Truth: It’s true that getting a conventional loan with bad credit is almost impossible. However, you can still apply for other types of home loan such as FHA loans that only require you to put down a deposit as low as 3.5%. Also, borrowers with extremely low credit scores (think below 600) still qualify. However, though these loans may look attractive at first, they are not for everyone.
Myth 5: The only up-front cost you will encounter is the down payment.
Truth: This myth mostly affects first-time buyers. The fact is that there are numerous other costs to consider including fees, taxes, insurance, inspection, credit reports, and real estate agency costs. Furthermore, the buyer may determine that you will cover all closing costs. These can set you back anywhere between 3% and 6% of the purchase price.
Myth 6: Always go for the Minnesota real estate agent who promises to get you the highest price for your home.
Truth: Unfortunately, many Minnesota real estate agents tell the seller exactly what they want to hear to get the listing. Beware of agents who overly compliment your home and promise to sell it higher than its current market value. Always insist on a realtor who provides you with a well-researched comparative market analysis of your home based on similar homes that have recently sold in and around your neighborhood. Look at a realtor’s credentials and not what they promise.
Myth 7: Empty homes do not show as well as furnished ones do.
Truth: Any competent Minnesota real estate agent will tell you that a properly staged home that is in good repair, clean, and available to show – irrespective of whether or not it is furnished – will attract potential buyers. A well-conditioned empty home appears larger without any furnishings and allows buyers to envision their belongings in every room easily.
Myth 8: The Internet has rendered Minnesota real estate agents unnecessary.
Truth: While it’s true that the Internet has made it easier to sell or buy a home, this does not take away from the numerous benefits that a Minnesota real estate agent can offer you. As a seller, your realtor will help you set your listing price, negotiate the contract, use their marketing network and strategies to draw in buyers, and handle any issues that may arise during the inspection.
As a buyer, your realtor will help you narrow down the numerous options available within the Minnesota real estate market to those fitting your criteria, write an offer letter, advise you when problems arise during the inspection, and even show you listings that are not publicly available.
About Steve Lehmeyer & Transition Realty
Transition Realty owner Steve Lehmeyer specializes in helping people manage real estate transactions in the Minneapolis/St. Paul area. His experience in the Minnesota real estate market spans 20 years. Steve and his team work with clients to buy & sell single family homes, townhouses, condos, lake homes, and investment property. Download a free home search app for your smartphone or search the MLS at TransitionRealty.com.