Real estate myths are abundant on the internet. It’s important to discern the facts from clickbait and content written by people trying to establish themselves as experts in an area they’re unfamiliar with. Some articles legitimately debunk real estate myths. The biggest obstacle is misleading titles that claim to debunk myths, but actually perpetuate them.
Incorrect information usually comes from one-sided reporting by people sharing a personal experience with a given situation. Unfortunately, following bad advice can plunge you into a downward spiral, depleting every ounce of financial security you have. One major financial mistake can drain your savings, force you to live on credit cards, and cause debt which will affect your ability to continue investing.
Hopefully, you’ve got a bigger savings account than the 69% of Americans who have a stash of under $1,000—or the 34% who don’t have any savings at all. If you don’t have enough savings to cover a large loss, it’s especially important to discern fact from myth and learn from experienced investors.
Relying on the following myths as absolutes can quickly turn your profits into loss.
3 Real Estate Myths That Can Turn Potential Profits Into Huge Loss
Myth #1: Listing above market value will always give you more profit.
At first glance, it seems like good advice to list above market value. Real estate agents know prices are negotiable, and it seems advantageous to negotiate from a higher starting point. Every investor wants their property to be one that sells above asking price, and starting higher seems like a good strategy to make that happen.
For instance, an inexperienced investor might list and sell a property for $200k above market value, and write an advice piece urging other investors to list above market price. An experienced investor knows listing above market value is a strategy to be used in specific circumstances only. A new investor doesn’t have enough buying and selling experience to differentiate what those circumstances are.
Listing above market value can work in cities like Seattle, San Francisco and the Silicon Valley area where homes routinely sell for more…