A Real Estate Q&A: Mostly Fact or Mostly Fiction?

Let's play a Real Estate "Question & Answer" game. But instead of the typical "Fact or Fiction," this has a bit of a twist — a "Mostly Fact or Mostly Fiction" game.... And the reason I put it this way is because it seems in real estate that there is always an exception to the rule. This is often the result of the emotions and choices that buyers and sellers make that don't always make financial or practical sense thus resulting in real estate transactions that don't always proceed in the way in which we expect.

So here is a list of questions that are either "Mostly Fact or Mostly Fiction," and I can't wait to see what you think. But before we start, just one last thing — these answers are based on our current state of the market. We have not had our peak performing real estate years of late, and our economy is unpredictable and still has some instability, and so these questions and answers are coming from that perspective. And now, on to the game:

• Most of the time, the first offer is the best. Mostly Fact or Mostly Fiction? Mostly Fact. You have probably heard this countless times, and it is indeed true. Almost always the first offer is the best. This is due in large part to the fact that buyers discount homes the longer they sit on the market, and generally offers don't come in within consecutive days of one another. There is usually a lag time between offers, which means buyers will continue to discount the price of the home as the days on the market accrue.

• A seller can expect to sell his home for the asking price after his home has been on the market for one month. Mostly Fact or Mostly Fiction? Mostly Fiction. This is an extrapolation of the question above. It is safe for a seller to assume that he can sell his home for asking price, if he sees one or more offers within the first few days on the market. After that, all bets are off, and he will most likely be looking at something lower than his asking price.

• Location is just as important as price. Mostly Fact or Mostly Fiction? Mostly Fiction. Location is certainly quite important. In fact, I'm sure you've heard that old adage over and over again, "Location, location, location." But the truth is... price is hand's down the most important factor when it comes to selling a home. Buyers need to feel, see and experience a perceived value in the home, and when they do, they buy!

• There's no such thing as underpricing a home. Mostly Fact or Mostly Fiction? Mostly Fact. Or at least theoretically this should be mostly fact. If a home is underpriced, then multiple buyers will perceive such value in the home that they will all jump in to put in an offer. This will result in a bidding war, which ultimately forces up the price of the home to the "real" market price. The problem with this question, however, is that you can't really prove the hypothesis. Because once you've set a price, you don't get a second chance to set another, higher price to see if you ultimately end up with the same sale price.

• A home with furniture will sell more quickly than an empty home. Mostly Fact or Mostly Fiction? Mostly Fact. And yet, I say this and now I'm going to take it back and say that the answer really depends on the scenario.... It stands to reason that if you have a beautifully-staged home with gorgeous furniture, then yes, that home will sell faster than an empty home. With this kind of property, buyers will be able to easily visualize themselves living in such a lovely home. On the other hand, if you have a home that is filled to the gills with an excessive amount of furniture, chachkas and just plain 'stuff,' then an empty home will sell faster. Buyers will get overwhelmed and stressed by all of the debris, thus obscuring their clear vision of living in the home. But all things being equal — an equally pretty home with furniture and one without — the home with furniture should sell faster.

• A buyer who falls passionately in love with a house results in a higher price for the seller. Mostly Fact or Mostly Fiction? Mostly Fact. We don't see this too much these days, however. Buyers are ultra sensitive about overpaying for a home today. They don't want to pay more than they should and then be faced with the potential challenge of re-selling the home in the future when there is no way to predict how the economy and real estate market will be at that time.

• A seller ends up with more money if she initially prices her house at a higher price to test the market. Mostly Fact or Mostly Fiction? This is actually 100 percent Fiction. The best way for a seller to maximize her sale price is to price her house competitively from the start — to follow the "Price to Sell Strategy." Buyers then feel, see and experience the perceived value in the house and act quickly — Mission Accomplished. If the house is overpriced from the start as a means of testing the market, buyers will not be compelled to buy as they do not see the value in the home, and so they will continue to sit on the sidelines and watch. This will result in the property's days on the market accruing, which causes buyers to further discount the price of the home. Time and time again, we see a house, which was overpriced from the start, selling at a lower price and taking more time than it should have.

On a final note as we like to say in our listing presentations, the rule of thumb - which also happens to be 100 percent Fact — is that the seller sets the asking price, but the market (one or more buyers) sets the selling price for the home. The reality is that it doesn't come down to what the seller "needs" to get for his or her home, it's what the market will bear. That being said, if the seller isn't satisfied with what the market will bear, he or she can decide not to sell at that point in time....

And now back to you.... Have you seen some of these real estate questions and answers first-hand? And what are your thoughts about this real estate Q&A game? I can't wait to hear....