EP: 0047 - Debunking Real Estate Myths with Leela Nelson-Hollcroft

Podcast Summary: Debunking 3 Common Real Estate Myths with Leela Nelson-Hollcroft

In this episode, Realtor Leela Nelson-Hollcroft tackles three widespread myths in real estate, sharing her expertise and personal experiences to provide valuable insights for buyers and sellers.

00:30 – Myth #1: You need 20% down to buy a home.

Leela recounts her inspiring story of purchasing a home with zero down as a single mom in her 20s. This experience motivated her to become a Realtor and help others achieve homeownership. She breaks down financing options such as FHA, VA, and USDA loans, which often require as little as 5% or even no money down.

07:25 – Myth #2: Spring is the best time to sell your home.

Leela and Paul explore the common belief that spring is the ideal season for selling. While spring often brings higher intensity, multiple offers, and beautiful landscaping, Leela emphasizes that supply and demand in Bellingham and Whatcom County remain steady year-round. Ultimately, the best time to sell is when it works best for your personal situation.

12:15 – Myth #3: Pricing your home slightly above market value is the best strategy.

Leela debunks the idea that listing a home above market value creates better negotiation opportunities. Research shows that pricing competitively results in faster sales and higher final prices, whereas overpricing often leads to homes selling for less. However, Leela notes that pricing strategies can vary depending on market conditions.

📧 Contact Leela
If you’d like to connect with Leela Nelson-Hollcroft, reach her at leelah@johnlscott.com.

Transcript

Hello and welcome to the Bellingham Real Estate Podcast. I'm Paul Balzotti, I'm here with Leela Nelson-Hollcroft. Welcome, Leela.

Thank you. Good morning.

Yes. Good morning. And this morning we are talking about real estate myths and specifically three. I'm going to throw in a bonus one but three of the biggest real estate mess. And we will started off with, myth number one, which is, you must have 20% down. And, I think a lot of people know that you don't need 20% to put down, but a lot of people, surprisingly, still don't.

And you've been in real estate for several years, joined us this year. And, I want you to share you have a great personal story about not needing to put 20% down, which is you told me is your inspiration that got you into real estate. So let's talk about that.

Yeah. So yeah, it is surprising how many people still think that you need 20% to put down in order to buy a home. There are so many options now for first time home buyers or for people who have, like, less than perfect credit. We have, you know, you can put 3% down. You there's even, you know, 0% down programs through well, my example USDA I my first home that I bought, which was a couple of decades ago, I was a single mom, and I was in a career, before real estate.

Didn't think that I was ever going to be able to buy a house for myself, for my son. And I managed to, get into a program, actually, through a land trust, which is a whole nother subject. Community land trust. But the loan that I got to buy my home was USDA Rural Development. And so it was 0% down, and I was able to buy my first house.

And just that opportunity to give my son a stable home because we were having to move around, we were renting. And then, yeah, having to move a lot. And I just wanted him to, like, have his own home. And yeah. So that's what inspired me eventually to get my real estate license, because I wanted everybody to have that feeling of ownership.

So yeah, we've got there's USDA, there's VA loans. If you're if you're a veteran, FHA, you know, 0% down. But sometimes there's a little insurance, extra. Yeah. Yeah, yeah, yeah. And then but that's what the FHA that stays on the mortgage. And so you're, you're paying a little extra there with your, your monthly payment.

But like on a conventional loan you can do the, you know, first time homebuyer low low down or no down. And then once you have 20% equity you that insurance falls off the mortgage payment.

So yeah. Yeah you typically do have that premium and then you can usually get it removed. But it's you know, it's a small price to pay to, you know, if you wouldn't have been able to ever put that 20% down together, or maybe it would, it took you 3 or 4 years to get into ownership and then start in a way, and create an equity for yourself and getting yourself into what you mentioned.

A lot of times for a lot of people, it's not just about trying to get rich off of real estate, it's also just about that stability of of homeownership and, and creating that opportunity. And we should also note that, you know, seller credits. Right? So, I mean, maybe one at every four deals, we do something around there.

The seller is is paying the buyer's closing costs. That's part of the negotiation a lot of times. And so you could be you could save up that 3.5% down. And maybe that's 20 grand or whatever. And then or maybe it's a zero down USDA and then have the seller pay your closing cost. And in the last couple years, because of how, how much rates have gone up compared to the Uber low rates we had for a couple of years.

Right. It's become really popular to even buy down your rate, and have a seller, you know, pay. So when people look at even, mortgage calculators, one of the things I'm reading about a lot is, is mortgage calculators are really not necessarily a good thing to be, to be using all the time, because.

A Lot of times the lender can, you know, can help you buy down the rate and get the rate down a little bit and get the payment down, to where it's going to make sense for, for a buyer. So you really got it. People really have to sit down with sometimes multiple loan officers go through a lot of education, to figure out what the right program is.

Absolutely. To make it happen.

Absolutely. And I like what you said about multiple loan officers because, you know, we have some we have some great options and maybe one loan officer, you know, just can't give you all of the options. And then another one might have some great ideas that they can offer you. So you can really get creative and, and come up with, you know, I don't know, I just feel like there's nowadays so many different opportunities and, and, you know, getting sellers to, to help out with closing costs and, and things like that.

You really don't have to wait until you have 20% to put down.

Absolutely not. Absolutely not. And and so talk to multiple loan officers, USDA, FHA and conventional and state bond, which I guess I think that's FHA or conventional that you can do state bond programs. But and then you even brought up, close community land trust. There's affordable ownership programs. Those are a little tough to get into, but, but you were able to qualify.

Sometimes you just have to get on a waitlist. Yeah. And, you know, it might take a year, but, you know, they come, they help you with a huge down payment, which makes your monthly mortgage payments lower. Right. So it's just a matter of thinking outside of the box and talking to someone who knows and can give you different ideas.

There's there's so many options out there. Sometimes it's just a matter of watching a video. You have to watch a video and then and then you'll get a you'll get a down payment, you know, down payment assistance. So there's a lot of opportunities.

The other thing is, is that, you know, it's not just the lender. It's also, sometimes the realtor you are you, you reach out to making sure that, you know, obviously, you care deeply about this subject, which is one of the reasons I had it as one of them, the mess that we covered. But, you know, sometimes some realtors might not give you the time because you're not ready.

So you got to find loan officers, realtors that are going to be patient with you. And I think that what happens is sometimes people reach out, they're not ready. You know, they get kind of blown off and then they get. But then they just they get discouraged. They go sign another one year lease and then that cycle continues.

Yeah. And so, getting a team around you that's going to help you achieve your goals.

I feel like that's what we I mean, yeah, just finding a team that really leads with their heart and wants to see, you know, however long it's going to take, just get the person to the finish line.

Yes. Absolutely.

Yeah.

Okay. So we're going to move to myth number two okay. So myth number two is spring is the best time to sell. Now I think that with spring being the best time to sell, I think that there's no doubt that we both would agree that in the spring, it's the highest intensity of the market. As far as a backlog of buyers waiting for inventory to to come on the market.

You know, as those new listings come on in April, May, that can be a really it can be a great time to sell. Flowers are blooming. Everybody loves their yard in the spring. And, everybody loves that. That whole curb appeal in the spring. And so there's a lot of great things about listing in the spring.

But maybe let's talk about a couple of reasons why it maybe isn't always the best to sell in the spring.

So, I mean, obviously selling your house, it's it's a personal decision. And sometimes you just need to sell your house when you need to sell your house because you've had a life change and that, you know, that we don't get to pick the seasons for that. So, I think when you're selling in the fall or winter, you're going to get more serious buyers a lot of times, because those are people who are actually, you know, they don't have they don't want to wait until spring.

They need something now. So, you know, you might get somebody who's really serious. I think that, as far as, when I'm representing a buyer, I actually really like looking for homes with them in the fall and winter, because you get to see how energy efficient the home is when you walk in. Does it feel drafty?

What's the yard like? Is it mushy? You know, because you really seeing it, like, when it's in, it's like worst kind of weather and. Yeah, you know.

Well you're talking about because really oftentimes when you're selling you're moving somewhere. Yeah.

Right. Right. So you know, you're you're going to need to go buy some.

Yeah. Most of the time sometimes people are selling to go into, you know, a retirement home or to, to rent or whatever. But you're right, most of the time it's a sell by then. Is the sell by spring the best time it might be. It might not be.

Yep. Yep. So I mean it's again it's just with as far as being a buyer then when they're going to look for a new place, the springtime can be a little tricky because you've got a lot of competition. Right. So sometimes you're getting into a bidding war. Sometimes you're needing to go, you know, pay more than the than the asking price, the list price.

So, you know, it's really I mean, I know it sounds cheesy, but I just feel like selling your home any time, like, we we don't get to pick when we need to sell our home.

The best time to sell is the one that's right for you.

Exactly. Yeah. Yep.

And I mean, you're talking about you're talking about that when you just mentioned the bidding wars both ways. That is a really good point, because I think that we'll have clients who will say, well, you know, I want to wait to sell in the spring because I want to get the most amount of money for my house. Yeah.

Well, if they are turning around and buying, like you're saying, it's it's kind of the same thing. Like maybe in the winter, maybe you are going to sell your house for 3% less potentially. But then maybe you're turning around and you're getting a better deal on another home. And so yeah, it if you're going to buy and sell in the same season, then you're kind of operating in the same level as far as as far as what your results are going to be, maybe it's a little bit better market for you to buy, but maybe a little bit less to sell.

And then you also brought up another point that, I'll, I'll double down on, in the spring. You do have a lot of action. It's fast paced, really busy. Maybe a little bit more looky loos though as well. You're right. In the winter it's a little slower. But you're right, you're going to have really only serious buyers looking at your home.

Were, you know, going into the beginning of the year, right now when we're recording this and, you know, I often times, you know, we'll have sellers say, well, I want to wait till should I wait till April or May if they want to move now.

Now's the time.

To say I always say go ahead and list it. Go ahead and list it like. Absolutely. As long as there's no snow. And if there's snow and ice on the road that weekend you list. That's not good right. But if the weather is reasonable, then it could be better even.

Right. Because you might be the you might be the best one in that price range. You might, you know, with the lower inventory you're going to stand out more right, less competition. Absolutely. On both ends. Yeah. Seller and buyer.

Yes okay. So so we're in agreement on that. So sell when it's best when the time is best for you. And recognize the buy sell dynamic. And how that can be tricky. Absolutely right. Spring still great. But yes it can. It's not necessarily always the best time to sell. Okay. Myth number three okay. Price in your high price in your home price in your home higher can be better to make sure that you leave, room for negotiation.

Oh, boy. Yeah.

Oh, gosh. And so. Yeah. What what are your thoughts on that? Yeah.

So pricing your home higher is not always a great plan. You know, there's. This is why it's really important to have, a real estate agent that you're working with that can advise you. And do, you know, comparative market analysis tell you what the market is saying. Sometimes, you know, what a market look like. Last spring looks totally different now, right?

So you really have to look at what are homes selling for in, in your, in your neighborhood that are similar to yours. If you overprice your home, it's just going to sit there. And there's so much psychology in real estate and sales that, you know, after 30 days, if your home is still sitting there, people are kind of wondering, what's wrong with it?

Why isn't it selling? Yeah. You know, it's really important to get the price right from the very beginning. And everybody thinks their home is, you know, well, Zillow, Zillow told me my home is worth X amount. Well, Zillow doesn't really know. Your neighborhood doesn't really know like what's the current, you know, market rate. So I think it's just really important to to listen to your trusted advisors and, and get the price right from the get go.

Because if it sits too long, it really becomes sort of like tainted.

It's just yeah, there's and there's, there's a lot of, a lot of statistics behind this that, that basically, and one of my favorite statistics, of course, is that at John L Scott, we are home. The homes that we list tend to sell for more money in less time. And part of that is the presentation and the promotion and all the work that goes into those things.

But part of that is into the competitive positioning of the home, because, you know, to your point, really, what a seller has to understand is, is if it's a if it's a high inventory environment, maybe then there's not, you know, if it's sitting on the market a month, maybe then it's not that big of a deal.

There is. There's been years in the real estate market in the past where, you know, it wasn't uncommon for a home to sit on the market for a month or two. But now. Yeah, but now in today's in today's world, because of the low inventory, you know, you have at most price points a lot of the homes selling opening weekend, second weekend, I think the sellers even that are paying attention tend to not realize how much that opening weekend and that second weekend, how hugely crucial that is.

And a lot of times they'll say, well, you know, I'm fine if it sells in 3 or 4 weeks. And we both know and every good realtor understands that we're we're not shooting for week three or week four. We really want to make it happen that opening weekend of that second weekend. It's not because we don't want to work hard and and market and do all the things.

It's because we know that they're going to get the highest and best offer. Absolutely. Those opening weekends. Yeah. If maybe we can one weekend too. Those are the big ones.

And that's just it. You know, when you overprice a home thinking that that's going to leave room for negotiations or maybe you'll, you'll reap, you know, more, you know, higher offers, you're actually shooting yourself in the foot because if it's sitting for a long time, people are going to look at it and they're going to go, I could probably lowball that one.

I could I could put in a low offer because it's been sitting in there for 90 days. So, you know, also it's expensive if you're if you're actually trying to sell your home and you you didn't price it right from the start. And it's been sitting there, you're still paying the mortgage, you know. So it's costing you money.

Yeah. Not just costing you money as far as holding costs, but also putting a price tag on the stress. When, when, when you have a seller who, when a seller is, when you're if somebody think about moving this year, if you think about when you price your house aggressively or just at the right market price and then you and then we hope you get, you know, a full price offer or hopefully multiple offers, which multiple offers are really common.

Going into this year, this spring, there's going to be a ton of multiple offers all of the sudden now, if there's multiple offers, you're holding the cards. So the seller the offer could go. It's the it's the kind of non-intuitive fact that like buy lower by a being a little lower. Oftentimes you're gonna end up getting more money. But then also those buyers are oftentimes pre inspecting the home, you know, waving, inspection, putting in stronger deposits and offering terms that are better for you for whatever you're doing.

So if you prefer, if the seller prefers to have, you know, a week to move out afterwards, if they need more time in escrow or if they need a fast close, whatever the case may be. They can they have the leverage. Then to kind of control the process because they've, they've created that demand for their house. Right.

So. Right. I think that that is kind of a something that people don't think about as much. They just think that, okay, it's either going to sell in the first week or maybe if I price it higher, it's going to sell in two months. Well, no, you know, we could be in a really bad position in two months or you could be holding all the cards in a week.

Absolutely. I have a really good example of that. Just this last summer, I, I needed to get a house sold, and this particular client needed to get the house sold quickly, as quick as possible. Yeah. So we priced it just a little under what it probably could have been listed at just a little bit under. And that created such a frenzy that I had the busiest open house I've had in years.

I had so many people come that first weekend because they were so excited about the house. The opportunity, the price, everything. It ended up getting, you know, we we had a little bidding war going. It ended up going up. Sorry. It ended up going for much over the asking price. We had a cash buyer, you know, I mean, it was just like it really created that, you know, that energy just from having it priced even just a little bit under what Zillow said or whatever, you know.

Yeah. Under what you kind of thought it could go for. And then ultimately the seller actually ended up netting more than what you initially forecast, right? Yes. And and that's and that's kind of the art of it. Right, is when we're helping the seller get their home ready and then position at it's a it's ultimately their decision. Because if they if they do go a little under, they have to be prepared for what if we only get one offer.

Is that still a number that they're comfortable with. That's the most beautiful situation is if they're comfortable with a certain number but it's a little aggressive. Oftentimes they'll end up getting multiple multiple offers and going over.

Right.

But you have to have them. Yeah. So I you know as a seller you still have to be okay with, you know, that may not happen. It's just it's still a little bit of a matter of a chance. Right. So it's like a little bit of a risk. But it often oftentimes it's a lot it's a lot smarter risk than the opposite risk of trying to.

Hide and having it sit for months and months. And then you end up just pulling it off the market. Right.

So and I think the myth also is that sellers think that we just want to lower it to, to sell it faster.

Right.

And it's it. No, we really just know that it's going to be better for you.

It's how it works.

So and, you know, it doesn't mean that, that we don't play a role in that because, you know, we still have to make sure that we're promoting it the right way, that we're doing the open houses, that we're doing all the work in the marketing to still create the activity and that buzz around the property that we need to have in that opening, couple weekends.

And you brought up the psychology of it that we're trying to create the psychology of this new listing came on. This is a good deal. Yeah. And this is something you you can't waste your time on. You got to run out, come see and make a decision quickly. And, and and hopefully you get that situation where then they're going.

Oh, well, I really do like this house. And clearly other people like this house. Look at all these people at the open house.

Humans are so funny. Like, you know, they we we see something that a lot of people are excited about and we think, oh, I need to have some of that, too. I mean, it's just the way it works.

Yeah. And so that's kind of our job is to help create that for the seller. So absolutely. So okay. Good. So I think we're we covered the big three mass. The last myth that I wanted to cover, which I've kind of touched on a couple times, is, the term the term sales, right? The word sales, not the term sales.

The word sales, comes from a word called salon. Salon, which is that term is actually otherwise originally the synonym for that was giving and and I bring that up because I think another myth is that as realtors that, you know, realtors are great salespeople and, and you're a great example of this because, you know, I think that you're somebody who you, you really just your your heart's in it.

You care about the people that you're serving. And we have so many boaters like that. Yeah. And, you know, those are the kind of realtors I like to work with where their hearts in the right place. And really, being a realtor is about giving, you know, your time, your energy, your consideration, your consultation, to another person to help them achieve their goals.

And it's not a sales job, you know, and I don't know if you want to add on anything to that, but that. I just wanted to mention that.

Oh that's. Yeah. Thank you. Yeah. I mean for me it's like it's it's my, my I lead with my heart. And for me every, every client that I work with, I truly care about doing what's going to be best for them. I mean, I, I, I've talked to people out of buying houses because it didn't seem like the right time for them or it just didn't, it just didn't it didn't seem like it was going to be to their benefit.

So, Yeah, I mean, it's just for me, it's it's just all about helping people and, and and it just goes back to the reason why I got into real estate was, you know, because I was able to buy a home and, and have that that good feeling of creating a, safe, stable home for my son, you know, that that came from my heart.

And, and so I want to give other people that, I just I honor that, and, and, and it is an honor to work with people and have them trust me. For me, it's just all about, yeah, my my loyalty to them and just making sure that that that we do what's going to be best for them, you know?

Yeah. I believe in good karma. That's that's.

Karma is.

Real. Bottom line. It's good karma I like it.

Yeah, I like it. Okay. So we'll end with that. So obviously if you are looking for a fabulous realtor, obviously, Leela I hope you reach out to Leela. But thank you for joining me and covering this for today. Me. And thank you for.

This happy New Year.

Yes, and happy New Year. And thank you for watching or listening, you guys. Cheers.

Thank you.