I’ve been known to flop on the couch, turn on HGTV, and not move for 4 hours. Despite having predictable formulas, shows like Property Brothers and Fixer Upper have a popcorn quality – as long as they’re in front of you, you’ll keep snacking on them.
As entertaining as these programs are, they also spread dangerous and costly misinformation about how the home selling process actually works, to the detriment of actual homeowners. Here are 3 HGTV myths about home selling:
HGTV Myth #1: It’s profitable to upgrade your home right before you sell it
The Show: Property Brothers: Buying & Selling
The Truth: You should almost never upgrade your home before you list it
In one episode of this show, the homeowner invested $12,000 in a 10 day renovation. After the renovation was complete, Drew, the real estate agent brother, told his client that her investment had led to a $35,000 increase in the home’s value. That’s a 191% return on investment in 10 days, or a 7000% return on an annualized basis. If this investment were actually possible, there would be no bankers on Wall Street. They would all be too busy buying up and renovating homes, since even the best years in the stock market only see a 40% return.
The implication of this episode is dangerous because it may incentivize some homeowners to conduct major renovations before selling their home. In short: you should almost never upgrade your home before selling it. As we’ve written before, there are almost no projects that result in a return on investment greater than 100%. The time to invest in your home is when you expect to be there for a long time so you can take advantage of the upgrades.
HGTV Myth #2: The layout of the home doesn’t matter to home buyers
The Show: Love It or List It
The Truth: Take into account the neighborhood before making major layout changes
In this show, designer Hilary is always tasked with adding bedrooms, bathrooms, music rooms, and even home schooling classrooms to the featured home to appease the lifestyle of the homeowners. This is great if the homeowners decide to “Love It.”
In realty, however, if the homeowners decided to “List It,” they could run in a host of problems with selling their newly renovated home. If most homes in the neighborhood are 3 bed / 3 bath and you just turned your home into a 6 bed / 4 bath / 2 exercise rooms, your house could sit on the market for a long time waiting for a buyer. Buyers tend to look for a specific number of bedrooms above all else, and they’ll often avoid searching in neighborhoods where bedrooms counts are vastly different than what they’re looking for. Building too many extra bedrooms or special-purpose rooms can cause a lot of headaches when it’s time to sell your home.
HGTV Myth #3: Offers flood in after the first open house
The Show: Flip or Flop
The Truth: Open houses don’t sell homes
At the end of every episode, Tarek & Christina hold an open house to show off their renovation. Prospective buyers gush over the finishes, and the couple always remarks that they’re expecting offers to fly in after the success of the open house.
Except that in real life, homeowners almost never receive offers from open houses. The National Association of Realtors (NAR) reports that fewer than 9% of buyers purchased their home because of an open house. Less than half of buyers even bother to go to open houses at all, and only 3% of buyers use it as their first source of information about available homes.
So why do traditional agents actually hold open houses and waste hours of the homeowner’s time? Because they think that it helps them find buyer leads, not because it actually helps sell the home being shown. Ironically, “think” is the key word in that last sentence; according to the NAR, only 5% of all buyers find their agent because they meet them at an open house. The vast majority are referred to their agent by a friend or neighbor.