The 3 Biggest Misconceptions of Home Buyers and Sellers, According to Zillow

The real estate market is ever-changing, and staying on top of all of its trends and shifts can be tricky. Many potential homebuyers think they have an understanding of how to navigate the ebbs and flows in the market when they may actually be misinformed. Zillow has confirmed this in a new survey conducted with real estate agents with results that reveal where buyers and sellers are going wrong — and what they should be doing instead.

The main misconception aspiring home buyers have is that they think home prices will significantly fall. Zillow research finds this to be false. "Buyers may think it's better to wait out the market, but in reality, there is more opportunity in this market than I have seen in the past five years if buyers approach real estate as a long-term investment, " said Michael Perry, an agent who leads The Perry Group in Salt Lake City, Utah in a press release.

Another finding from Zillow's survey is that sellers wrongfully continue to expect bidding wars, offers above asking price, and quick sales, even though the market is cooling. The survey showed that sellers have unreasonable expectations about selling their homes, with 81% expecting multiple offers on their home, 79% expecting a price above market value, 79% expecting a quick sale, and 74% thinking they won't need to lower their asking price.

"Sellers can no longer put a for-sale sign outside their home and expect the offers to pour in," said Koby Sway, an agent with The Briley Team in Omaha, Nebraska. "They have to roll up their sleeves and make necessary repairs and home improvements before listing their home for sale. And it's more important than ever to get the pricing right when competing against other sellers for a smaller pool of buyers."

The third top finding from Zillow's survey is that first-time home buyers should be sure to do their due diligence and necessary preparations ahead of time before they start shopping around. 44% of agents say the most important thing for first-time buyers to do to set themselves up for success is to line up financing first before looking at houses. They should also nail down what they're willing to compromise on before shopping, with 28% of agents saying that the biggest mistake first-time home buyers make is failing to separate their wants from their needs.