Real Estate Myths are a serious problem for home buyers. I have compiled a list of 11 common real estate myths that have come to my attention in my 38+ years as a real estate agent.
When you are making the largest purchase of your lives, it is imperative that you are working with the correct information so that you won’t be fooled.
#1. I Don’t Need A Real Estate Agent
Having a professional real estate agent to represent you is a valuable tool in finding and buying the right home. A realtor has a fiduciary responsibility to work in your best interest as their client. You need to be able to express yourself freely with an agent with whom you have a strong rapport and feel comfortable. You should have confidence in the level of trust you feel in their reputation and their commitment to excellence of service.
Prioritize your wish list so that your real estate agent can find homes that are the best fit for your needs. Your agent’s experience and valued connections can make the whole project much more pleasant and less time consuming.
#2. It’s an advantage to work with more than one agent
All real estate agents will have the same access to MLS listings. Working with more than one agent in your area will not increase your access to suitable homes.
#3. If I see a house for sale that I like, I should call the number provided on the bottom of the real estate sign
Not a good idea! First of all, the agent listed on the real estate sign is representing the seller. Not the buyer. They are being paid to act in the seller’s best interest.
Also, you cannot buy thru the sellers agent. It is the law! You could choose to be unrepresented, but I don’t advise it.
If you call your established agent they can arrange for a viewing of the home. Your agent will do all the hard work for you and represent YOUR best interests.
#4. Real Estate Myths about the first time offer always being a low ball price.
It is generally thought that you should offer a lower price and negotiate your way up. But this strategy can backfire. A home can have multiple offers and the seller might never respond to your low ball offer.
Even when a property has languished on the market for quite a while, an offer that is too low could insult and offend a seller. They may feel very frustrated and overwhelmed when the selling of their home seems to be stalling. These feelings could guarantee that they won’t want to do business with you. If there are any ill feelings due to the low offer, negotiations can be more difficult, if they decide to do business with you at all.
It is wise to ask your real estate agent for advice about what price to offer. Have the realtor make the offer for you and handle the negotiations on your behalf. If you really love that home and don’t want to blow the sale, this is not the time to be cheap with your offer. Going low ball on the price is only worth the risk if you are making an offer on a house that is only one of several you’re considering.
#5. A house that appraises well doesn’t need a home inspection
One of the most serious of real estate myths to be wary of. Home inspections and home appraisals are two entirely different things. A home appraisal is performed to safeguard the lender and is an estimate of the property’s value. We do an evaluation on any property you may be interested in to establish fair market value.
A home inspection is done to educate the buyer. and is an assessment of the condition of the home. It is important to note that even though a house accurately represents the sale price, it may have deficits and flaws that need to be addressed. The home inspection will reveal the deficiencies. This will allow your realtor to for negotiate for a lower price or the seller having to repair or replace things.
Your realtor will be able to present the home inspection findings to the seller before closing. A trained home inspector will affirm any safety issues and any defects on the property. The inspector will check the condition of the home in areas you may not be able to see or easily access, like the roof and crawlspace. The home inspection contingency protects the buyer by giving you the right to cancel the sales contract without forfeiting your deposit. If the home inspector finds a problem with the home or property, you can back out of the sale.
#6. Real Estate Myths that Pre-qualification is the same as Pre-approval.
This is False! I am sure you have heard that you should pre-qualify or get pre-approved for a mortgage if you’re planning to buy property. These are two key steps in the mortgage-application process. Some people use the terms interchangeably. There are important differences that home buyers need to understand about this. One of the most popular real estate myths.
Pre-qualifying is the first step to give you an estimate of how much you are qualified to borrow. Pre-approval is the second step; a conditional commitment to grant you the mortgage.
Pre-qualification is a quick and easy look at your financial health. Pre-qualification documents give the home buyer financial credibility when putting in an offer for a home. A pre-approval comes after completing the mortgage application.
#7. All I need is the down payment to buy a house
Many people think that all they need is to save enough for the down payment. This is a real estate myth because of “closing costs.” They are made up of prepayments toward taxes/insurance, title fees, attorney fees, taxes and other closing costs. Your mortgage broker will inform you of the costs involved.
#8. You can buy a house with only 5% down
This is true! But only if you are a 1st time buyer. It is not advisable to buy a home with such a low down payment. The interest rate is generally higher, and the cost to you over the life of your mortgage will be considerably higher. The best advice would be to consider decreasing your home-buying budget or delay making the purchase.
#9. I’m fine, as long as I can make my monthly house payment
As I always say, “Do your research!” Question your home inspector and your construction and maintenance pros about what kind of repairs and maintenance you should expect. You will need to budget accordingly. Don’t forget the utilities, property taxes, water/sewage, trash pickup, snow removal, landscaping and maintenance that is often paid in condos and townhouses for monthly Strata fees. Total all expenses to be sure you’ll be comfortable with the final number.
#10. Real Estate Myths that 30 year fixed mortgages are the best deal
The 30 year fixed mortgage is often the best choice for home buyers. However, that doesn’t mean it’s the best deal. The shorter you can make the term of the loan, the less overall interest you will pay. If you can handle a 20-year or even 15-year mortgage, that would be the best choice. The dollars you’ll save in the long run will really add up.
#11. School District is irrelevant to those without kids
Homes in more desirable school districts cost more. Even if you don’t have children, when it comes time to sell your home, you’ll be in a stronger position if you’re in a good school district. So don’t buy into one of the worst real estate myths, that schools, parks and recreation centers will only impact those who use them. Always consult your buyers agent for advice on neighborhoods, strata documents (if applicable) schools and pricing. The right questions will save you lots of time and money!
The proliferation of real estate myths make it more important than ever to have your own professional agent who will supply you with accurate information for the most important financial investment you may ever make.