There are many myths associated with buying and selling real estate.
Let’s take a look at the top 6 home buying myths:
#1 – The first step to buying a home is to start looking – FALSE
The best course of action when you think you are ready to purchase a new home is to contact a mortgage lender, or a local bank (our recommendation!) to find out what your purchasing power is. Becoming pre-approved with a lender is a great starting point and will give you more power to make informed decisions as you start your home buying process. Once pre-approved, you will know HOW MUCH home you can afford. Thus, keeping you from falling in love with a home outside your price range and being broken-hearted when you can’t afford it. Pre-approved, or pre-qualified buyers, always are preferred by sellers, as well, because they know you can afford their home.
#2 – Your downpayment must be 20% – FALSE
Having a 20% downpayment is preferred – it isn’t always necessary, many buyers are not able to come up with 20% of the purchase price. There are other options for buyers in this situation. Many lenders offer FHA loans or conventional loans that only require 3.5% down. Check with your lender to see what options are available for you.
#3 – A 30-year mortgage is always the best option – FALSE
Are you planning on this home being your ‘forever home’ or is it just a temporary stop for the next couple years? If the answer is the later, a 30-year conventional mortgage may not be the best solution for you. Perhaps a 5- or 7- year ARM may give you a rate more suitable for your needs. Consult your mortgage lender to determine what is the best fit for YOUR situation.
#4 – The seller’s asking price is the final price – FALSE
Many times sellers create a buffer in their asking price for what they really want to get out of their home. By doing this, they leave room to negotiate the price or concessions the buyer may ask for. A REALTOR®, can help you determine what the fair market value of the home is by completing a CMA or Comparative Market Analysis. Bottom line = don’t assume the asking price is the final price.
#5 – If you don’t have kids, the school district doesn’t matter – FALSE
This is a big one for young buyers or empty-nesters. Unless this is your ‘forever home’, you probably will sell the home at some point. Even though being in a good school district may not matter to YOU, it most likely will be to other buyers when the times comes to sell the home. Being in a good school district is always a sought after commodity and will often net sellers a higher price.
#6 – You don’t need an agent – FALSE
You get immediate updates from a third party provider such as Zillow, Trulia or Realtor.com immediately when a home comes on the market. Maybe you know the current inventory in the price point you are looking for like the back of your hand. You probably don’t think you need a REALTOR®, right? WRONG.
REALTOR®s often have knowledge of listings, the area, current market trends and much more about your area third party providers just don’t. When you work with a REALTOR®, you will get someone who is working for you. Buying a home can be extremely stressful for even the best of us. A REALTOR® will have the ability to think clearly and help you make informed decisions. Will be there to negotiate and navigate you through any bumps along the way.
Ready to start your home buying process?
Contact us for our list of preferred mortgage lenders!