7 Common Real Estate Misconceptions

Common Real Estate Misconceptions

** Based on my experience**

1.       The first step is looking at houses.  Have you ever test driven a car, completely fell in love with it, only to be told that you can’t afford it? Or have been craving something for days,  only for the waitress to tell you they are sold out when you finally get the chance to order it? Determining how much house you can afford prior to looking ensures you can comfortably afford your new home. Speaking to a mortgage professional and getting approved for a home loan will help you determine what monthly payment you can afford, what down payment (if any) that you will need, and what type of mortgage best fits your needs. Your lender will also tell you what price range homes you should look at. Knowing this information up front will be helpful for both you and your Realtor. Also, when you find the perfect home, presenting your approval letter with your offer shows that you are qualified and serious.

2.       You don’t need an agent – While it is true, that you can buy a home without a Realtor, why would you? Your Realtor, much like your lender, will be a very important “partner” during your buying or selling process. Their knowledge of the process, negotiating skills, and overall experience is extremely valuable. Your Realtor will guide you every step of the way – from searching for homes, finding the right home and making an offer, home inspections and negotiating repairs, getting you prepared for closing, all while easing the process as much as possible.

3.       All real estate agents are the same – As either a buyer or seller, your Realtor will play a huge roll in your move. It is important to choose the BEST Agent, not just the most well known or largest company. While interviewing agents, look for a full time agent that is knowledgeable about both buying and selling. A true professional will be able to provide you with information on your market, negotiate on your behalf, anticipate and remediate problems, and overall make your buying or selling experience a good one. A few good questions to ask include – how long have you lived in the area, how long have you been in real estate, how many transactions a year do you average.

4.       You must have 20% to put down -  Most buyers are unaware of several loan options that will allow buying with less than 20% down. There are programs such as Rural Development and VA loans that require no down payment. In some cases, bond money or down payment assistance is available. FHA loans require 3.5% down. A simple, quick conversation with a local lender or mortgage company will tell you what programs you qualify for.

5.       The only upfront cost when buying is your down payment – During the buying process, there are a few things you will need to be prepared to pay for out of pocket. In most cases, you will need a deposit to secure the home you decide to move forward with. This deposit, also called “good faith” money, can range from $100.00 to thousands of dollars depending on the home you choose.

   Home inspections are strongly recommended and usually range from $350-$600 depending on the size of your new home.

   Your lender will have the home appraised by a licensed appraiser to ensure the home is worth the price you are offering to pay. This appraisal varies but generally is in the $400-$500 range.

   You will also have closing costs associated with your mortgage that will be due at closing. Closing costs include your lender fees, title attorney fees, and can include property taxes, and insurance. In some cases, during negotiations, the seller may agree to pay all or some closing costs for you, as long as your loan allows.

6.       You need an open house to sell your home –  Open houses are becoming less popular in today’s market. They were great prior to the internet and all of today’s technology. Don’t get me wrong, open houses still work, but are not as effective as in the past. Open houses today typically bring unqualified buyers, people “just looking”, and neighbors. In most instances, open house will not bring your buyer.

7.       Spring is the best time to sell – During my 17 years in real estate, I have seen slow springs, slow summers, insanely busy winters, and ups and downs regardless of the season. The truth is, it all depends on your local market! Speak to a qualified Realtor that can educate you and show you market patterns prior to listing your home. Don’t wait for the “best” time to list.