Some of the Most Common Real Estate Myths
by Chris Petry
Today, we’re going to talk about some of the biggest myths you might have heard over the last several years. No, I’m not referring to myths like the Earth being flat or Elvis Presley being alive and well, ironically moonlighting as an Elvis impersonator in Lake Tahoe. Those are indeed myths but today, we’re going to place our focus on some of the most prevailing myths in real estate. So, read below to see Eight of the Biggest Real Estate Myths that are alive and well today.
Myth #1: You need 20% down to buy a house. You’ve probably heard many times over the years that you need 20% down to buy a home. According to the National Association of REALTORS, the average down payment on a home is somewhere in the 14% percent range. It’s worth noting, however, that there are various types of loans that you may qualify for (First Time Homebuyer, Veteran’s, etc.) that will bring that number down even more. In certain circumstances, you may be able to forgo a down payment entirely. Keep in mind, loan type, credit score, and trends can all influence the amount you may owe. Every borrower’s situation will be different. Like most things, real estate is not one-size-fits-all. It’s best to meet with a real estate professional, as well as a personal finance expert or loan officer, to explore the options that are available to you based on your individual situation.
Myth #2: You can skip the pre-approval. I mean, in theory you could skip the pre-approval. The only problem is, you’ll still need to be approved at some point. Do you really want to have to undergo that process when the home of your dreams is sitting there in front of you? Seems like quite the risk, especially in an evermore competitive market. Not to mention, sellers will likely take bids from buyers with pre-approval letters more seriously.
Myth #3: You call the agent on the yard sign. If you’re in the market for a new home, or a first home, it’s an excellent idea to obtain representation from a licensed real estate professional BEFORE you make serious inquiries regarding a home, let alone attempt to place an offer. In fact, it’s a great idea to have an agent with you on every step of the real estate journey, from pre-approval to closing. Visit your local branch of Berkshire Hathaway HomeServices The Preferred Realty and inquire about the cost-free services of a well-trained real estate professional to get things started.
Myth #4: You need to paint every inch of your house white. This is another one of those things you’ve probably heard a million times. Buyers might “lack the imagination to conceptualize the space with their own design and furnishings.” Don’t get hung up on it. Yes, there are always things you can do to improve a prospective buyer’s first impression. Focus on curb appeal. Make sure the space is tidy, organized, and free of clutter. In terms of paint, perception has changed over the years. Where a whiteout was once the norm, it’s now okay to show a little color and personality. Too much white might conjure up images of uniformity, sameness, and sterility. Adjectives not routinely used to describe people’s homes, rather hotels, mortuaries, and hospitals. Bring on the cozy.
Myth #5: Home inspections are unnecessary. Home inspections are not required by law but they are far from unnecessary. Even if a seller discloses material defects known to them, there’s a chance those unknown defects might show up sooner than later. Who wants to move in and immediately go to work on large and expensive projects like a new roof, HVAC system, or electrical panel? Of course, if you’re a home seller a pre-inspection can be a good proactive option. That way you can address issues that might present themselves in a buyer-requested home inspection.
Myth #6: Your monthly payment amount will be identical to an estimate you saw online. Ever gone to one of those websites with a monthly payment estimator tool? Yeah, no. A true estimate of your monthly payment can only be determined by a combination of your credit worthiness, your down payment and loan type, interest rate, and escrow additions (insurance, property tax). So, until you’ve gotten a pre-approval, had an approved offer, obtained mortgage commitment, and hashed out the financing with a loan officer, the monthly payment estimation is subject to change. The good news? Loans with fixed interest rates will assure your payment before escrowed items will remain the same after closing. Unless you refinance at a later date, of course.
Myth #7: Renovating before selling is going to increase my home’s value! Yeah, no, maybe. There are a lot of independent factors that can influence home values. While a stunning bathroom remodel and a highly-desirable kitchen can increase buyer appeal, it’s not foolproof. Your home’s value can easily be affected by local, state, and national buying trends, including: architectural styles, interest rates, comparable home sale prices, and proximity to desirable amenities and services. Remodeling rarely hurts a home’s value but it’s definitely not guaranteed to inflate it either.
Myth #8: You’ve bought before so you know exactly what to expect. A quote often attributed to Naturalist Charles Darwin is, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.” If your previous real estate experience was some time ago or in another market entirely, you may find yourself in unfamiliar territory. After all, the real estate business is not a monolith. Its terms, conditions, and legalities are influenced and regulated by state and federal government. Additionally, the tools and technology available to REALTORS to market your home change routinely. You might be delighted to know how the availability and subsequent implementation of new technology has opened up many doors that were once harder to access, from outreach and awareness to the increased speed by which the process can move… assuming all ducks are in a row, mind you.
