Real estate is a vast world of knowledge and experiences. Like anything in life, there are many myths and untruths that exist surrounding real estate, agents, and buying or selling homes. As promised, we dive into more common real estate myths and whether or not they are real or fake.
Myth: Buyers must have a 20% down payment to purchase a home.
Real…and not real. It is true that most conventional loans require buyers to pay at least 20% down on a home. However, other loan types may only require buyers to pay 3-5% down on a home. FHA loans, for example, typically require around 3.5% down. Talk with your lender about what you can afford and determine what your purchasing power is. From there, you can choose the best loan type for you and the property you wish to purchase.
Myth: A low interest rate equals a good mortgage option.
Not real. There is some truth that if you have a good credit score and solid down payment, you have more loan options that can result in lower interest rates. However, just because a lender promises a low interest, it does not mean they are the best lender. Closings can be derailed due to mortgages falling through or complications with paperwork. Find a lender you can trust and who knows the market. Don’t just fall for “good number” or a low rate.
Myth: The first step to buying a home is to start looking at homes.
Not real. As agents, we recommend (and so do many other reliable sources) obtaining a pre-approval letter from your lender before you begin viewing homes. You need to know how much you can afford, and then look at homes in that price range. You may fall in love with a $400,000 home, but you can only afford a $315,000. This will only lead to disappointment. Be realistic about what you want and how much you can pay.
Myth: What you see on TV is real.
Definitely not real. Now, there are some shows on HGTV that tend to be more realistic in their approach. They capture projects gone wrong, or when renovations go over budget. But it is important to remember that those hour long shows edit out weeks of hard work, budget concerns, weather delays, rejected offers, and many other obstacles buyers and sellers must face. It is the highlight reel of real estate. No one’s journey in real estate (or in life) is the same.
Myth: You must remove all personal touches and holiday decorations when listing your home.
Not real. If families have small children, it is recommended that they remove personal or family photos when the home is placed on the market. Making your home a neutral space allows potential buyers to see it for what it is and not focus on your personal design preferences, which could ultimately be a distraction and steer them away from choosing your home. However, having seasonal decorations or baking cookies prior to showing your home can add ambiance that a future buyer will love. Buyers want to know they can make a place their own but they can also need help in envisioning what that looks like. It’s a fine line. If you’re stuck, have your agent view your home, or invite a third party over to walk through your home and give you constructive, honest feedback.
While most of the myths we’ve covered have been false, many are still commonly believed to be true. There are also several myths that we haven’t covered. As a buyer or seller, it is important to do your research and to choose an agent or lender you trust. Real estate is an investment that affects you, your finances, and your wealth.