Maybe it’s a TV show you binged watched on HGTV that led you to believe a few things about the home buying process. It could even be things you’ve heard others say about owning a home since you were a child. There are many misconceptions fed to us everyday about buying a home. Today we’re going to go over a few.
1// You ONLY look at 2 or 3 homes to find the one
The reality is that most home buyers look at a dozen homes before submitting their first offer.
2// A buyer will place an offer at the first open house your realtor hosts
Although open house events are great opportunities to get potential buyers in your home, many times it is individual showings with a Realtor that gets those offers rolling in.
3// Always purchase the worst House in the best neighborhood
Sometimes purchasing the worst house in the best neighborhood is the best strategy. There are other times when the reason it is the worst house will never change. It could be location, lot size, etc. Things that can not be fixed no matter the amount of renovation done on the property.
4// You need to put 20% down
Depending on your situation, putting 20% isn’t the only way to purchase a home. There are many loan options available with varying requirements. According to the National Association of Realtors the median down payment in 2017 was only 10%. Many buyers were putting down as little as 3-5%.
5// You don’t need a realtor
This is a common misconception that people believe saves them money. In reality, not having a realtor can cost you thousands. A professional realtor will know the correct and competitive pricing for a home, advocate, negotiate, and make sure you are making the best deal. Wether you are buying or selling your home, having a professional realtor is a no brainer.
6// The worse shape the property is in, the cheaper the home and the remodel
There may be some savings associated with purchasing a home that is in a rough condition. Consider all the possibilities before pulling the trigger. Does the price of the home plus the estimated cost of repair fall bellow its estimated ARV (after repair value)? Will you every make the money you spent on purchase and repairs back? Carefully consider what a remodel may entail and budget for the unexpected.
7// Your lowball offer will always win
A common misconception buyers often have is that they should offer 10% lower than the list price. This is not a good/true rule of thumb. Each home is priced differently. Some home are overpriced and some are under. If you base your offer on that rule you may be shortchanging yourself and overpaying for a property. Your Realtor will run comparables and study the market with each home you are considering.