Myths and Misconceptions in Real Estate

Myths and Misconceptions in Real Estate

When it comes to real estate, everyone has bits of information that they’ve heard over the years.  But what’s really true and current?  We’re clearing up some common myths and misconceptions here.

Buying

You must be able to put 20% down to buy a house:

While it’s nice to buy a house with a larger down payment, this is by no means necessary.  You can put down as little as 3% to buy a home.  In addition, there are down payment and closing cost grant programs that can add to your funds (restrictions do apply).  You can check mortgage lenders that I personally recommend here: www.homeswithnora.com/mortgage-professionals/.

Home inspectors will “pass” or “fail” a home:

Home inspectors will tell you everything they see about the home, including future maintenance that may be required, current maintenance recommendations, or major issues with the home.  It is up to the buyer to take all that information and decide whether the issues found are significant, and if so, what they would like the seller to do to address them.  Work with your REALTOR® through the inspection negotiation process to know which items should be requested.  PRO Tip: Unless you’re buying a brand-new home, don’t expect cosmetic issues to be resolved by the seller.

You don’t need a home inspection on a brand-new house:

Not true!  Houses are built by humans.  Humans are fallible.  The home inspection is another way to protect you, and make sure the builder resolves any issues, before you move in.

 

Selling

Spring is the best time to sell:

Many buyers with families do come out during the spring, so they can plan for the coming school year.  However, the BEST time to sell is when you have more buyers than homes available for sale.  For instance, we’re in the midst of a down payment assistance program right now in Polk County that is bringing buyers out in droves!

It is fine to sell your home “as is”:

Your home may seem in great shape to you, but you could be overlooking some necessary changes that can boost your profits or get it sold faster.  Talk to your REALTOR® about some honest feedback about the condition and décor in your home.  Homes with Nora also has a home stager to help you make your home desirable to the most buyers.

You will save money by selling For Sale by Owner:

When you sell on your own, many buyers still want to be represented by their own REALTOR®.  So, you may still end up paying a commission to the buyer’s agent (typically around 3%).  While it’s true that you will not pay a commission to your own agent (typically also 3%), you may leave money on the table by pricing too low, not staging correctly, or giving in to unnecessary inspection requests.  You will also need to hire an attorney to create the deed package to complete the sale (and the attorney gets paid even if you don’t close). Finally, you should look at the amount of time you’ll spend showing your home, negotiating, and handling paperwork, and determine whether your time is worth more than you will be saving.

A Little In Between…

Agents get paid to recommend lenders and inspectors:

Not true!  By the Real Estate Settlement Procedures Act (otherwise known as RESPA), agents and parties to a settlement must disclose any business relationship to the consumer (for more information, click here).  For instance, if there is a business relationship between the real estate brokerage and the lender, this must be disclosed.

You can use any vendor you trust.  I find many clients are always looking for lenders, inspectors, contractors, and others, so I publish my list of recommended vendors online for anyone to use.  But, I receive no money or favors in return.  Check out my list here. Have anyone to add?  Let me know!

My house is worth this much because Zillow says so / I had it appraised / it’s been assessed for this amount:

Ultimately, your house is worth the amount that a buyer is willing to pay for it.  Zillow has not been in your house, the tax assessor has not been in your house, and the appraiser is not as familiar with the current real estate market, as they are looking at closed sales, not current competition or pending sales. Have your REALTOR® create a comparable marketing analysis (CMA) and show you the price range that they think you will get for your house.  Then, as you list your house for sale, you’ll need to ensure your REALTOR® is monitoring the market at least weekly, so that you can react quickly to changes, if needed.

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