You’ve heard them before, those sly myths that are commonly interpreted as facts. The real estate industry is not exempt of these in today’s growing society, especially with market spikes of inventory and home values. A first-time home buyer or seller will probably encounter a few more common misconceptions than others, but trending myths can be misleading for anyone. As a trusted advisor we want to take a moment to clarify some of these general fallacies focused on the home buying and selling experience.
Home Buying & Selling Myths Debunked:
- You NEED a large down payment to purchase a home.
- Large down payments are NOT required although they do help with interest rates for long-term loans.
- A home inspection results in a “pass” or “fail” status.
- Home inspections are done to assess the current conditions of a home. It is completed as documentation on the value of a home, NOT as a “pass” or “fail” for a house on the market.
- Pre-approval for a home is done once you find the one you want.
- This scenario is possible but never recommended. Pre-approvals are a key element to determining your price range. It is also helpful to be the one that is pre-approved if you happen to end up in a bidding war.
- “For Sale by Owner” saves tons of money.
- There is more potential of losing money when someone chooses to sell or buy without using a REALTOR®. Real estate has a lot of moving pieces that require extensive knowledge and trusted advisors for everyone’s best interest.
- Fall and winter are the worst months to buy or sell a home.
- These months may seem like a deterrent to many, but they contain quite a few benefits. Inventory typically decreases through winter months which means there is less competition. People have time off and can spend more time looking for their dream home. There are still tax breaks available prior to the end of the year for purchasing a home.
- The market will continue to go up.
- With a steady increase of home values, people have started claiming that prices will continue to rise. If you look back to the recent recession, you will see that real estate prices actually had a sharp decline before they rose again. Economist, Robert Shiller, tracked price patterns dating back to the 1890s through the 1970s where it showed price decreases multiple times.
- You should do renovations before you sell.
- Major remodels may have a tendency to backfire. Buyers do not always share your same style which leaves them in a position to decide whether they want to remodel something a second time, when it is already brand new. A price adjustment may make more sense, if everything is safe and still working in general.
- Your real estate agent ALWAYS represents your interest.
- Agents do not always have a fiduciary duty to a buyer or a seller. Customers often have the option of signing an agreement for the agent to represent them as their listing agent or buyer’s agent. Ask about your options first and do some research on their brokerage.
- You don’t have to depersonalize your home.
- Homeowners develop a natural attachment to their home. Although you will want to preserve your favorite memories for yourself, it helps to remove clutter, art, and family photos from your space before putting it on the market. People aren’t looking to purchase your ideas; they want the walls to build on theirs.
- Houses sell themselves.
- No, they really don’t. A house may have some organic appeal, but it takes the right tools and a true professional to sell it at its full potential.
Of course, this is a condensed list among the large variety of housing myths still out there. If you are looking to buy or sell a home in the near future, don’t hesitate to reach out to one of our Amherst Madison agents with any questions you may have. Curious about a basic loan rate and average monthly payments? Check out our financial calculators!