Popular misconceptions about real estate make many people hesitant to get into the home-buying or -selling game. And that’s a shame.
If you’re considering buying or selling a home, don’t let the following conventional wisdom stop you. There’s not as much truth to it as you think.
1. Misconception: You don’t need a real estate agent to buy a home now that all the information is online
Today it’s more important than ever to have a great local real estate agent on your team. And there’s no cost to you, so why not get an experienced pro on your side?
It’s no longer about agents having access to the proprietary data – it’s all out there. But since buying a home is such an infrequent transaction in your life, you need someone along on your journey who knows and studies the market, understands the process and can act as an adviser to help you interpret the data.
And buying a home is not just a financial transaction. It’s incredibly emotional, and you’ll want a teammate to help diffuse the feelings, navigate the ups and downs, and steer you in the right direction.
2. Misconception: You need 20 percent down to buy a home
This is the biggest misconception for millennials, who are often burdened with huge student loans but still want to be homeowners.
After the credit and housing crisis, it became very difficult to get a mortgage. Lenders were strict, and financing killed deal after deal.
Today, however, it is possible to get a loan with as little as three percent down. Yes, that’s true.
But while lending standards have loosened, it’s no slam dunk today. You must have great credit, verifiable income and assets to back you up. But you don’t necessarily need a 20-percent down payment.
3. Misconception: My home’s value is whatever the appraiser says it is
The market value of a home is determined by what willing and able buyers and sellers agree on in an open market and arm’s length transaction.
Other than that, a homeowner or would-be seller can only rely on a recent appraisal for a bank refinance.
It’s helpful to understand that a home’s appraised value typically comes in below the market value. Factors such as views, finishes, fixtures or neighborhood specifications can affect your home’s appraisal.
4. Misconception: Spring is the best time to sell a home
Traditionally, many buyers come to the market in the spring to secure a new home before the start of the following school year in September. This decades-long trend has made people think spring is the best time to list a home for sale.
But not all buyers today are families with kids. Buyers are single women, downsizers, baby boomers and people who don’t know – nor care – about the school calendar.
The best time to sell your home is when inventory is low, and that’s the dead of winter. Later in the year is better because buyers are still home shopping through the holiday season.
5. Misconception: You don’t need to have open houses to sell homes
Many people believe that, with the advent of online listings, open houses are unnecessary. It’s not true.
Open houses are in the DNA of real estate, and the more you make your home available to potential buyers, the better chance you have of selling it.
When you host an open house, you are literally opening the door to let buyers come through and fall in love with your home. Without an open house, they might never set foot in the door.