Your Home Buying Myths Busted!!
MYTH #1: This house is “THE ONE”.
FACT: As long as you have realistic goals, there is more than one house for you. Yes, a home can feel “special”, but you can also make homes feel special by making them your own. Homes come in all shapes, sizes, conditions and prices and no one home will have everything you’re looking for. The important part is making a good financial decision while remembering your wants and needs. It will transform into your dream home after you move in. So, stay in control and don’t throw caution to the wind when making an offer; there will always be more houses on the market!
MYTH #2: My first offer on a home should be a lowball offer.
FACT: The answer to this one real comes down to one thing—how long the property has been on the market. If the home has been on the market for a few weeks, sure, an offer lower than asking would be a good idea. However, if the home has been on the market only a few days, submitting a low bid can seriously backfire. So, look at the specific circumstance of the home you are making an offer on, what has sold recently that is comparable, and make your offer based on the facts.
MYTH #3: A bigger down payment is always better.
FACT: You don’t need a 20% down payment and even if you can afford it, it may not be the best financial decision. You want to remain flexible, so your money isn’t all tied up in your house where you can’t use it for other things. It’s important to have an emergency fund for such things as home repairs or job loss. Also keep in mind that it may be better to diversify your investments. True, a larger down payment means you’ll borrow less, so your monthly payments will be less, but there may be wiser places for you to put your money. The answer about what you should do for a down payment really is buyer specific. Some buyers don’t have a lot of cash and can afford a higher monthly payment, others like the lowest monthly payment possible and are lucky enough to have the cash to do so. But, it’s not one size fits all for everyone and really depends on what your financial and personal plans are over the next few years. So, don’t worry about what your neighbor, friend, or co-worker did; do what makes the most sense for your life goals.
MYTH #4: A 30-year fixed mortgage is always the best type of loan.
FACT: It is NOT always the best option; it really depends on your specific financial situation and goals. We hear this all the time! A lot of people only live in a home for a few years, especially their first home, before moving on or upgrading. If you don’t plan on living in your home for the next 30 years, you might want to consider a 7 year fixed rate or an adjustable rate mortgage. We’ve done the math and you could save thousands over that period. Of course, if you are going to keep it as a rental longer, than stick with the 30-year mortgage, but at least compare and look at all your options, based on YOUR specific financial and housing goals and make your decisions accordingly.
MYTH #5: If you find a home you like, it’s best to contact the listing agent first.
FACT: The agent listed on the property represents the seller’s interest in the sale, not yours, the buyers. It’s important to contact your representative, not the sellers for the information you are seeking. The best thing to do is avoid the listing agent completely since any information they gather from speaking to you could hurt your bargaining position.
MYTH #6: What you see online is correct.
FACT: What you see online can often be incorrect. Online research is a great way to learn about the market and get to know pricing in a particular area, but it isn’t always accurate. You’ll find that there are a bunch of different sites, all with different information about the same home because it isn’t updated accurately. The trouble is, there’s no way to tell if what you’re looking is correct. The one and only place where values, facts and status are correct is the Multiple Listing Service (MLS). The consumer version of this is MRIS Homes (http://www.mrishomes.com). We love the other sites and encourage everyone to learn more knowledgeable and educated about the market, but don’t assume it’s correct and always contact an agent to verify information before making decisions.
As you can see, there is a lot of misinformation out there, so don’t believe everything you hear or read! Plus, most of the myths we busted all have the same answer—it really depends on your specific situation and goals in order to know what the “right” answer is to many questions that come up when you are buying a home. You need to make sure you have an agent on your side that gets to know you and your goals well enough to give best advice for YOU, and this is not the same advice for every home buyer. Your home-buying experience should get you where you want to be, financially and physically. For more information about buying your home, sign up below for our Weekly Series: Buying a Home 101.