Top 10 Home Buying Misconceptions
Purchasing a property is typically fraught with anxiety, stress, and uncertainty. Before they start their house hunt, during their house hunt, and after they’ve discovered their dream home, homebuyers have a lot of questions. Unfortunately, whether it’s on the internet or from friends, family, or coworkers, there’s a lot of false information and advice available to home purchasers.
There are numerous frequent home-buying misunderstandings. Many of these factors can deter a potential home buyer from attempting to purchase a home. These common house purchase misunderstandings can cause problems for a buyer both before and after the home buying process. At all costs, potential house buyers should avoid believing these frequent home purchasing fallacies!
What are the most prevalent misunderstandings about buying a house? The top ten home-buying misconceptions are listed below. These house buying myths are highly frequent, and it is important to understand that they are not true and should not be trusted!
1. To Buy A House, I’ll need a large down payment.
A widespread house-buying misunderstanding is that a big down payment is required when purchasing a property. The most common proportion for a down payment that individuals assume is required is 20%. There are numerous alternatives for a home buyer to purchase a property with little or no money down.
An FHA, or Federal Housing Administration, the mortgage is one of the most common ways to buy a home with relatively little money down. A buyer can put as little as 3.5 percent down on a property with an FHA loan. A 3.5 percent down payment is not the same as thinking you need a 20% down payment to buy a house.
2. To Buy A Home All I Need Is The Down Payment
Even if a substantial down payment on a property is not required, another common home purchasing misunderstanding is that the down payment is the only money needed to purchase a home. This isn’t true.
There are numerous fees associated with purchasing a home, many of which you may be unaware of. When purchasing a property, you should expect to pay a variety of expenses including these;
Real estate taxes
Bank appraisal
Mortgage application
Underwriting fee
Attorney fee
Various inspection fees (ex; home inspection, radon test, septic inspection, etc…)
Mortgage insurance
The fees listed above are just a few of the more prevalent charges connected with purchasing a house. There are numerous house buyer programs and subsidies available nationwide, statewide, and locally to assist home buyers with the additional costs of owning a home. Don’t believe the prevalent home-buying myth that the only money needed to buy a house is the down payment; this is incorrect.
3. To Buy A Home I Need To Have Perfect Credit
To begin with, credit ratings do have an impact on whether or not a buyer can purchase a property. However, there is a prevalent fallacy that to buy a home, you must have a “perfect” credit score. For home purchasers with credit scores in the 620s, there are various mortgage products available.
It’s crucial to remember that while you don’t need flawless credit to buy a house, a lower credit score will affect your ability to get a mortgage. The interest rate that a buyer can secure will be the most affected by a lower credit score. The larger the risk for the lender, the lower the credit score, and hence the higher the interest rate.
Because mortgage rates are currently at record lows, a buyer with a poorer credit score may be able to acquire a better interest rate than a buyer with perfect credit who purchased a home ten years ago.
4. I Need To Find A Home Before Talking With A Bank Or Mortgage Company
One of the most common house-buying misunderstandings is that finding a home first and then meeting with a mortgage company or bank is the proper sequence. For a variety of reasons, it’s crucial to review your financing alternatives and obtain a mortgage pre-approval before looking at properties.
Why is it important to have a mortgage pre-approval before looking at houses?
Because a seller will want documentation before accepting a buying offer, having a mortgage pre-approval before looking at homes is the most important reason. If your local real estate market is a seller’s market, not having a mortgage pre-approval can put you at a significant disadvantage. In a seller’s market, you’ll likely face competition from other buyers, and not having a pre-approval is a surefire way to miss out on your dream house.
Other common reasons to talk to a bank or mortgage provider about your financing alternatives before looking at houses include:
Understanding the costs of purchasing a property is essential.
You should be aware that you are only looking at houses that fall within your price range.
Make certain you’re getting the greatest mortgage rate and product.
5. To Buy A Home It’s Not Important To Have A Real Estate Agent
Another common misunderstanding about home buying is that having a real estate agent isn’t necessary. It is possible to purchase a home without using the services of a real estate agent, but why would you want to?
First and foremost, it’s critical to recognize that, in the vast majority of cases, a buyer is not liable for paying their real estate agent. When buying a property, having a top-notch buyer’s agent can make the process much smoother and less stressful than not having one. When settling on a buyer’s agent, it’s crucial to keep in mind that not all buyer’s agents are created equal.
It is strongly advised that you know how to correctly interview prospective buyer’s agents when choosing a buyer’s agent. Also, make sure you don’t choose the first agent you speak with because he or she is a brother or sister of one of your coworkers. Having a top-notch buyers agent on your side can not only make the home-buying process less stressful, but it can also provide you an edge in a seller’s market.
6. Any Home I Buy Will Be Worth More Money In Future Years
It’s never easy for a seller to learn from a real estate expert that their home, which they purchased a few years ago, hasn’t appreciated. A widespread misunderstanding among home buyers is that any home purchased would increase in value over time.
Every house is distinct, with its own set of characteristics, facilities, location, and desirability. When buying a home, the buyer may be paying top market value for the property in a market where home values aren’t rising rapidly. If this buyer tries to sell again in a few years, the value of their home may have remained the same or even reduced.
When buying a property, it’s critical that a buyer not only learns how to choose the community they want to live in but also understands the local real estate market. If a buyer does not do their homework, they may be disappointed when they discover their home’s worth has dropped.
7. Online Home Valuation Estimates Are Accurate
Another common misunderstanding about house buying is that online home value estimates are accurate. Nothing is more frustrating for a seller than receiving a lowball offer on their house because a home value estimate was far lower than the listing price.
Numerous internet websites provide quality and useful house buying resources for home purchasers. These online house value estimates are one tool that is not useful to home purchasers. The majority of internet house value estimates are incorrect.
Zillow is one of the most popular websites for estimating home values. In a recent case study comparing Rochester, NY house selling prices to Zillow’s “Zestimates,” it was discovered that nearly 40% of the sale prices on a particular day were $18,000 or more below what the “Zestimate” predicted.
8. It’s Not A Good Time To Buy A Home
Many home purchasers have the belief that now is not the best time to buy a house. In actuality, there are numerous reasons why purchasing a home now is a wise decision.
The record low loan rates are the most essential reason why now is a fantastic time to buy a home. If mortgage rates rose just 1%, the number of people who could afford to buy a home would drop dramatically. Other common reasons to buy a home now, rather than believing this widespread home purchasing myth, include:
The value of real estate is likely to rise.
The cost of renting is increasing.
9. Buying A Home Is A Quick & Easy Process
Buying a property can provide several challenges and traps that must be faced during the process, so it is not always a simple procedure. The majority of properties will take about 60days from contract to close, depending on a variety of reasons.
There are numerous moving components and people involved in the home-buying process. The following are some of the most common reasons why buying a property is not a quick and easy process:
Concerns over the title
Concerns with instruments surveys
Conditions of a mortgage
Issues with home appraisals
Closing date coordination with buyer, seller, and attorneys
10. I Should Start Low With A Purchase Offer To Leave Room For Negotiation
Many home purchasers assume that their first purchase offer should be far lower than the asking price of the property. This is a typical home-buying misunderstanding that frequently results in a grumpy seller. There are times when a buyer is correct in making an extremely low offer.
It’s difficult to know how much a buyer should offer for a home. When considering how much to offer a seller for their house, there are a few things that purchasers should keep in mind. When considering how much to offer for a property, it’s critical to do your homework and research before making that first offer, as it may be your last chance.
Final Thoughts
Believing the above house purchasing myths might be detrimental to a home buyer. It’s critical to be aware of these house purchasing myths, whether they lead to a buyer not pursuing a home or an unfortunate home buying experience.
If you want to sell your home in Texas quickly and at the best price, choose JZ Home Buyers. JZ Home Buyers is here to help you, regardless of your situation. On closing day, all you have to worry about is collecting your check!
Call us at 817-382-3579 or go to www.jzhomebuyers.com to learn more. We can’t wait to help you! For a free inspection