5 Myths About Buying a Home
Once upon a time buying and selling a home was simple. You took your time to view properties, made an offer conditional upon inspection and financing, you went back and forth on price and you moved in. Unfortunately, times have changed. Let’s take a look at five myths that may no longer hold true in today’s breakneck housing market.
Myth 1: Closing Costs are a Drop in the Bucket
A lot of first-time homebuyers make the mistake of not budgeting for closing costs. Closing costs typically add up to between 1.5% and 4% of the purchase price of your home. If you’re buying a home for $500,000, your closing costs could end up being as much as $20,000. Closing costs cover everything from your home inspection, real estate lawyer fees and land transfer taxes. It’s important to budget for them, as you bank won’t foot the bill, you’ll have to come up with the funds yourself.
Myth 2: It’s Always Better to Buy than Rent
There’s a misconception out there that it’s always better to buy than rent. While buying a home makes sense in a lot of cases, it may not be the best move for everyone. As mentioned, closing costs can add up to a lot. You have to recoup your closing costs just to break even when selling your home. Unless you have a steady job and you plan to stay in your home for five years or longer, you’re most likely better off renting.
Myth 3: Real Estate is a Better Investment than the Stock Market
With the housing market booming across the country, why invest in the stock market when you could invest in real estate? Although real estate has posted impressive appreciation in recent years, it hasn’t outperformed the stock market.
Myth 4: Location, Location, Location
We’re often told the three most important factors in real estate are location, location, location. While there’s no denying location matters a great deal, you don’t necessarily need to purchase in your dream neighborhood in the here and now. If you’re not ready to sacrifice size for location, you may consider buying in an upcoming area. If you see a lot of houses being topped up, it’s usually a good sign a neighborhood is on the upswing.
Myth 5: You Can Get a Great Deal if You’re the Only Buyer
A common tactic for sellers is to list their property below market value to drum up interest. Sometimes sellers list their property $50,000 or more below its true market value in hopes of a bidding war. While this tactic often works, it doesn’t always, especially during slower months.
So what if you’re the only bidder, the seller has to give the home to you for your lower offer, right? Wrong. Some sellers actually refuse the lower offer and relist their home at a higher value.
RELATED: About Our Negotiation Process
As your Buying Agent we are committed to your best interests. Contact a Patrick Parker Realty professional will help you discern myth from fact.