The real estate market, often able to be described as a labyrinth of information, can come with its fair share of misconceptions and misunderstandings. When buying a home (especially if it’s your first time!) it's important to have at least a basic understanding of the real estate market and landscape.
Separating fact from fiction, we plan to debunk some common myths heard in the real estate world to provide you with the most accurate information to make the best choices!
Myth: Renting is a waste of your money.
While renting doesn’t build equity like owning a home does, that doesn’t necessarily mean it can’t be a smart financial decision in certain situations for some people. Renting can provide flexibility, especially for those who are unsure about their long-term goals or those who don’t want to commit to owning a home quite yet. Renting can also be more affordable during market downturns or in some highly priced areas.
Myth: You need the perfect credit score to buy a home.
A good credit score can be important for securing loan terms with the most favorable outcome, but that by no means insinuates that you need flawless credit history to purchase a home. Many lenders and loan programs have flexible credit requirements, considering other factors, such as your yearly income, your debt-to-income ratio, or the amount you’re putting down as a down payment. Don’t let a less-than-perfect credit score deter you from exploring the option of owning your own home.
Myth: The listing price is non-negotiable.
Definitely not true. The listing price is normally set based on the seller’s desired outcome or the market research done for the time/area by the agent listing the home. This means there is space for wiggle room and the price is not set in stone. Sellers may be open to having conversations about negotiations, especially if a buyer is motivated enough to get the closing process started. Other reasons the price may be negotiable is because of the condition of the property or market conditions at the time. Conducting personal research and consulting with an agent can help you put in a reasonable offer, even if it's not the original listing price.
Myth: You must put 20% down to buy the property.
While putting down 20% can help you avoid a private mortgage insurance (PMI) and likely secure you better loan terms, it is not an obligation or requirement. There are so many loan programs available nowadays that offer lower down payments, so it’s important to determine the best approach for the situation you’re in. FHA loans can go as low as 3.5% down and conventional loans can be as low as 3% down.
Myth: You need to wait for the perfect time to buy.
There is no perfect time to buy. We’ll put it in simple terms. Timing in real estate can be a real game, and can be incredibly challenging for some. It’s near impossible. Instead of waiting around for this elusive “perfect” timing, focus instead on the things you can control in the home buying process, such as being financially ready and having your long-term goals set in place.
We hope that clearing up these myths will help empower you in the process of home buying, and give you the vote of confidence we know you possess. Arm yourself with knowledge and be equipped to navigate the market with conviction!