10 Biggest Myths About Real Estate

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10 Biggest Myths About Real Estate

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Shopping for a new home becomes a very trending activity among Americans, as more are looking to move out of their expensive urban homes to more affordable ones in the suburbs.

And even though the stock market has its ups and downs (as always), the real estate market has kept its position, with competition for homes at an all-time high, there’s no time to waste anymore.

If you’re considering a new real estate purchase, congratulations! But just before you sign that contract, we thought it would be a good idea to debunk some well-known real estate myths. You know, just for your own peace of mind.

  • Myth #1: Looking at homes is the best thing you can do first – Although you might be tempted to visit open houses and talk to your neighbors and friends, it’s not that simple. The first thing you have to do is to get a preapproval letter from the lender that you want. It will help you search for a place within the price range that you qualify for.
  • Myth #2: You don’t need an agent to buy a home – Yes, with sites like “StreetEasy”, “Zillow”, and “Trulia”, it’s much easier for you to do these transactions on your own. But it doesn’t mean they are done right. A buyer agent will put your best interests in the transaction in the first place. They will provide you with knowledge about the current market conditions and negotiate the best possible deal.
  • Myth #3: Buying a new home means few repairs in the following years – Just throw away your common beliefs of how well-built are modern houses nowadays. This is not necessarily backed up by evidence. The best thing you can do is to hire a home inspector that is specialized in new home construction, if there’s something wrong, they’ll spot it.
  • Myth #4: You’ll need a 20% down payment + closing costs – If you still believe that is absolutely necessary to put 20% down on a home purchase, hold on to your chair. It’s not. There are lots of programs, such as FHA mortgages, where you only need to put down 3.5%, and some of the closing costs are covered as well.
  • Myth #5: A down payment is the only upfront cost – Your down payment won’t cover things such as home inspection, termite inspection or closing costs. Truth is, many closing costs are negotiable, so you should consider asking the seller to pay them.
  • Myth #6: Getting preapproved will hurt your credit – Some people are completely avoiding speaking to a lender because they believe it will affect their credit. Even more, they think getting preapproved will “ruin” it.
  • Myth #7: You should never offer full price – You know, you can really ruin the market if you don’t make the right offer. Low offers can be insulting to sellers and aren’t definitely a good starting point when it comes to a transaction. If you really like the home and it has a reasonable price, offer close-to or at list price. There are markets when you’ll have to make a bigger offer to reserve the house of your dreams.
  • Myth #8: Buying a condo is similar to buying a home – You might think that if you bought your own condo, you can do whatever changes you want in your newly purchased home. The thing is, if you are renovating a condo, you’ll still need to get approval from the condo board, or the architect of the condo.
  • Myth #9: Avoid buying a first-floor condo – When they hear about a first-floor apartment, many buyers freak out at the thought of safety, privacy and noise levels. But the truth is, you shouldn’t throw away an opportunity at a good price, just because it’s on the first floor. There are many things that can fix this: you can install decorative iron grills or acoustical paneling inside.
  • Myth #10: Schools don’t matter if you don’t have kids – Homes in a school district cost significantly more. Even if you don’t have any children, it’s still a great deal. When the time will come for you to resell your home, you’ll get a very good price for it.

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