Breaking Real Estate Myths
Myth: Looking at homes first is the best thing to do.
Truth: The best thing you can do first is getting your financing in order- unless you are paying in all cash anyways! Putting you infancies is oder ensures that your offer is eligible, and that you know what you can afford. Many times, buyers want to put in an offer as soon as they find a home. If you are not already prequalified when submitting this offer, though, someone can easily beat you to the punch and purchase your dream home ahead of you. Many agents will not even accept your offer if you do not have your pre-qualification letter. With knowing what you can afford and pricing your eligibility of an offer, financing first is always a good idea. This simple action saves you from possibly wanting something you cannot afford and dealing with that disappointment, or buying something less when you could have afforded more!
Myth: You will need at least 20% down to buy a home.
Truth: There are many programs that allow for a smaller down payment. In fact, USDA loans and VA loans don’t require any type of down payment at all. With these types of loans, you can finance your closing costs and get into a new home with almost nothing down. Other loans, though, can require down payments. FHA requires 3.5% down and convention financing requires anywhere from 5% to 20% down, all depending on the buyer.
Myth: The down payment is the only upfront cost.
Truth: You almost always have another type of cost when closing. It all depends on your lender. Each lender has a different list of expected costs, none of the lenders having the exact same expectations. Even though there is a list of expected costs from each lender, you can negotiate your costs by either asking sellers to pay them or financing them. Be careful, though, because some lenders have different rules. Like the VA have what is called “non -allowable”, meaning the Veteran is not allowed to pay them. Be sure you always contact your lender during the process, so you can get the full list of costs involved for your type of loan.
Myth: You should never offer full price.
Truth: Although, most of the time, buyers wish to negotiate a bit off of the sales price, low offers can be insulting. It is not always the best idea to start an opening bid super low. Every situation is different. Sometimes, even, buyers have to bid over the asking price due to extreme competition in the market.
Myth: You don’t need an agent to find a home.
Truth: Statistics prove that when purchasing a home without an agent, homebuyers typically pay more than necessary. This can also be taken from the opposite point of view, where home sellers typically make less when selling a home without an agent. Believe it or not, good agents always keep your best interests at heart. We want to get you the price price possible for the home you’re either buying or selling, and we also want to make your lives easier by ensuring all your paperwork is in order.
If you want more help on breaking real estate myths, be sure to call me and I will be happy to answer any questions you have!
Until next time,
Cynthia
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