Buying a home can seem complicated. It’s easier when you have all the right info! Here are a few of the typical home buying myths DEBUNKED!
MYTH # 1: As a buyer, you pay your agent a commission.
- FALSE! As a buyer, you have the option to use a real estate agent to help you find that perfect house. That agent’s job is to do her absolute best work for you in order to get you the best home for your needs at the best price. You do not pay that agent. The seller of the home that you end up purchasing is the person who pays the commission of any agents involved. Typically there is a buyer’s and seller’s agent. The owner of the home being sold would pay both agents’ commissions.
MYTH # 2: You must have 20% in cash for a down payment.
- FALSE! There are so many different types of loans to choose from, and many of them do not require a 20% down payment. First time home buyers may even qualify for programs that could grant them money toward their down payments (sometimes without repayment!). Various other loans range from 0%-3.5% down.
MYTH # 3: You should decide what house you want, THEN go get qualified for a loan.
- FALSE! While this is certainly one way to go about the buying process, the best way is to get prequalified for a loan before seriously beginning to look at homes. Now, don’t get me wrong, online home shopping never hurt anyone, so Zillow away! But once you start working with an agent and touring homes, it’s best to know what you can afford. You don’t want to fall in love with a home only to find out that it’s slightly out of your loan range.
MYTH # 4: You should lowball offer at first, because they’re bound to come up in price.
- FALSE! A severely low offer could potentially hurt you in the long run. Granted, making an offer is not down to a science--every seller is different, and every offer has its unique circumstances. It’s common that the seller will counter-offer and this can sometimes go back and forth several times. But if the initial offer is way below asking price, it’s possible that the seller will simply reject the offer and (though very rare) not accept any other offers from you.
- Talk to your agent about your options, and only offer what you’re willing to pay!
MYTH # 5: It’s cheaper to rent.
- FALSE! So false! Every case is different, but in today’s market rents are constantly climbing. It’s typically better to invest that money in home equity rather than paying someone else’s mortgage. The details depend largely on the price of home you want to buy, and how long you plan on owning it. There is a great rent vs. buy calculator here.