There are a lot of misconceptions floating around about real estate. Here are some of the more common ones that I’ve come across.
You need 20% down to buy a house.
Most people still think that you need at least a 20% down payment to purchase a home, and that is just not true. The minimum down payment for an FHA (government-backed) loan is 3.5%, and the minimum for a conventional loan (not backed by the government) is 5%. This is very much in contrast to the traditional idea that 20% is a flat requirement. While it is never a bad idea to put more down, many people can only do a minimum. This is especially true if it’s your first time buying!
You need cash to sell.
Let’s say I have your home listed for sale and a buyer is asking you to pay $10,000 in closing costs, cover the cost of a $600 home warranty and pay for their owner’s title insurance policy costing $1,400. You need $12,000 available in your checking account on closing day, right? WRONG! All the money comes from your bottom line proceeds as a seller, so they are paid out of the difference between what you agreed to sell for and what you owe on the property.
A home “passes” or “fails” inspection.
The home inspector isn’t there to approve or deny your wishes to buy the property. Their job is to point out health and safety issues that you may not be aware of and help you understand the future maintenance of the home. The inspector’s report is sometimes hundreds of pages long, which can alarm buyers at first glance, but once they’ve gone through it they understand the pages are also filled with the ages of their home’s essentials and approximate remaining life.
Spring is the best time of year to sell.
While it may be true that the springtime brings the greatest number of listings, I would argue that it is not necessarily always the “best” time to sell. First, this is when sellers have the most competition. Buyers have lots of choices!
Second, when it’s a seller’s market and there are 10 buyers interested in the same property, that can drive up the price, which is bad for buyers, but it can also lead to buyers backing out of the deal. In the heat of the moment, sometimes a buyer just wants to “win” and then realizes days later that it isn’t a home that will meet their needs. That’s bad for everyone involved!
Finally, in the fall and winter, there are fewer homes for sale, so less competition and more time for buyers to make well-thought-out decisions. After all, only serious buyers are going to put on their snow boots and coats to go look at a house!
As always, when you’re thinking of making your move, let’s chat. You’re in good hands.