There are many things you should know before buying your first home. It is an exciting time for you but it is best to be equip with the most information as possible to ensure that you get the absolute most for your hard earned money. There is nothing worse than closing on a home, then to later find out you could have saved thousands from things you may have overlooked or been mislead to believe. I want to take some time in the article to burst a few myths that plague folks when buying their first home.
Myth #1: The Market is hot. You need to offer full price or more!
This is certainly not true and if you have a professional advising your to do so on this basis, I would run… far away! Yes the market has increased at a rapid pace over the past 3 years. Yes, in many areas here in the East Valley, home listing prices have increased by over 10% in the last twelve months. BUT!! With all of these things taken into consideration, the sales prices are not consistently meeting the list price. In other words, homeowners are asking for more money but the buyer still holds negotiating power. In most areas of the East Valley, home owners are settling for 97-99% of their listing price. Save thousands and negotiate for a fair price that both parties are comfortable with.
Myth #2: You get a better deal as a buyer if you don’t use a Realtor
This myth is completely false. If the home you want is listed with a real estate agent or company, the total sales commission is built into the asking price. If you do not have a Realtor, the seller’s agent will receive the entire commission. Past that, having a real estate professional representing you in the transaction is a wise move to ensure you get the best deal possible by negotiating terms, repairs, home warranties, etc.
Myth #3: We should look at homes first!
It is super important to get your ducks in a row first. If you will be financing your transaction, the right first move is to get a pre-approval letter or a pre-qualification letter from your lender of choice. This will help you narrow your search to a price range you are comfortable with. Another benefit of this is that you will be ready and able to present an offer quickly when you find your perfect home! Most agents and home owners won’t accept offers without the pre-qual or pre-approval letter accompanying with it.
Myth #4: You don’t need an Agent to buy a home
Yes, it’s true that sites such as Trulia and Zillow have allowed you easy access to updated information. Many folks still underestimate the value an experienced professional can bring to them. A Buyer’s Agent has a fiduciary duty to you as a client first putting your best interests to the forefront. An experienced agent will guide you through the process, aid in negotiations, and provide all information that will help you make informed decisions that will benefit you and your needs. The agents job is to ensure you get the best deal possible! The best part… it costs you nothing!
Myth #5: Buying a new home means little to no repairs in the immediate years to come
Here is the honest truth… new home builders today are highly incentivized to build quickly and save as much as possible to maximize profit margins and projects. This isn’t to say they have done anything wrong or cut corners. It is still extremely important to hire a home inspection who specializes in new home construction to identify potential issues that will cost you dearly in the next 3-5 years. Do not skip the home inspection on NEW BUILDS! If your inspector finds any issues, have them addressed before you close on your home!
Myth #6: You’ll need 20 Percent Down Plus Closing Costs
Having 20 percent to put down on a home is fantastic! However, this is not the norm. There are many different financing options such as FHA mortgages that require only 3.5% down and also aid in closing costs. Don’t fret about the 20%. Speak to a qualified lender who can better explain your best financing options! Remember, most closing costs are negotiable, so you can ask for your seller to pay them as well!
Thank you for reading the buying resources blog for today! If you have any real estate questions or concerns, shoot me an email to firstname.lastname@example.org. I promise that you will not be added to some email marketing list. Trust me, we are all a part of one of those and it’s super annoying. Thank you for your time and have a great day!