Home Buying Myths Debunked

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Lemont IL Real Estate Agent | Home Buying Myths Debunked

So you think you’re finally ready to make the jump from renter to homeowner? Awesome! In this exciting but admittedly scary time, you might be inclined to turn to friends and family for advice—especially if they own homes.busting home buyin myths lemont il real estate agent

But beware, dear home buyer of the future: Those close to you might not be the experts you think they are. You could be heeding bad (albeit well-intentioned) advice without even knowing it.

So we’re here to bust the most common misconceptions about home buying so you can do this thing the right way. Because this is what we do.

  • Buying is always better than renting.

    This depends largely on the price of the home and how long you stay in it. Not only will you want to keep it long enough to ride out any dips in the real estate market but it can generally take 5-7 years just to break even with the costs of buying, owning, and selling a home and in some housing markets, it can take much longer. You’ll want to make sure you’ll keep the home for at least that long. If that means missing out on a job opportunity in another city, that’s a real cost.

  • A 30-year mortgage is always the best option.
    When choosing between a 15- or 30-year mortgage, a 30-year may not always be your best option. While the loans are structured similarly, it all comes down to the length of the loan. A shorter term of 15 years means your monthly payments will be higher than a 30-year term, but you’ll pay less interest over the life of the loan. Why? When you first start to pay back a loan, the balance is high, and most of your payment goes toward interest. As your balance gets smaller, so do your interest payments, so more of your payment goes toward the principal. With a 30-year loan, the balance gets smaller more slowly (and you’re borrowing money for a longer period of time), so you ultimately pay more in interest.
  • Buyers should never offer full price

    It’s impossible to have an across-the-board strategy for pricing and negotiating real estate. For starters, every real estate market is different, as is every seller’s approach to pricing. In many parts of the country, for instance, it’s a red-hot sellers’ market. Many times, sellers will purposely price their property right at or just below market value to get multiple buyers interested. When buyers try to offer, say, 5 percent under market value when everyone else is offering full price or more, they might be looking for a home for months.

    Also, if a listing is brand new, the seller may expect not a penny under asking. The first two weeks to a month are when the seller sees the strongest activity. When a buyer offers too far under asking out of the gates, they’re likely to lose out.

    In slower markets, it’s not uncommon for a seller to price a home well over the market value and wait it out. If a buyer offers 5 percent off a home that is overpriced by 10 percent, the buyer risks overpaying. This is why it’s important that buyers work with an experienced local agent and never take a one-size-fits-all approach to pricing and negotiating.

  • The lender with the lowest interest rate is always the best option.
    You may be dealing with your lender for the length of your loan term (unless you refinance, sell, etc.) — so you want a company you can easily reach and get a response from, should questions or issues arise. The lowest rate isn’t necessarily a great deal if you’re stuck with nonexistent customer service.
  • The only up-front cost is a down payment

     

    As if! For one thing, the seller might determine you’re responsible for closing costs, which can be anywhere from 3% to 6% of the purchase price—and those costs can change drastically depending on your state. And don’t forget the slew of fees, taxes, and other costs for inspections, credit reports, insurance, among others.

  • Spring and fall are the best time to buy

    Many years ago, real estate markets revolved around school cycles and summer. People wanted to move during summer so their kids could be settled in and start school by September. For this reason, spring has always been seen as the main selling season. Summer was usually slow, so the fall brought a second opportunity for buying and selling.

    Some buyers (and sellers) still organize their activities around this myth. They pull away in the summer as well as during winter. With so much information online today, however, markets move much faster and a buyer can look at real estate 24/7 from a mobile device while sitting on their couch. As a result, serious buyers are in the market all the time. (The not-so-serious buyers come and go when it’s convenient.) Homes listed in November or January could be listings of highly motivated sellers. Some buyers have their hands in a real estate transaction all the way up to Christmas, and a seller who has a home listed then must be pretty serious about selling.

    The bottom line: Shopping in the dead of winter or the middle of summer can present great opportunities for today’s buyers. With less competition in a market dominated by serious sellers, an aggressive buyer can snag a great deal in summer or winter.

Whether you’re looking to buy a home or sell a home, you’ll need the best Lemont IL real estate agent by your side.  Contact Chris today for all of your Lemont IL real estate needs.

Lemont IL Real Estate Agent

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