The real estate market is always evolving, and as a result there are several misconceptions about the industry. Purchasing a home remains a key piece of the American dream and is definitely achievable for many buyers, but it’s important to make informed decisions before going into the real estate process. These common myths often hinder a potential buyer’s desire to seek homeownership.
Myth 1: Cash Offers Always Get a Lower Price
Making a cash offer does not automatically lower the price of a home; however, it may reduce the amount of time it takes to close on the home. Just because a buyer is offering cash, does not mean the seller needs to offer a discount.
Myth 2: Wait Until Mortgage Rates Go Down
Mortgage rates are influenced by a wide range of factors, including economic indicators and policy decisions far beyond the average homebuyer’s control. Waiting for rates to fall could mean missing out on finding the perfect home as inventory will change during that waiting period. The best strategy is to buy a home when there is personal financial stability.
Myth 3: I’ll Get a Better Deal When Prices Go Down
Real estate prices fluctuate based on supply, demand and sometimes the economy. Waiting for an economic downturn or other dramatic change in the market to purchase a home, may seem logical, but trying to base a purchase on an economic prediction is impossible. Plus, if or when prices go down, the competition among buyers only heats up.
Myth 4: I Can’t Find Anything in My Price Range
Fortunately, in central Indiana, there is a wide price range for good, quality homes that many people can make their home buying dream a reality. Sometimes, finding a home within a specific price range may require adjusting expectations regarding size, condition or location, but compromise also allows entry into homeownership and building equity. The best chance potential new home buyers have of finding a property within their budget is to work with an experienced agent who will respect the budget and find suitable homes to consider.
Myth 5: I Have to Have a 20 Percent Down Payment
The idea that a 20 percent down payment is a strict requirement is perhaps one of the most prolific myths in real estate. While putting down 20 percent can save on private mortgage insurance (PMI) costs, many programs buyers to put down as little as three to five percent. For first-time home buyers, there are even more assistance programs available that may make homeownership a reality sooner than anticipated.
Understanding the realities of home buying can make the process easier and more achievable. It’s important to make informed decisions in order to find a dream home and begin building equity. The right time to buy a home is not when someone else says it’s time. The right time is when the homebuyer is financially and emotionally ready to take on the responsibility of homeownership.