Are you new to real estate? Read this article to steer clear of common myths that can fog your judgment…
When there’s so much money at stake in real estate, it’s no surprise that misinformation about it has become so common…
There are apparently dozens of myths about the real estate business going around the internet right now.
These myths, believed to be true, are behind so many bad property deals for people trying their luck in real estate without prior experience.
This needs to stop!
If you’re a first-timer in real estate this article is for YOU to read. Why?
Because in this article we’re going to bust the FIVE most common myths about real estate so that you can avoid them and think realistically while engaged in this business.
Read to protect yourself and turn up your success prospects in real estate!
So, let’s burst the first bubble…
1) ‘For Sale By Owner’ Saves Money
Yeah, that’s a myth and a BIG one…
A survey in 2020 showed that the houses that were sold by owners without any agents’ services went for an average of $217,900.
Whereas (are you ready?…), those that got sold with the help of an estate agent went for an average of $295,000.
$77,100 is quite a lot of money, isn’t it?
You could lose thousands of dollars trying to sell your house all alone.
A broker or agent will take their cut, BUT it’s clearly worth it in the end. You cannot match their expertise, experience, and skills when it comes to selling houses for top dollar.
So, no you won’t save by not hiring a property agent, in fact, you’ll lose…
As far as buying without an agent though, it’s actually possible to do it well today –
Websites like AQRE Home make sending offers and conducting real estate transactions easier than ever, getting an agent as a buyer is more and more becoming a personal choice.
2) Open Houses Sell Homes
Many home sellers believe that having an open house is the only way to sell fast.
That was the case in 1919 when open houses first became popular…
But it’s just not true today!
Your real estate agent might push you to have an open house on Sundays and you may think it’s for your benefit, but it’s most likely NOT the case.
The thing is that agents see an opportunity to grab new clients through open houses – that’s why they insist on having them.
According to the National Association of Realtors, only 2% to 3% of houses sell through open houses.
And on these platforms, as much as 90% of properties sell without the buyer ever setting foot inside!
Considering that, it’s (perhaps) safe to say no to an open house approach.
3) A 20% Down Payment Is A Must
That’s another real estate urban legend!
Having enough cash on hand to put down 20% upfront is great (and ideal) but it’s definitely not the norm.
The market is pretty well stocked with all the different kinds of programs that require a down payment of as little as only 3.5% of the total value, like the FHA mortgages, and as little as 5% in Canada if you are buying a home for personal use.
The rest of the purchase cost is paid by your mortgage lender like AQRE Lending (www.aqrelending.ca), who you pay back over time.
4) Pre-Approval Is Secured After Spotting Your Perfect Home
What a ludicrous myth that is anyway, but most still think it’s true.
In reality, getting pre-approved for a loan is not done after you’ve chosen your dream house, it’s done before you even begin house hunting.
There are three reasons behind that…
First, you’d HATE falling in love with a house that you later find to be out of your price range, right?
So it’s important to find out your mortgage approval amount before you let your dreams get ahead of you.
Secondly, pre-approvals in the US can take as long as 10 days, so get the process started early so you don’t miss out on a great deal.
And, thirdly, in case of a bidding war, those with a pre-approved loan always have an edge over the other bidders since they have real proof of their buying power.
(To read more about this, check out our article on 11 Ways to Win Without Exceeding Your Mortgage Approval Amount)
5) Agents Can Only Show Listings from Their Own Firm
For instance, an agent representing Howard Hanna, a US real estate company, can also show the properties listed with other companies like Keller Williams Realty, etc.
So, there goes our last myth, exposed and busted!
Now, what did you take away from this article? Did you believe any of the myths that we de-bunked?
See… No matter which business you’re in, if you let yourself get fooled by myths you’ll be on the losing side for sure.
So read, study, analyze, and be well informed when you begin your journey in real estate.
The above five are not ALL the myths, they’re just the top ones. So keep an eye on others, and let us know if the comment if there are any big myths we missed!
When you’re ready to explore the real estate market in your area (or across North America!) take a look at AQRE Home’s growing list of properties.
And if you’re looking for more help to get started as a buyer, seller, or renter, contact us at firstname.lastname@example.org or at +1 (844) 424-AQRE (2773).
We hope to see you succeed in real estate soon!