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Equal Housing Opportunity

MYTH vs REALITY
Don't Let Misinformation Wreak Havoc On Your Real Estate Deal

Home buyers and sellers often bring misinformation to the table when it's time to strike a real estate deal. While well-meaning friends and neighbors may have your best interests at heart when they pass along a "good tip," you'd be wise to get the facts straight from your real estate agent. Here are a few of the myths that crop up--and often get in the way--as we help our clients buy and sell their homes.

Myth: My home will appraise at the same value whether it is in good condition or not.

Reality: Although square footage, number of rooms and other non-cosmetic features determine a home's baseline value compared with properties recently sold in the area, appraisers will factor the home's condition into the final appraised value. More importantly, your home's condition will determine how many buyers become interested in the home and how motivated they are to buy it. Most buyers prefer homes in "move-in" condition. Those that need more work frequently sell below market prices.

Myth: Being "pre-qualified" for a loan is the same thing as being "pre-approved."

Reality: When lenders pre-qualify home buyers, they simply run a few numbers to determine an approximate purchase price the buyer can afford--no lending commitment is in effect.

Sellers prefer a buyer who is pre-approved because it means the lender has collected and analyzed most of the documents and information necessary to make a loan commitment, assuming a few additional requirements are met (type of property, maintained credit rating, etc.).

Myth: Pricing a home above its market value leaves room for inevitable negotiations.

Reality: If your home is priced right, you won't have to negotiate! Buyers will have looked at other homes in the area and will know your home is worth what you are asking. Though they may still try to negotiate, they'll pay your realistic price if they like your home.Overpricing simply turns away buyers who could otherwise afford your home--and extends the time from listing to contract.

Myth: It's better to wait to buy my "perfect" home than settle for a lesser home that fits in my current budget.

Reality: If you have the cash and credit to purchase a home, there's no time like the present. Most buyers benefit from home appreciation, which leverages a relatively small down-payment investment into a nice return at sale time--when you may be able to move up to a home that is closer to your idea of perfection. If you choose to wait, the home you dream about could become even more expensive and remain out of your reach while you continue making rent payments.

Myth: Qualified buyers should be able to get their own financing.

Reality: Offering financing can help young buyers, and those with limited cash, afford to purchase your home. While it is important to check credit reports and income before agreeing to provide a first or second mortgage, sellers can offer financing "incentives" to get their homes sold in tough markets without dropping the price below market value.If you're thinking of buying or selling a home--or you simply have questions about our area's real estate market--please give us a call. We'll help you separate fact from fiction--and avoid any "myth-understandings."