The start of the 2019 home buying and selling season is officially upon us! If you are looking to purchase a home there are always a lot of things to consider, especially if you are a first time home buyer. The buying of a home is typically an individual’s largest purchase to that point – one huge life decision! We have purchased two homes and are beginning the search for house number three (by beginning I mean checking my real estate apps every night before bed with no purchase intention for a good 6 months still). While I truly feel that if a person is in a stable financial position, buying a home is the way to go over renting, there are still many factors to consider and a lot of myths out there as to the real cost of home ownership. Read on to see some common real estate myths and how they may or may not be true for you in your home ownership venture.
Myth #1: You need a lot of cash to buy a home.
There are a couple significant benefits to having saved-up and prepared for this major purchase: 1) the more cash you have the less of a financial strain a monthly mortgage is going to be and 2) having 20% to put down avoids having to purchase private mortgage insurance (PMI). The myth in this one is a large down payment is not REQUIRED. You will likely be able to still get a good rate with 5% or 10% down and a good credit score.
Myth #2: ALL the accessible cash you save should go toward a down payment.
There are almost always other costs you will have to absorb when planning a home purchase and/or move. In some cases you might be able to get the seller to pay all closing costs, but don’t count on it. Additionally, it is wise to plan for moving expenses, minor repairs and yes, even major repairs are sometimes overlooked in an inspection and simply cannot be anticipated. We did not anticipate having to put in a new AC unit within a month of purchasing our second home and the unit we replaced was not even 9 years old (warranty was up at 8 years, go figure). Thankfully we had maintained a modest emergency fund when making the purchase and had the necessary cash to cover the expense.
Myth #3: The local school district is only important if you
When we purchased both our homes, we did not yet have kids, however, we did look into our local school district. This is important to keep in mind because your local school district has a direct correlation with your home value; you will also find the most desirable homes and neighborhoods in the best school districts. Also, the better the school district the more resilient your home value will be and the more leverage you will have when it comes time to sell.
Myth #4: The home inspection is nothing to worry about.
If you are the home buyer the home inspection is very important. Home inspectors provide the expert insight you need to understand if there are any structural risks and ensure all systems are up to code. And just an FYI… as the home seller you may find this process somewhat frustrating and find yourself amazed at how much “up to code” can change in less than three years! Either way, it is a valuable step in the home purchase that cannot be overlooked and required to obtain a mortgage. When buying a home you should make sure you are present at the inspection to point out things that may be of concern to you.
Myth #5: Peak house hunting season is the spring.
Spring is definitely a busy season as people want to get out, explore and are drawn to the new listings and open houses. It is the time of year for growth, change, and all things new and that is what likely starts the home search frenzy, however, often later in the year is where the bargains can be found. If a home has been on the market since the spring, there is high likelihood the home seller is willing to be more negotiable come the fall months. Additionally, most people do not want to move during the midst of the holiday season making those late fall and early winter months a perfect time of year to snag a deal on the home of your dreams as you’ll face less competition from other buyers.
Myth #6: A real estate agent is not worth paying for.
As per my first blog post “Why Hire a Pro”, real estate agents have the expertise to handle the unexpected things that come up in the home buying/selling transaction (there will be the unexpected). They have an inner network of professionals to help with each step along the way and they are able to provide unparalleled insights into the housing market, likely well beyond the reaches of your own research. My husband and I have always worked with an agent in both the buying and selling of our homes and even though we know the process pretty well now, I would not have it any other way. You may have a friend, family member, or your cousin’s father in-laws sister who is an agent, but if you want someone who doesn’t know all the family drama and will provide exceptional customer service and the expertise you need, reach out to one of the agents at 1 Degree Realty. They are fantastic and would love to help.