Some common real estate myths have been behind a multitude of lousy property deals for people trying their luck in real estate without prior experience.
Verily, real estate is one of those unlucky businesses that suffer from the curse of misinformation pretty often.
Well, 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 (drop the ignorance and…) turn up your success prospects in real estate. So, let’s burst the first bubble!
1) ‘For Sale By Owner’ Selling Saves Money
Yeah, that’s a one of real estate misconceptions and a BIG one.
A survey in 2020 showed that the houses that were sold by their owner without taking any agent’s services went for an average of $217,900.
Whereas, those that sold with the help of an estate agent went for an average of $295,000.
See the difference?
You could lose thousands of dollars just believing that you can sell your house all alone.
A broker or agent will take their cut, BUT that’s worth it. 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.
2) Open Houses Sell Homes
Well, many sellers of real estate believe that having an open house can help them sell faster.
Drop it, that’s not just true!
Your real estate agent might also 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.
So, to check on real estate myths and facts, according to the National Association of Realtors, only 2% to 3% of houses sell through open houses.
Considering that, it’s (perhaps) safe to say no to an open house approach.
3) A 20% Down Payment Is A Must
That’s one of the biggest myths about real estate – in fact, a real estate urban legend!
Having enough cash at hand so you can put down 20% upfront is great (and ideal) but that’s definitely not the norm.
There is a good stock of all the different kinds of programs that require a down payment of as little as only 3.5% of the total value. For example, the FHA mortgages.
Next…
4) Pre-Approval Is Gained After Spotting Your Ideal Home
What a ludicrous real estate myth that is anyway, but still most think it true.
So, getting pre-approved for a loan is not done after you’ve chosen your dream house. It’s done before you even begin your house hunting.
Actually, there are two reasons behind that.
First, you’d HATE to fall in love with a house that you later find to be out of your affordability, right?
And, secondly, in case of a bidding war, those with a pre-approved loan always have an edge over the other bidders. Since they have the proof of their buying power.
5) Agents Can Only Show the Listings on Their Firm
False!
A real estate agent can not only show the listings on their company but they can also show any listing that is listed multiple.
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!
The Takeaway!
Now, what do you take away from here?
See, no matter which business you’re about to set foot in, if you let myths fool you, you’ll be on the losing side for sure.
So, read, study, analyze, and become well-informed when you begin your journey in real estate.
The above five are not ALL the common real estate myths, they’re just the top ones.
So don’t just lie back if they’re not applicable for your area. Because there could be other myths loitering about in your area.
Be sure not to fall for them!
