The world of real estate is full of information, but unfortunately not all of it is accurate. Whether you’re buying, selling, or just taking a look at the real estate market, it’s important to have all the facts. Here are some of the most common real estate myths debunked.
Myth: You shouldn’t get pre-approved for a mortgage before putting an offer in on a home.
Getting pre-approved for a mortgage will not only show sellers that you’re serious, it will put you ahead of the game when looking for a home.
If you’re worried about taking a hit to your credit score, know that you can shop for multiple mortgage quotes within the same time frame and have them be treated as one quote. Check out our Shopping for Mortgage Quotes article for more details.
Myth: The only time you should list your house is in the spring.
While spring is traditionally the busiest time of year for real estate, it’s not necessarily the best time. There’s more competition for buyers and sellers, and selling in spring may not be the right time for you personally.
Real estate is conducted year round, and a well priced and well marketed house can move quickly in any other season. Don’t limit yourself to just selling in the spring, especially if it’s not a good time for you and your family.
Myth: You need a 20% down payment to buy a home.
In Canada, there are minimum down payments required when purchasing a home, but a 20% down payment is only mandatory if buying a home priced at $1.5 million or more. For homes purchased between $500,000 and $1.5 million, 5% is mandatory for the first $500,000 of the purchase price and 10% for the remaining portion above $500,000. For homes purchased at $500,000 or less, a 5% down payment is mandatory.
A 20% down payment will help you avoid Canada Mortgage and Housing Corporation (CMHC) insurance premiums, which can save you money if you’re able to afford it. However, if you can’t do 20%, you can put down less and pay for mortgage insurance.
It’s important to weigh the long-term costs of your down payment and insurance fees, as a lower down payment can cost you more in the long run.
Myth: A great house will sell itself.
Many sellers think that their home is so beautiful that any buyer walking through will be sold just from looking at it. While it’s true that a great house will shine during a house tour, you have to actually get people to enter the home–and that requires smart marketing.
Even a gorgeous house can be made dull with badly lit photographs and poorly planned out marketing. A good agent will set up everything you need to successfully sell your house, such as professional photography, brochures, online marketing, etc.
Myth: All real estate agents are the same.
While we’re on the topic of agents, let’s debunk the myth that all agents are created equal. Ideally, you’ll want to choose an agent with experience selling in your area. Knowing the market is half the battle when it comes to selling a home, so picking an agent who can help price your home well and make it look its best is crucial.
Additionally, some agents specialize in certain areas of real estate. For example, some agents only deal with commercial properties, while others have unique experience selling certain types of properties, like multi-units or vacant land. Choose the agent that can help bring the most to the table for your property.
Myth: The highest offer is the best offer.
While it makes sense that you would want to sell your home for as much as possible, the highest offer may not necessarily be your best option. Sometimes you’ll find more favourable terms in an offer with a lower buying price, so look over the agreements carefully with your agent.
Myth: It’s a good move to skip the home inspection.
A home inspection isn’t an absolutely necessary part of every deal, but it can save you a lot of headache down the line. In hot markets, buyers who are willing to waive the home inspection often have an edge over those who don’t. While this may be the only way to keep your offer on the table in some situations, it’s not usually recommended. Again, it’s best to consult with your agent and adjust your strategy based on the deal.
When it comes to real estate, knowledge is power. Going into the market as either a buyer or seller with all the facts will not only make your experience smoother, but can also save you money.
