5 Home Buying Myths Every First-Time Buyer Needs to Know!

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You’ve been renting for what feels like an eternity!  You have been a great tenant…keeping the place clean, following the rules, paying your $900+ rent to the landlord on time, not making any big changes…all the while watching HGTV and dreaming of the day when you can get your own place and Chip and Joanna the crap out of it.  I’ve been there, trust me.  It feels like you’re crawling out of your skin with excitement.

So you turn off the TV and hop online to find your first home.  You’re finally doing it! Fast forward 4 hours later, with dark circles under your eyes, you proudly peruse the dream homes you have saved from Realtor.com, Trulia, Zillow, Facebook, Craigslist, FSBO…the list goes on and on.  But what do you do now?

Back online you go to browse forums for first-time homebuyers.  Horror stories, tips from folks who went on their own, blogs, etc.  Now the sun is rising and you realize you’ve spent all night researching but you pretty much feel like you are in the same spot.  “What the hell am I supposed to do, though? I just want to buy a house!”  Let’s start by tackling the top 5 home buying myths to give you the real deal, no BS process.

Myth #1: Buying a House is Hard

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Don’t get me wrong.  Nothing good in life is 100% easy.  It does take work to find your first home.  It does take work to get preapproved for that loan.  It does take work to coordinate your big move.  Buying your first home is a lot like meeting the love of your life.  You date around (showings), you find someone who just gets you and you go back for a second maybe even third date, you commit (write an offer), you get engaged (get a contract), and the wedding planning process begins (inspections, appraisal, negotiations) before you finally walk down the aisle (closing day).

When broken down like this, it doesn’t seem too hard, really.  The easiest part, is finding “the one.” The rest can get a little mucky if you’re going it alone.  That’s why, especially between work and your personal life, it’s good to have someone to “plan the wedding” for you so the process doesn’t swallow you whole.  Having a Realtor® on your side will make the coordination, negotiations, and road to closing easier for you.  But more than anything, it saves you time and your sanity.

Myth #2: I Can Get Preapproved After I Start Looking

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Yes, you can go and apply to get financing after you’ve found “the one.”  You may have been out and about looking for months and there it is.  NOW you are ready to apply for the loan.  I cannot tell you exactly how many buyers have done this, I would say about 30% in just my experience.  I know, it’s not the fun part.  It’s boring, but I think more than anything scary.  You don’t even know if you’re going to be able to get prequalified, and some stranger is about to look at your financial history since you became an adult.  If you take nothing else away from this, please, PLEASE, do yourself a huge favor.  Get preapproved before you start looking.  Here’s why:

  • The initial prequalification can be done online in less than 30 minutes.
  • Preapproval can take just a day or two, but only less than 30 minutes to compile your financial information to send to the lender.  They do the rest.
  • Most home searching is outside of business hours.  If you find the one during “off hours,” you’re SOL until the next business day.  And there is a chance another buyer who likes the same house is already approved for financing.  And they are submitting their offer while you wait for financing.
  • A hurried qualification process means more errors and road blocks during the contract to closing process.  Getting approved ahead of time gives you and your lender enough time to fill in the blanks and make the process easy.
  • Worst case scenario, not going to sugar coat: you can’t get qualified at all. For whatever reason, credit is too low, you have no credit, your job history isn’t strong enough, you have a high debt ratio…things you never thought about will come up in the approval process.  And now you’ve wasted months of your life chasing something that just can’t be done right now.  That’s time you can never have back.

Myth #3: I’m Going to Get That Move-In Ready Stunner That’s Way Over My Budget Down to My Price Point

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We’ve all heard this one…you mention to your cousin that you’re thinking about buying a house and she says this,”Oh, then you need to talk to my friend Jenny, because she had a friend who bought her dream home for $50,000 below asking price a few years ago. She can tell you how to do the same thing.” What your cousin fails to mention is that we were in a recession just a few years ago, foreclosures were the thing to buy.  If you look at the market now, foreclosures are few and far between.  And inventory is tighter now than it has been in years.  So what can you do?

  • Stay in your lane.  Once you know your budget, stay within your budget.  It used to be that you could stand to go a little over your budget so you and the seller could negotiate down.  Especially if you’re in the under $150,000 price point, chances are low that the seller is open to that scenario.  Mainly because there is at least one other buyer out there who is gunning for the same house.
  • Keep an open mind.  There are some dog houses out there.  I mean, some uuuuugly houses.  Green carpet, peeling wallpaper, pink toilets.  You know what I’m talking about.  But under the ugly is a true beauty, well-built and definitely within your price point.  Most buyers can’t look past the cosmetics, but if you can, you can get a great deal and something to really make your own.

Myth #4: Zestimates Tell Me What I Should Offer

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Zillow is one of the top home search websites.  It is there and it’s not going anywhere.  I’m cool with it, as a Realtor®.  I have made peace with it.  But it is an uneasy peace, to be honest.  The main reason is Zestimates can give false information on the true value of the homes they “market”.  Even Zillow admits it in the itty bitty fine print at the bottom of the page:

“The Zestimate is not an appraisal and you won’t be able to use it in place of an appraisal, though you can certainly share it with real estate professionals. It is a computer-generated estimate of the worth of a house today, given the available data. Zillow does not offer the Zestimate as the basis of any specific real-estate related financial transaction. Our data sources may be incomplete or incorrect; also, we have not physically inspected a specific home. Remember, the Zestimate is a starting point and does not consider all the market intricacies that can determine the actual price a house will sell for.”

The truth, you decide what you offer.  Your Realtor® can advise, give you the intricacies and real scenarios, but you decide in the end.  Use your Realtor® and their experience negotiating to come up with the best offer for you.  But mainly, just because it’s on the internet doesn’t mean that it’s true.  Always consult a professional for the best results.

Myth #5: I Don’t Need to Prepare for The Worst After I Move In

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Once you buy your own home, everything is on you.  You don’t have a landlord to fix things for you anymore.  You are your own landlord now.  If the water heater goes out, it’s up to you to fix it.  If the AC dies in the middle of the summer, you have to call the HVAC company.  However, there are some ways to cover yourself from the sticker shock.

  • Get a home warranty. The warranty will cover you for a year after your purchase for your appliances and systems in the house, including the heating and cooling.
  • Renew that home warranty! It’s the best money you will ever spend, I’m telling you.
  • Have your systems serviced regularly.  Once in the Spring and once in the Fall.
  • When all else fails, every pay check, set a little aside for the “Oh Shit” fund. Pardon in advance for the profanity, but what is the “Oh Shit” fund?  It’s for when the dog tears up your floors, when a fork gets caught in the disposal and tears it up.  It’s for the time the washing machine springs a leak and water soaks the laundry room.  It’s for the “Oh Shit!” moments in life.

Happy Home Hunting!

So, there you have it.  There are so many more myths in the home buying process, but this is just the short list.  Have more questions?  Don’t hesitate to message me at morgan.overcash@allentate.com.

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