2022 Real Estate Myth Buster

May 27, 2021
Last updated:
January 4, 2022
In This Article

The real estate market is full of myths that simply aren’t true, but are believed by many. Unfortunately, these misconceptions can cloud the judgment of buyers and sellers, which can negatively affect their deals.

Here are some common misconceptions about real estate

Myth #1: It’s better to get pre-approved after you find the perfect home to buy.

REALITY: You should get pre-approved before you begin your home search.

In fact, getting a pre-approval letter from a mortgage lender is one of the first things you should do. You may want to get in touch with a lender before you even speak to a real estate agent.

Getting a handle on your finances and understanding where you stand in terms of your budget and how much you can afford is crucial. Getting pre-approved will help you get familiar with your financial situation. That way, you’ll know exactly what your price range is and which homes you should focus on.

There’s no point wasting your time on homes that are way out of your price range. You’ll just end up disappointed after putting in an offer and finding out that you can’t secure a mortgage at that price point.

A pre-approval will also allow you to act quickly when you’re ready to make an offer. Once you know that you have your finances and mortgage lined up, you can put in an offer with confidence. It makes your offer stronger to sellers, too.

When sellers see that you are already pre-approved for a mortgage for a specific amount, they’ll feel more comfortable knowing that you’re a qualified buyer. This can come in handy, especially if it’s a competitive market for buyers.

Myth #2: Always start with your lowest offer when buying a home.

REALITY: In a competitive market like we have today, you may not get a second chance.

It’s a common strategy for buyers to put in a lower offer in order to leave some room for negotiation. And while that tactic may work in a regular market, it might be futile in a competitive seller’s market.

In this case, you may want to put your best foot forward and offer at least very close to what your maximum offer is. And if you’re in the midst of a bidding war, you’ll want to offer your highest amount, as there may not be time to go back and forth in negotiations.

Myth #3: It’s better to price your house on the high side when you’re selling.

REALITY: A house that’s priced competitively will likely sell faster and attract multiple offers.

All sellers want to get the highest price for their home. But that doesn’t mean they should arbitrarily price their home at a sky-high price. Doing so will compromise their ability to sell. That’s because buyers who may be qualified to buy a home at its current market value will gloss over that listing if it is priced way too high.

Most buyers won’t pay much more for a home than what it’s worth, and if you list your home far above what it’s valued at based on the current market, you’ll lose out on buyers and offers.

And the longer your home sits on the market without an offer, the more likely the listing will go “stale.” Eventually, you may have to drop the price, which might make buyers think there’s a problem with the home.

Instead, if you price appropriately, the odds of attracting more eyes on your listing will be greater. And the chances of getting a solid offer are also higher. This will help you sell faster and potentially receive multiple offers at the same time.

Myth #4: Renovating your house will definitely net you more money when you sell.

REALITY: Some renovations may be necessary, but not all of them.

Certain upgrades can help add more value to your home, but you have to be careful of the type of renovations you do and how much you spend on them. If you spend far too much fixing up your home, the odds of you recouping all that money when you sell are not very high.

You can only sell your home based on what the surrounding area dictates. Over-improving your home will probably not bring you the sale price you are looking for, nor will it be enough to cover the cost of what you spent on upgrades.

Your trusted agent can advise you on what’s important to fix before you sell, and what’s not.

Myth #5: It’s safe to skip the home inspection if the house looks good.

REALITY: You shouldn’t skip the inspection. It can uncover hidden problems that might cost you down the line.

When you visit a home before you put in an offer, you’ll want to do a thorough walk-through to look for any potential issues. But there can always be problems that are not obvious that you may not notice. That’s why having a professional home inspector go through the home and take a few hours to thoroughly inspect it can be extremely helpful.

If a major issue is found, you’ll have some recourse, such as requesting that the seller rectify the problem, asking for a credit so you can fix the problem on your own, renegotiating a lower price, or walking away from the deal altogether. Without a home inspection, you could be stuck with a very expensive problem that your finances may not be adequate enough to fix.

2021 Real Estate Myth Buster

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