There are endless misconceptions that people hear about when it comes to Real Estate, and these misconceptions can sometimes deter a person from buying or selling a home. A few months back we covered five common myths, and we are bringing you five more that we wanted to put to rest. Is there a myth that you feel we should discuss? Let us know in the comments!
A minimum of a 780 FICO® score is needed to buy a home: Of course, the higher the credit score the better when it comes to buying just about anything. However, it doesn’t necessarily need to be as high as most people believe (a recent survey showed that 59% of Americans either don’t know or are misinformed about what FICO® score is needed to qualify!). As the chart shows 53.2% of approved mortgages had a credit score between 600 – 749, so don’t let your credit score stop you from trying to buy.
The only upfront cost when purchasing a home is the down payment: This isn’t always the case, as the seller may decide you’re responsible for the closing costs, which can total anywhere between 3 – 6% of the purchase price, and these costs can vary depending on your state. Also, you may have to consider costs for inspections, credit reports, insurance, and other fees and taxes that may be tacked onto the final cost.
A 30-year loan is always the best option: While many first-time home buyers choose a conventional 30-year loan, it may be worth looking at other options. A 15 or 20-year loan will allow you to spend less money on interest in the long run. However, a shorter loan term equates to higher monthly payments, so just be sure that you stay within your budget with whatever type of loan you choose.
Renovate the kitchen and bathroom before you sell: According to Remodeling Magazine’s 2017 Cost vs. Value Report, on average you will likely only recoup 64.8% of what you spend on a bathroom remodel and 65.3% of what you spend on a major kitchen remodel for a mid-range home. The biggest return? Insulating the attic with fiberglass recoups 107.7% on average! Potential buyers may not share your ideas or taste when it comes to a remodel, and the cost and time of redoing it again themselves may seem like a hassle or deterrent when buying.
You don’t need to prep a home before selling it: The first 3 – 4 weeks on the market are the most critical when selling a home, and the longer it sits, the more likely it is to develop a negative stigma. If a home is prepared to sale with strong marketing and a fair price, it should only be on the market for a few weeks. Do not make the mistake of listing your home before it’s ready! The majority of buyers are looking to purchase a home that’s move-in ready, so steps like basic cleaning, simple improvements and repairs, staging, and pre-listing inspections can help maximize the sale price while minimizing the time it sits on the market.