If you’re a CVG frequent flyer, you may have seen a pervious post, 10 Things You Might Not Know About Buying A House – our list of 10 buying rumors that need to be squashed.
On a similar note, we think it’s time to talk about some of those ever common home buying myths. The widely held, but false beliefs and ideas that center around the home buying process and experience.
So, without further adieu…
8 Home Buying Myths | DEBUNKED.
Myth #1
Online portals like Zillow, Realtor.com, Redfin and Trulia mirror the MLS
It’s true, the online portals are an excellent tool (we even encourage them).
And for the most part, they do reflect what’s available for sale, but they’re not always 100% accurate. A few things to keep in mind:
- Many homes that are in escrow, but not all contingencies have been removed, show as available – however they are not, in escrow, essentially means sold.
- Some companies/agents opt out and don’t include all their listings to online portals.
- General Margin of Error: Zillow etc. manages millions of homes across the country, there’s bound to be a mistake or two.
Tip: I like to set my clients up with an MLS portal. It’ll catch any homes that may fall through the cracks.
MLS: The Multiple Listing Service (MLS) is the direct portal all agents use to list homes for sale. It can only be accessed by licensed agents and brokers, which is good news – that makes it the most accurate and up to date portal available.
Myth #2
“I’ll save money if I buy directly from the listing agent”
The seller always pays the entire commission and it’s usually split 50/50 between the two agents.
Here’s the myth: If you work with the listing agent directly, you’ll get a portion of the commission towards the house. It makes sense, right? One person gets 100% of the commission so there’s room to share/negotiate.
The truth:
- Most listing agents won’t split any commission with you.
- The listing agent has a contract with the seller, not with the buyer. That means, the agent’s loyalty lies with the seller first, not the buyer.
Tip: There are many ways to negotiate price and a fair deal. Find an experienced agent who knows the area well and has established relationships with listing agents. You’ll be better served in the long run.
Myth #3
Having my sister-in-law from another area represent me is a good idea
Truth be told, it’s not. And I tell my out of the area friends and family the same thing.
You’re likely making the largest purchase of your life. Local knowledge and relationships between agents is key to finding the right home and avoiding costly mistakes.
Plus, it’s hard to give full attention from the outside. The next family get together may be a bit awkward, but they’ll get over it 🙂
Tip: Ask your local agent if they would be willing to pay a referral fee to your sister-in-law. Then ask her to split it with you. Now everyone wins!
(Read: The 6 Hidden Areas of Expertise Your Agent Needs to Have)
Myth #4
Acting “indifferent” is a good negotiating strategy
This is the “car lot” strategy. When buying a car, we’ve all been taught to act indifferent. Willing to leave and go to another dealer unless we get the deal we want. But homes aren’t cars.
There aren’t thousands of other homes just like it ready to buy, nor is there a factory somewhere pushing out new houses every year.
In CA, the buyer can walk within 17 days after the offer is accepted – this can be scary to the seller. Sellers want to know you really want the house and that you’re unlikely to cancel. Otherwise they’ll wait for a more motivated buyer.
Tip: If the house has been listed for several months with no offers, a little indifference may help. But if it’s a new listing with 3 offers on it, indifference will likely set you up for a loss.
Myth #5
Lowballing my initial offer will result in a lower sales price
The opposite is often true. Emotions run high during a real estate transaction.
A low offer can leave the seller feeling insulted. Pushing them to ignore the offer altogether, or dig their heels in on a price that is higher than they would have accepted if the initial offer was better.
Tip: Of course there are times when a very low initial offer is warranted – like a highly overpriced home. But if the asking price is reasonable and you’re just looking for a steal, chances are it will backfire.
(Read: What Should I Offer on the House? It Depends)
Myth #6
It’s the seller’s responsibility to fix-up things in the house
Homes in CA are sold “as is” meaning the seller doesn’t have to make repairs. But remember, you have 17 days to perform inspections and finalize the sale. If your inspections uncover issues the seller is unwilling to fix, you can cancel and get your money back.
Tip: In Los Angeles and Ventura County, the seller is only required to strap the water heater for earthquake safety, install smoke detectors, install carbon monoxide detectors. That’s it. (Read: Best Strategy to Get the Seller to Make Repairs)
Myth #7
I can cancel if the seller damages the home on the way out
Within the last 5 days of escrow, you’ll do your “final walk through” to make sure the home is in the same condition it was when you bought it and that any negotiated repairs have been completed.
In the very rare instance the seller lets the grass die or damages the walls on the way out, the agents will negotiate for a certain amount of the seller’s proceeds to be withheld in escrow until the repairs are complete.
Tip: Many buyers worry about this walk through, but it’s almost never an issue. In fact, it’s usually an exciting part of the process for the buyer. And if the seller is there, they often open-up to share a few tips & tricks on your new home.
Myth #8
Sellers must deliver the house to me clean and ready to move in
Oh how we wish this were true. Unfortunately there is nothing in the contract that outlines how the home is to be delivered to the buyer. Fortunately most sellers will have the home professionally cleaned, or at the very least, broom cleaned. But if they don’t, there’s nothing we can legally do about it.
Tip: Find out ahead of time how the seller intends to deliver the house. If they’re not going to clean, at least you’ll know and you can schedule accordingly.
Buying myths and misinformation is everywhere.
I’ll answer any questions you might have,
and I’ll help you find and buy your new home
