The home buying process can be an intimidating and daunting process for many buyers. Unfortunately, this leads to plenty of opportunities for buyer misconceptions throughout the process. A recent report from Clever indicated that 83% of buyers were surprised by aspects of the home buying process. Furthermore, 62% of buyers reported having to change their priorities while 65% of respondents reported having to change their budget.
According to this study, buyer observations were as follows:
- The average age of a first-time home buyer is 36. (Most Americans believe it would be much younger.)
- 73% of Americans do not believe that homes are affordable right now.
- 34% of homeowners paid more for their home than they originally planned
- In addition to their mortgage, average homeowners spend about $13,150 annually on home-related expenses—such as utilities, maintenance, and improvements.
- 32% of Americans believe that you need a credit score of at least 700 in order to buy a home. In reality, buyers can qualify for a conventional loan with a score of 620.
- I need a 20% down payment. This is not always true. There are many mortgage programs that allow you to put down less than 20%, such as FHA loans and VA loans.
- Home prices are always going up. This is not always the case. Home prices can go up and down, and there have been times in the past when prices have actually decreased.
- I should wait for the housing market to crash. This is a risky strategy. There is no guarantee that the housing market will crash, and waiting could mean missing out on an opportunity to buy a home.
- I need to get pre-approved for a mortgage before I start looking at homes. This is not necessary. You can start looking at homes without being pre-approved, but it’s a good idea to get pre-approved before you make an offer. This will show sellers that you are serious about buying a home and that you are likely to be approved for a mortgage.
- A mortgage pre-qualification is the same thing as a pre-approval: This is certainly not the case. In a nutshell, a pre-approval is a more thorough review of a buyer’s financial qualifications. Unlike a pre-qualification, a pre-approval includes a thorough check of consumer data such as a credit check.
- I can get a better price by not using a real estate agent. This is perhaps one of the most common misconceptions we see. In fact, the data shows you are more likely to get a better price when being represented by a local and knowledgeable real estate agent. This may also be the case for new construction home purchases through sales centers. Oftentimes, these developments will add extra incentives in order to attract more real estate agents to their communities.
Buying a home will likely be the biggest investment in your life. For this reason, it is extremely important to educate yourself on not only your local housing market, but also the home buying process. Don’t fall into the trap of buyer misconceptions listed above! In addition, hiring a local and knowledgeable real estate agent will be paramount to your success.
Are you looking to buy a home in the South Florida area? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your smartphone or tablet.