The world of real estate (not to mention high-end luxury real estate) has been growing at an exponential rate in recent years. According to the National Association of Realtors, over 1.6 million Realtors are active in the U.S. as of 2022, while about three million people hold a real estate license of some kind. That makes the real estate industry one of the most popular in the country for professionals of all ages to join.
But with so many people in real estate searching for buyers and sellers on the market, there’s no wonder that so many real estate myths have sprung up. We’re here to share an insider’s guide to the truth about the real estate industry. Let’s get started!
Myth #1: Selling FSBO is a good idea
The first entry on our list of the most common real estate myths in the U.S. and around the world has to do with a strategy that many people new to buying and selling homes sometimes use. FSBO, short for “For sale by owner,” is a method of selling a property without engaging the help of a professional real estate expert. While many homeowners choose to adopt this strategy, it’s only been successful for a number of conventional homes.
Luxury real estate, on the other hand, is rarely bought and sold by the owners themselves. Not only are the closing contracts, financial details, and negotiations more complex in the world of high-end real estate. These deals are also much more demanding from a planning and research perspective.
An expert Realtor will be an invaluable resource to have on your team. They’ll be able to connect you with a wide variety of other real estate pros in your area, like contractors, home inspectors, lenders, and attorneys. What’s more, they’ll have insights into your local market to better identify motivated buyers and draw up a selling strategy that will net you the highest offers.
Myth #2: All home improvement projects have the same ROI
The perfect time to asset the condition of your house and to perform improvements you’ve long waited to complete is when you end up selling your home. But it’s important to understand that not all home improvements will yield you the same benefits. It’s a good idea to craft a list of upgrades and renovations that are necessary and another list of those that aren’t. From the list of necessary upgrades, pick out the ones that will bring in the highest return on investment. Below, we’ve outlined the top eight projects for high ROI:
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Minor or major bathroom remodel
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Landscaping overhaul
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Minor or major kitchen remodel
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Convert your attic to a bedroom
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Entry door replacement
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Deck or patio addition
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Remodel or add a bedroom to the basement
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Replace windows
Myth #3: You need to make a 20% down payment
If you have the financial health to be able to comfortably put 20% of your new home’s sale price down as a first payment, that can be a good decision. By doing so, you can avoid paying for mortgage insurance. But it’s by no means necessary to pay 20%. In fact, the median down payment among all home buyers in 2023 was 14%, with people under age 32 putting down only 8%. There are numerous mortgage loan programs on the market right now that make it much easier to receive funding or aid in some form, especially if you’re a first-time home buyer.
Myth #4: Mortgage preapproval can be a disaster for your credit
This is one of the most pernicious real estate myths because it can cause some potential buyers to shy away from starting their real estate journey before it even starts. In fact, the truth about this topic is much more detailed. Mortgage preapproval, for one, is very important to receive if you’re going to make serious offers on the open market. The preapproval document will let sellers know that you have gone through all the proper channels to obtain financing.
It’s true that you’ll get a so-called “hard inquiry” on your credit score when you start the process. That step will cause your credit score to dip, but only slightly and only for a brief time. The benefits far outweigh the drawbacks of this credit check, and you don’t have to go through it more than once after you receive preapproval.
Myth #5: Never sell in the winter
The United States is home to some of the most diverse landscapes and climates in the world. As such, real estate sells differently depending on where you live. It’s an age-old adage that spring and summer are the high points of the real estate year. But that’s only true if you live in a part of the country where spring and summer see more people visiting open houses and exploring their neighborhoods for new homes for sale. In other parts of the country, the fall and winter are preferred because tourists are rarer and buyer demand is at its height. Speak with your real estate agent to learn more about the ups and downs in your local market.
Myth #6: Unless you have children, school districts don’t matter
The health and success of local school districts aren’t only important for people with children at home. Actually, researching the strength of nearby schools and universities can be an excellent way to learn more about property values, security, and even walkability in your area. Good school districts are a sign that the local economy and its leaders care about their future generations, and a rising sale price of homes often accompanies neighborhoods with top-quality schools.
Myth #7: You need perfect credit to buy a house
This final entry on our guide to myths in real estate comes to us from the world of finance. If everyone buying a home today had to wait until their credit was absolutely perfect before they closed on a deal, there would be almost no home sales day to day. It’s essential to be realistic about your financial situation and to communicate any questions you may have about financing to your agent and your lender as soon as possible. Of course, your credit isn’t going to be faultless. Instead, focus on improving your credit by making regular bill payments and keeping as much credit unused as you can.
Reach out to a local real estate agent today
We hope this list of the most common real estate myths today will help you better navigate your own real estate journey whenever you choose to start it. If you have any questions or comments, or you’d like to learn more about Central Ohio luxury properties, get in touch today! Contact The Nth Degree Team for more information.
