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10 Common Myths Shared By First Time Homebuyers
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Click Manual link below for a detailed explanation of the process of buying a home in Virginia ... A "must" for First Time Buyers as well as experienced investors
 ***VA Home Buyers Manual***  |
MYTHS COMMONLY BELIEVED BY FIRST TIME BUYERS:
Myth #1: ALL REAL ESTATE AGENTS ARE THE SAME.
Many buyers think that anyone who holds a real estate license is equally capable of assisting them in buying a home. But I would ask them, “Does everyone with a driver’s license operate a vehicle the same way?” Of course not. Both drivers and real estate agents are licensed by their state. But just as drivers approach the road differently, so can real estate licensees vary considerably in how they approach their job. In a similar vein, real estate designations indicate that an agent has completed advanced training, which is usually a sign of higher competence. After all, would you rather hire an accountant or a certified accountant? Still, designations don’t necessarily guarantee a higher level of service. So if buyers want to avoid the risks involved in believing that we’re all the same, they should take the same advice that most sellers employ- - interview at least three agents before you make an informed decision about who you want to work with. |
Myth #2: THE AGENT ON THE FOR SALE SIGN WILL LOOK OUT FOR MY INTERESTS.
You would think that all the changes in agency disclosure laws over the years would have altered the way consumers approach buying a home. But....most buyers and especially first-time buyers, still don’t understand the concept of representation and mistakenly believe that a listing agent will watch out for their interests. Unfortunately, buyers are still more likely to shop for homes rather than shop for an agent who will assist them in finding a home. |
Myth #3: I CAN FIND ALL PROPERTIES FOR SALE ON MY OWN.
As more and more first time buyers search for and preview properties online, the myth has grown that they can find every property they may be interested in on their own. But not all available properties are advertised, or have a sign. Overnight updates to many online listing sites can lag behind real-time developments. |
Myth #4: IF I JUST WAIT LONG ENOUGH, I’LL FIND THE PERFECT HOME.
There is no such thing as a “perfect” home. Buying a house requires compromises, a big dose of reality, and an awareness of market conditions. But first time buyers, in particular, don’t always understand this. They’re more focused on the enormity of the decision- - they’ve never made such a substantial purchase before and they really want to get it right. Make a point of asking buyers how they want to proceed. Do they want to do all the watching, letting me step in to help them get the home after they’ve identified one? Or do they prefer that I do all the looking, letting them know if something comes up? |
Myth #5: I’LL IMPROVE THE ODDS OF FINDING THE HOUSE I WANT IF I WORK WITH MORE THAN ONE AGENT.
First-time buyers, eager to canvass a market for all possible homes and (again) not really understanding buyer-representation, can mistakenly rationalize that they might as well have several different real estate agents searching for them. Before you know it, a buyer ends up seeing the same house with two different agents, creating confusion over who is doing what for the buyer and who earns cooperative compensation. We explain buyer representation to buyers, so everyone is clear about who is working together and how. |
Myth #6: BUYING A HOUSE IS AS SIMPLE AS AGREEING ON A PRICE AND SIGNING A FEW PAPERS.
If only it were that simple! However, first-time buyers don’t always appreciate that purchasing negotiations can involve many other issues beyond price. Nor do buyers realize how many other steps are part of the purchase process after the contract is signed, including loan approvals, appraisal, title search, home inspection, etc. Helping a buyer move a transaction successfully from contract to closing takes a lot of effort! Buyers need to know what to expect, right up front, so they don’t encounter any unpleasant surprises. |
Myth #7: FORECLOSURES OFFER THE BEST DEAL.
With so many more foreclosures taking place, and so much media attention focused upon them, it’s not surprising that many buyers assume that foreclosures are a good deal. But the fact is, some are overpriced. And some have undesirable conditions attached to them. To determine whether or not a foreclosure truly offers a good value requires considerable research and due diligence. |
Myth #8: GETTING A MORTGAGE SHOULD BE QUICK AND EASY.
Many first-time buyers question and resent the whole lending process. They ask, “Why do I need to provide that?” and “Why do I need to jump through all these hoops?” Their resentment seems to have less to do with thinking they’re entitled to a mortgage, and is more about feeling annoyed and impatient. Even if a buyer is seeking a loan from a bank where they’ve been a long-time customer, the fact remains that their mortgage will very likely be sold off in the secondary market to an investor who doesn’t know them, but expects to see complete documentation on creditworthiness. (**note...in our market, a seller expects even an “all-cash” offer to be substantiated by a third party). |
Myth #9: ALL MORTGAGES ARE ESSENTIALLY THE SAME.
Given the recent attention on borrowers who are struggling to live with ballooning adjustable-rate mortgages, you’d think that more first-time buyers would be attuned to the notion that mortgages are not all alike. They key questions are: How does one rate compare to another over the long haul? How long will you be in your home? What are your long-term investment goals? Does a 15-year versus a 30-year program measure up against your goals? Does an adjustable rate mortgage make sense, and if so, what’s the best time frame? First-time buyers often don’t look at enough options before they buy. In assuming that all mortgages are the same, they deprive themselves of making a fully-informed decision. |
Myth #10: IF SOMETHING APPEARS ON THE INSPECTION REPORT, THE SELLER HAS TO FIX IT.
Because buyers often make an offer contingent upon an inspection, many buyers believe that sellers must fix anything that shows up on the inspection report. And inspector sometimes aggravate the situation by including subjective information in their reports, or declaring that the house is a good or bad deal, instead of providing a straightforward, detailed list of observations. An inspection report can trigger re-negotiations on the house. |
| Source: REBAC, Today’s Buyer’s Rep, October 2008, Randy Templeman |
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