2023 Real Estate Myths
In the ever-changing landscape of real estate, myths and misconceptions often cloud the path to homeownership. If you’re aiming to achieve your dream of owning a home, it’s essential to sort fact from fiction.
This article sheds light on some stubborn real estate myths somehow still alive and kicking in 2023. The goal is to help you make informed decisions as you embark on your home-buying journey.
Myth 1: Buyer’s Remorse and Stress is Widespread
Non-homeowners may find themselves disproportionately anxious about purchasing the wrong home. Surprisingly, 45% of them express concern about this, whereas only 20% of current homeowners report experiencing buyer’s remorse.
Similarly, around 78% of non-homeowners anticipate stress in the home-buying process, yet only 47% of homeowners validate this sentiment.
Myth 2: Understanding Market Values
While 73% of Americans deem homes unaffordable, a significant 60% underestimate the actual median home price. A mere 14% correctly pinpoint the range between $400,000 and $499,999. Intriguingly, those who haven’t yet owned homes are 15% more likely to gauge the price correctly.
Exploring market trends and listings, they emerge as more knowledgeable about current home prices compared to established homeowners.
Myth 3: Neglecting Home Inspection
A home inspection can safeguard against future maintenance expenses by confirming a home’s condition before the purchase is finalized. Astonishingly, 33% of homeowners believe that an inspection is dispensable if you’re adept at identifying potential issues.
Myth 4: Dependence on Home Warranty
Countless buyers lack the expertise, time, and tools to conduct a comprehensive home inspection. A common misconception is that a home warranty fully covers repairs. Unfortunately, such warranties often cover only a fraction or none of the costs. This revelation can be unsettling for the 37% of Americans who wrongly assume that a home warranty offers complete repair coverage.
Myth 5: Overestimating Down Payment Requirements
While mortgage lenders suggest a 20% down payment, a staggering 62% of Americans perceive it as a strict requirement. Remarkably, 21% contend that buyers must exceed this threshold, with 6% believing a 30% down payment is obligatory. Notably, non-homeowners (8%) are twice as likely as homeowners (4%) to embrace this misconception.
In reality, no universal minimum down payment exists, as requirements vary based on loan types. Some loans backed by entities like the Federal Housing Administration accept as little as 3.5% down. The U.S. Department of Agriculture and Veterans Affairs-backed loans even allow for no-money-down options.
Nonetheless, 72% of non-homeowners incorrectly believe in the necessity of a 20% down payment, discouraging potential homebuyers who consider it unattainable.
Myth 6: Saving for a Down Payment
Around 23% of non-homeowners anticipate that saving for a down payment will be the most formidable hurdle in their home-buying journey. Strikingly, just 8% of current homeowners affirm this sentiment. This stark difference positions non-homeowners as three times more likely than homeowners to perceive down payment savings as the most challenging aspect of homeownership.
Myth 7: Navigating Negotiations with Sellers
Approximately 6% of non-homeowners who haven’t owned homes before anticipating that negotiating with sellers will be their primary challenge. This misconception often stems from the belief that buyers are primarily responsible for seller communication.
In truth, this role falls to the buyer’s real estate agent, leading to surprises for 24% of homeowners who expected more interaction with sellers. Furthermore, the assumption that the highest offer is always the best remains widespread, with 48% of Americans subscribing to this belief.
Myth 8: High Credit Score Requirement
A sizeable 32% of Americans assert that a credit score of at least 700 is a prerequisite for home purchase. In reality, buyers can qualify for a conventional loan with a credit score of 620. Interestingly, 66% of Americans incorrectly associate high credit scores with loan qualification, a misconception held by non-homeowners at a rate 14% higher than homeowners.
Notably, certain loan programs, such as those backed by the Federal Housing Administration, accept buyers with credit scores as low as 500. Loans from the U.S. Department of Agriculture and the U.S. Department of Veterans Affairs have no minimum credit requirement, although individual lenders may establish their standards.
Connect with Your Local Embrace Home Loans Professionals
In the midst of these real estate myths, it’s crucial to arm yourself with accurate information. For a clearer understanding of your options and to embark on your journey to your dream home confidently, consider reaching out to an Embrace Home Loans® professional. They possess the expertise to guide you through the complexities, helping you navigate the path to homeownership with clarity and assurance. Your dream home might be closer than you think, and with the right guidance, you can turn it into a reality.