If you are a first-time home buyer congratulations! Buying a home is a tremendous first step in investing in your future and living independently. But as a first-time homebuyer, you have probably looked for advice from a number of people. There is absolutely nothing wrong with that except for the fact their advice might be dated or incorrect. The best people to ask for real estate advice are real estate agents themselves. Here are 5 common myths that you may have heard.
Myth #1 You Need To Put Down A 20% Down Payment
Fact #1 You Do Not Need To Put Down A 20% Down Payment
First time home buyers are often very intimidated about the idea of providing a 20% down payment. In Canada, you can buy a home with a down payment as low as 5%. However, the advantages of providing 20% are lower mortgage rates, lower monthly payments, appearing as less risky to sellers and increasing your chances of qualifying for a home. The only real drawback of putting down between 5 – 19.99% is that you will need to buy mortgage insurance. To learn more about mortgage insurance click here.
Myth #2 Real Estate Agents Are Expensive
Myth #2 Real Estate Agents Do Not Cost A Thing Until A Purchase Is Made
That’s right, working with a real estate agent might be the biggest bargain ever. Real estate agents are only paid a commission from the sale of a house. That means if you’re buying, you actually don’t even pay the real estate agent’s commission. The agent’s fee is paid by the seller upon the closing of the property.
Myth #3 Fixer Uppers Are Cheaper In The Long Run
Fact #3 Fixer-Uppers Can End Up Costing Your More In Time, Money and Effort
Homes that require a lot of work also tend to require a lot of money. The money you save from the initial purchase will inevitably be used towards renovating the house. Renovating takes a lot of time and energy and in many cases first time home buyers let years go by without taking on the projects they said they would. So, unless you are incredibly handy and ready to sacrifice your social life for 6-12 months, we encourage you to buy a house that needs few to no repairs.
Myth #4 Do Not Settle For Anything Less Than Perfect
Fact #4 You Can Turn A 7 Into 10 Overtime
As much as we would like to believe that there is the perfect house out there that would require zero renovations, touch-ups or new features that’s not always the case. Especially for a first-time homebuyer with a tighter budget, you will need to compromise. One of our mottos at Knowledge Broker is that you can buy a house at a 7 and over time turn it into a 10. That means buy a house with good bones and your top 5 needs then over the years upgrade it into the home of your dreams.
Myth #5 Your Parents Know The Best Agent Who Can Cut You A Deal
Myth #5 You Might Not Want To Work With An Agent Who Can “Cut A Deal”
We like to believe that our parents truly know what is best for us, but when it comes to making a decision on who to work with, we recommend you look for an agent yourself, especially if your parents insist that they can get you a great deal if you work with their agent. Agents who might “cut you a deal” often cut corners. They may decrease their level of service, restrict their hours or listen to your parent's needs over yours. This is your first home, not your parents. You need to know the real estate agent you’re working with has YOUR best interests in mind. Find an agent who you trust and could see yourself working with again in the future.
At Knowledge Broker, our goal is to create an open-source of information for all our clients. We want to ensure that, at the end of the day, they get exactly what they want and what they need. If you know someone who could use our help or services please put them in touch with us or send us their details using the contact information below. And before you go, click here to take the Knowledge Broker Quiz and see exactly what we can do for you!