Americans spend more money on housing than anything else, and when making one of the largest financial decisions of your life, it’s wise to weigh your options. You need to understand current market conditions and arm yourself with the right information. This has always been true when it comes to buying and selling homes, but it’s even more crucial in today’s real estate market. The pandemic has impacted every industry in the U.S., and the real estate industry experienced a series of changes. While there is a wealth of information online about financing, buying opportunities, and selling in our current climate, not all of it is accurate.
Here are the five most frequent real estate myths I’ve been hearing from clients:
1. Less competition. There’s a myth right now that there’s less competition for houses because people are being forced to stay home and put major life plans on hold. However, the opposite is true; buying a home right now is very competitive. Many current homeowners are also looking to capitalize on lower interest rates and refinance. This has overwhelmed lenders and lengthened the average closing time. If you’re looking for a house, I recommend getting pre-approved as soon as possible so you’re ready to jump when you find the right property. Due to competition, homes are selling quickly.
2. People aren’t selling their homes during the health crisis. While recent industry data suggests that 77% of potential sellers are planning to sell their houses following the end of all stay-at-home orders, many don’t want to wait. With self-service options becoming more readily available, more sellers can start re-entering the market sooner.
3. The economy is going to crash. With this comes the belief that the housing market will crash too. While we don’t know the full effects of the crisis yet, it’s clear that the real estate market is in a much better place than it was in 2008. During the Great Recession, Americans had many subprime loans, which resulted in an influx of buyers who purchased properties with very little money down. Today it’s typical for buyers to put down as much as 20%, so they immediately have equity built up in their home. Even if a current homeowner had to sell their house due to an unforeseen circumstance such as a job loss or relocate, they would likely still be able to walk away with money in their pocket.
4. Home prices have dropped dramatically. Though I’ve heard a lot of talk about buyers waiting for prices to drop, that hasn’t been the case in our market. In fact, we’re seeing buyers getting into bidding wars to purchase homes. That doesn’t mean you can’t still find a deal, but be prepared to come to the market with a full-price offer, and in some cases even more.
5. It’s unwise to buy a home sight unseen. Though it may seem strange to put an offer on a house you haven’t stepped foot in, technology has made it possible to get a true sense of the space, and with health and safety top of mind right now, we have a lot of safety measures in place for home shoppers. One way to see a house better is to do a Facebook Live, Zoom, or other virtual session with a tour. There’s been a 41% increase in virtual communication, and more buyers are relying on virtual tours. In addition to the tour, it’s always a great idea to request floor plans with dimensions and/or photos that show different angles of the rooms. People are also using tools such as Google Maps to view the layout of the neighborhood and do virtual drive-bys. All these programs help you get a good idea of the home without visiting in person.
Don’t fall for these myths if you hear them. Remember to always have the most accurate information when entering the real estate market.
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