Homebuying Myths
Thinking of buying real estate or currently in the process? Check out these most common real estate myths when buying a home.
Myth: A great offer is all about high price
Yes and no. For some sellers, it may be all about what the seller nets on the sale. Some sellers may be looking for something else. If you’re buying a home and taking out a mortgage, keep in mind that unless your appraisal is waived, the home still has to appraise for at least purchase price. Many sellers know this and often times the highest offer (with no other competitive terms) may not always be the best offer. It is important to work with a highly experienced Agent who helps buyers and sellers in your local market and knows what it usually takes to win a multiple offer situation.
Myth: I’m a non-contingent buyer, I have a better chance of getting the home
Some buyers will say, “I’m a non-contingent buyer.” What the buyer really means is that he/she/they is/are not contingent on a home to close or sell before purchasing. It is important to note that there are almost always contingencies on a contract and a purchase. For a cash buyer, the contract still may be subject to Attorney review and home inspection (Illinois is a Real Estate Attorney state). For a buyer taking out a mortgage, the contract is still subject to Attorney review and home inspection in addition to being contingent on financing an an appraisal, in most cases. The majority of buyers in the local market (however, it depends on each specific market, property type, price, etc.) are not contingent on a home to close or sell first.
Myth: It is so competitive, buying a home now isn’t a good idea
Mortgage rates are low. Low mortgage rates create a great opportunity for prospective home buyers looking to have more buying power. The lower the rate, the more buyers can usually afford. There were mortgage rates as high as 18% – 21%…compare that to what they are now…rates are historically low.
Myth: I can view a home, get a pre-approval or proof of funds later later
That is incorrect – as a buyer it is imperative you have a current (within the last 30 days) loan pre-approval letter from a local, reputable lender if you’re taking out a mortgage. You will need a current proof of funds letter if you’re a cash buyer. Both need to be for at least the purchase price on your offer – many sellers want to see the letters be even higher than purchase price. Not only do sellers expect buyers to be pre-approved or have that proof of funds letter, it is not uncommon for sellers to want to see the letter before confirming a showing.
If you’re looking to buy or sell in the Lake Geneva, Fontana, Williams Bay area or the Chicago suburbs, contact Kristine Glockler, The Glockler Group. Additionally, she has a vast network and can help connect you to a professional Real Estate Agent throughout the United States.
Kristine Glockler, REALTOR, RENE, ABR, e-PRO, PSA, ACP, CNHS, RCC
Lake Geneva, Williams Bay, Fontana and suburban Chicago Real Estate, Coldwell Banker Realty
