Let's think about some ideas people believe are true but are actually not when it comes to the home buying process. You know what I mean, things that may make sense on one level (and, in fact, in some circumstances), but not so much when you really contemplate how to get the best deal on your next home. Let's think through these topics:
Myth: The first thing I should do if I want to buy a house I see online is call the Realtor® on the listing.
o False!
When you call the listing Realtor®, you are attempting to Employ them as your own. But employing the listing Realtor® as your (buying) Realtor® is like telling a judge that you want the other person's attorney to represent you too!
You need someone on your side of the aisle if you want a fair deal when purchasing a home. You need to find your own Realtor®. So, do your homework:
→ Ask friends for recommendations
→ Ask AI for a Realtor in your area
→ Look for advertising as you drive the area you would like to live
→ Look for Realtor websites
Be sure to interview a few Realtors® before you make your
selection.
→ Since you are tied to the person you sign with for a specified length of time, you need to feel comfortable working with them.
→ Remember, you can limit the amount of time for the contract with your Realtor® and re-sign with them if it takes longer than expected to find your property.
Myth: If I sign with a Real Estate Sales Agent (or Realtor® if the Agent belongs to the National Association of Realtors), I can switch to another Agent whenever I choose, and nobody will care.
o False!
When you "sign with an Agent" you are signing a contract to pay that Agent (broker) a specified commission for the service of finding your next home within a specified amount of time. Therefore, you are bound to that contract for the specified duration of time.
If you were to purchase a home using a new Agent while still under contract with the first Agent, you could be made to pay commission to Each Agent - Yes Each of them!
Here's an example: If you signed a contract with "Agent A" for a 3% commission but then decided you didn't really like that person. So, you sign a contract with "Agent B" (also with a 3% commission) and buy a home within the contract period of the contract with "Agent A", then you would be legally bound to give "Agent A" a 3% commission while also giving "Agent B" their 3% commission. That's a total of 6%!
Myth: If I don't have perfect credit, I can't buy a house
o False!
Quality Loan Officers will have access to loan programs for people from all walks of life:
→ Individuals with poor or little credit history
→ Contractor or Self-Employed individuals
→ W-2 Employees
Myth: The property tax listed is the amount I will pay for property tax
o False!
People often look at the property tax amount as a reason to buy (or not to buy) a particular property. It needs to be understood that the property tax stated in the listing is what the current owner pays and the buyer's property tax bill will not be the same as the current tax bill.
→ The current owners may have a Homestead Exemption or may have owned the property for an extended period of time (in the state of Florida, after the first year of home ownership, your property tax is only allowed to increase by 3% per year whey you are allowed to claim a homestead exemption)
What should you expect for property tax?
→ Barring new legislation, the general rule of thumb is that your annual property tax bill for the year of ownership following the purchase year will be equal to 1.9% of home sale price (I like to round this up to 2% for ease of calculations). So, if you buy your home for $800,000, then you may expect an annual tax bill of $16,000. Again, this is only a rough approximation, and your tax bill may vary. But you need to know your tax bill will not be the same as what the current owner pays.
Myth: If I don't like what you see from the street, I should simply move on to the next property
o False!
If you simply drive away, you could be driving away from a bargain your Realtor® was trying to lead you toward. Your Realtor® knows bargains in the area and they know your needs. What they need more than anything is your feedback so they can better refine the results they give in the future.
→ Bring your concerns to your Realtor®
→ Your Realtor® can write an offer with contingencies or allowances for different aspects of a home that are below par (roof, driveway, landscaping, paint, flooring, etc.)
→ Your Loan Officer may have specific loan opportunities that allow you to borrow additional money for the express purpose of bringing a property up to par (for instance, maybe it needs new paint, or a new kitchen, or flooring, etc.)
