I’ve debunked a lot of misconceptions in the course of working with umpteen homebuyers and conducting 50+ how-to-buy-a-home seminars. And I’ve been supplying practical tips through this newsletter for five years.
The bottom line — commonly held real estate myths can cost you money…and the home you have your heart set on. Here are five of the biggies.
1. The best homes aren’t listed on the MLS.
Homebuyers are led to believe that exclusive off-market properties are where the action is. In San Francisco in 2015, all together nearly 6,000 properties changed hands (TICs, co-ops, condos, single family homes, multiunit buildings, land). Best estimates say that less than 2% of these sales were non-MLS listings.
That means 120 properties truly sold “off market.” Spread across the city’s 10 neighborhoods and property types, that equates to just six condo/single family home sales per district last year. As a buying strategy, off market is well overhyped.
Also, much of what is touted to be an off-market listing is only temporary. Most times, the listing agent eventually brings the home on the MLS. Who has the time for all of this nonsense and gamesmanship?
2. I’m not getting a mortgage preapproval because it will downgrade my credit score.
Lately credit bureaus have lessened the slightly adverse, temporary impact of ‘recent inquiries’ on credit reports. Now, you’ll experience a slight dip, six to 10 points, and for just two to three billing cycles (around 60 to 90 days).
Here is what happened to me. Only after making an offer on my home four years ago, did I discover an issue that caused me to lose out on the best financing terms. An outstanding $78 Amex bill sent to an old address ended up costing me a lot of money. The moral? You have far more to gain than lose by working with a trusted loan advisor early in the homebuying process. Also, ask me how a post-approval letter can elevate your offer to the same status as cash.
3. I’ll use a discount brokerage to save money.
Last time I heard a buyer say this, they saved a few hundred dollars through a deal at Costco. Sounded good, but a year later they contacted me in an effort to sell their home and discovered that they had severely overpaid for it. Their discount agent did not know the condo complex or her job well. Getting out from under their dog of a property was a rough road, compounded by nearly $100,000 in anticipated losses. I think they finally decided to rent it out.
4. All real estate agents know construction and renovation.
Nope. Unfortunately there aren’t a lot of former general contractor/agents out there. It’s a specific skill set, and I feel good about bringing a construction pro’s eye and resources to clients’ homebuying process. Only when you get an insider’s assessment of a potential home, can you understand its real cost. Remember, acquisition strategy differs from ownership strategy.
5. Price is the only thing that matters to a seller.
Happily, sellers respond to a variety of factors, so we can create a winning bid by combining elements such as:
- an expedited closing
- buyer pre-inspections
- your agent’s strong working relationship with the listing agent
- offering the seller rent-back and other accommodations
- a professionally written, emotion-stirring letter to the seller, with photo
Watch out for truisms that keep you from owning the home of your dreams. I’d be pleased to help you cut through the noise and get down to business. Phone or email me to start the conversation.
Certified Residential Specialist
Ackerman Realty Group
Cell (415) 730-3030