Real estate myths that every buyer and seller should know.
Category Selling or Buying a Home
Everyone knows that selling or buying their homes is perhaps one of the most significant investments they can make. However, in a world where fake news and misinformation spreads like wildfire, it's essential to have the correct information on hand when entering the real estate market.
Whether you're a first-time homebuyer or an experienced seller, exploring the property market with accurate information is crucial. Homes of Distinction emphasises that understanding the facts can help avoid costly mistakes in the real estate market. So, let's dive into some of the most common myths floating around and offer practical advice to counter some of these prevailing fantasies.
Misconceptions in property investment
Real estate transactions are significant financial events, and misinformation can adversely affect your decision-making process. Let's separate the facts from fiction to help you make informed property investment decisions.
Most common myths you've likely heard about real estate
Myth One - Pricing your property at market or its real value is the best way
In a recent case, one of our property practitioners listed a property for under-market value with offers starting at R3.3 million. After introducing 27 buyers to the home and receiving five offers, the property sold for R3.5 million in just under two weeks. This proves that multiple buyers bidding against each other drives the price up.
Stats on this specific case:
- 3522 Property 24 Website Views
- 35 Leads
- 33 Enquiries
- 24 Views
- 5 Offers
- Myth Two - Property always increases in value over time
Contrary to popular belief, property values only sometimes rise. While long-term trends often show an increase, market fluctuations can lead to periods of depreciation. Economic conditions, local market dynamics, and property-specific factors all determine value.
Our blog page provides the necessary information on the latest market trends and practical real estate advice.
- Myth Three - The best time to buy property is in the spring
Spring is traditionally seen as the prime time for real estate transactions due to better weather and increased perception of attractiveness. However, each season has its advantages. For instance, winter may offer less competition and more motivated sellers, potentially leading to better deals.
Keep in mind that the best time to buy is when it aligns with your financial situation and market conditions, not just the season.
- Myth Four - The listing price is non-negotiable
The listing price is often viewed as a fixed number, but it is merely the starting point for negotiations. Buyers shouldn't be afraid to make offers below the asking price, considering the property's condition and market comparables. A skilled, genuine property practitioner can provide invaluable assistance in negotiating the best possible deal, regardless of how strict the seller may have set their terms.
Additionally, listing your property below market value can generate more interest and attract multiple buyers. This competition often increases prices, as seen in many successful sales. For more insights on strategic pricing and market trends, explore our blog for expert real estate advice.
- Myth Five - Paying as high as a 20% deposit
There is a prevailing notion that a 20% deposit is mandatory. However, this differs from the standard, let alone a strict requirement. The standard deposit rate is 10%, and, many lenders accept lower deposits, and some offer 100% financing for qualified buyers.
While a larger deposit can reduce monthly bond payments and long-term financial burdens, exploring all financing options is crucial to finding the best fit for your situation.
- Myth Six - Real estate agents are too expensive
For Sale By Owner (FSBO) might seem like a cost-saving option; however, FSBO homes often sell for less than those sold through a property practitioner. Property practitioners bring professional marketing, negotiation skills, and market knowledge, helping sellers achieve better prices and smoother transactions. The fact remains that the cost of a property practitioner's commission is often outweighed by the value they provide.
- Myth Seven - You should never buy the most expensive house in the neighbourhood
Buying the priciest home in the area is a good idea if you can afford it. It depends on the neighbourhood's potential for growth and your personal preferences. The key is to evaluate the property in the context of the local market, future development plans, and your long-term goals. Paying a premium can secure a desirable location and quality of life.
- Myth Eight - You must sell your current home before buying a new one
While selling your current home before buying a new one can simplify the process, it's not the only approach. Bridge loans and contingent offers are viable options that allow you to purchase a new home before selling your existing one. A contingent offer includes a clause stating that your purchase depends on your current home's sale. This can allow you to secure your dream home without the pressure of selling first.
- Myth Nine - A bigger home is always better
The notion that a larger home is always preferable needs to be reconsidered. Bigger homes have higher maintenance costs, utility bills, and property taxes. Assess your needs, lifestyle, and long-term financial plans before deciding on the size of your home. Sometimes, a smaller, well-located property can offer better life and economic stability. Be careful with your investments! Never bite off more than you can chew.
- Myth Ten - You don't need a home inspection if the house looks fine
A home inspection is a critical step when buying, regardless of the property's appearance. While everything might seem fine at first glance, inspections can uncover hidden issues, such as structural problems, electrical faults, or pest infestations, that may not be visible during a casual walkthrough. Skipping this step can lead to costly repairs and regrets down the line.
- Myth Eleven - You don't need Building plan approval from council
Understanding which building plans require approval is essential for any property owner. While minor renovations may not need formal approval, significant structural changes typically do. Consult local authorities and professionals to ensure compliance with regulations and avoid legal complications.
Keep your head above water, don't take anything at face value, and do your research! With the right tools and experts by your side, you can approach property investment with confidence and clarity. Partnering with experienced real estate professionals ensures you receive the guidance to separate fact from fiction and achieve your real estate goals.
Are you looking to buy or sell your property? Visit our website https://www.homesofdistinction.co.za/
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https://www.homesofdistinction.co.za/agents/ or pop by our offices for a chat. Our friendly property practitioners are always available to assist in this regard.
Homes of Distinction CC holds a Fidelity Fund Certificate issued by the Property Practitioners Regulatory Authority (PPRA).
Author: Bryce Anderson
