Myths About Home Buying
Home buying can seem like a mystery until you go through it at least once. Myths abound that can make buyers nervous and skeptical of the whole process. Following are 6 myths I hear from buyers that are mostly bunk.
MYTH: If your inspection is terrible, you’re stuck with a lemon.
FACT: If a major defect is identified during an inspection, and the seller is unwilling to correct the problem to the buyer’s satisfaction, the buyer can typically walk away from the sale. However, both parties have to agree to release the money. This is why your real estate agent has to counsel you on the home, especially code-related issues such as grounded outlets, age and functionality of mechanicals, and biological contaminants (e.g. mold, radon, etc.). If and when an inspection turns sour, your real estate agent should advise you how to move forward.
MYTH: When you buy a house, you get possession 30 days after closing.
FACT: You get possession of your home when the contract stipulates you get possession. Typically, this is at the closing or within a week of the closing. There is no hard and fast rule, but 30 days isn’t the norm. This longer period was more usual in the earlier years of house sales. In the market, since I’ve known it, it is much more common to receive possession at closing or within a few days after. Some sellers and buyers will negotiate a “rent-back” scenario where a closing will take place and the seller will retain possession of the home, paying the buyer rent based on their agreement. There are some complications with rent-back scenarios, such as liability, insurance, etc. If a seller wants to stay in their home 30 days after a sale, buyers likely won’t bite.
MYTH: When I visit a house, I’m being watched.
FACT: While it is a fact that the owners of a house can have a video camera monitoring activity during an open house or visit by a prospective buyer, this isn’t a given. If you are concerned about being watched, it’s perfectly fine to ask the person who is showing the house if there is surveillance equipment around the house. Oftentimes they will not know the answer, as it doesn’t have to be disclosed by the seller. We like to abide by the rule “If you don’t have something nice to say, don’t say anything at all.” And simply mind your manners.
MYTH: If I buy an older home, I will have to replace the sewer line.
FACT: A lot of people looking for a home in the Meridian Kessler and Broad Ripple neighborhoods believe that a giant hole dug up in their front yard is in their immediate future. The fact is that it is not! While these areas of Midtown Indianapolis often do suffer older-home ills, you can take steps prior to buying a home to avoid a costly repair. During a home inspection, buyers can have a sewer or plumbing company scope the line to see if there are cracks or breaks. If these are present, you can ask the seller to fix them. Even if they don’t agree to fix them, such an inspection can save you from buying a house that will cost thousands of dollars down the road.
MYTH: I will only need to bring my down payment to closing.
FACT: I wish it were as cut-and-dried as that, but unfortunately there is more involved. There are costs associated with securing a loan and closing at a title company. Both are required for the majority of transactions. If you are paying cash, you can avoid the lender fees, but will still have to pay some title fees. Throughout your purchase agreement negotiation, you will determine different credits and costs.
For example, you will likely receive a pro-rated credit for your property taxes. You might also negotiate for the seller to pay some closing costs on your behalf. These credits, along with your earnest money deposit, will be added to the settlement statement, providing you with a clear picture of your debits and credits. So, at the end of the day, it may be a little less or a little more than your down payment.
Your buyer’s agent should talk you through this agreement before you ever begin to write one. When you are giddy about the huge walk-in closet and Jacuzzi tub, you are likely not paying attention to the legally binding document you are about to sign. I provide copies of all documentation to my buyers in our initial buyer consultation, before we ever look at a home. No one wants a surprise at closing.
MYTH: My real estate agent can’t help me if I buy an FSBO (For Sale by Owner) home.
FACT: Good news! As long as an FSBO seller is willing to work with a buyer’s agent (which most are), your agent can definitely help you. There is no charge to use a buyer’s agent. Commission (listing agent and buyer’s agent) is charged to the seller in Indiana. Just be sure to let your buyer’s agent be the liaison to any and all homes. If you have a buyer’s agent, call them and let them reach out to the sellers, FSBO and other listing agents.
What’s the home-buying myth that’s holding you back? Contact us to find out if it’s true.
