More and more home buyer’s are turning to the internet to find their new home and it can certainly provide a wealth of information regarding the home buying process. However a lot of the information is general, doesn’t necessarily apply to the state or even the county the home buyer is interested in and sometimes is flat out wrong. Below are nine shocking facts most home buyer’s don’t know about, but absolutely should when buying a home.
9 Shocking Facts Home Buyer’s Don’t Know
Property Taxes will be Reassessed
While the property taxes for the current year or previous year are listed right on the MLS listing a lot of home buyer’s don’t realize that is not the amount they will be paying. Now a buyer may stay on a seller’s tax bill for the remainder of the year, depending on when they close, but the property taxes will be reassessed the following year. In my experience property taxes are roughly 1.75% to 2.25% of the purchase price. So if a buyer purchases a home for $400,000 and the current owner’s property taxes are $3,000 a year the taxes will definitely increase, most likely more than double, once reassessed.
HOA Fees Matter
If a home buyer is obtaining financing HOA (Homeowners Association) fees can easily make or break a real estate transaction. Not all home buyer’s are looking to purchase a home that belongs to a HOA, but for the ones who are it’s imperative they have a discussion with their lender and find out how HOA fees might impact their financing. I’ve had clients approved for $300,000 without a HOA fee factored into their approval and once it was their approved amount went down, sometimes by $60,000.
Real Estate Websites aren’t Accurate
The original source for real estate listings is the MLS, which syndicates to thousands of websites that have an IDX feed. However not every website with a IDX feed receives new listings immediately and some aren’t updated regularly, so the information being displayed may not be accurate. This is just one reason why a home buyer might receive a notification for a new listing only to find out it was listed 4 days ago and is already under contract. In addition some of these real estate websites allow anyone to add or change information, including scammers, so once again the information being displayed may not be accurate.
Online Home Value “Estimates” are Wrong
The home value “estimates” listed online are just that, estimates. Typically these estimates are calculated from sales around the area, which may or may not be comparable. Since this number is provided by a computer, and not a Realtor, it does not factor in things like condition, lot location, amenities and more. So when home buyer’s are doing research online it’s best to ignore these types of estimates.
Seller’s Pay the Real Estate Commission
It is customary for home seller’s to pay the entire real estate commission. The only time a home buyer would be responsible for paying a commission is if they agreed to do so in writing. A great example is if buyer signed a buyer broker agreement with their Agent and it states their Agent’s commission is “X,” but the commission the seller is offering is less than “X” the buyer would be responsible for paying the difference.
Saving Money going Directly to the Listing Agent
A big misconception in real estate is a buyer will save money if they go directly to the Listing Agent, but a lot of buyer’s don’t know the real estate commission is negotiated before a home even hits the market. So some agents will “double dip” when a buyer goes directly to them, which means they get the agreed upon listing commission and the selling commission being offered in the MLS. Occasionally an agent may have agreed to discount the total commission if they find a buyer, but it doesn’t always translate to a home buyer saving money. Plus, depending on the listing agent/ seller relationship they may only be representing the seller and their interests, not the buyer’s.
Finding the Listing Agent Online
Almost every REALTOR has their own personal website with an IDX feed, which syndicates ALL real estate listings to their website, not just their personal listings. So when a buyer finds a listing on a REALTORS website odds are it’s not their personal listing, so buyer’s shouldn’t get upset or accuse the REALTOR of false advertising because they are not the listing agent.
Your Lender Matters
In a competitive real estate market the lender a buyer chooses, if obtaining financing, could impact a seller’s decision especially in a multiple offer situation. However even in a less competitive market some seller’s are reluctant to entertain offers from home buyer’s using a lender who is out of state, unrepsonsive or just doesn’t have a good reputation.
Not all Properties Qualify for Financing
Not all properties qualify for certain types of financing and not all seller’s will accept certain types of financing, which is just one of the many reasons home buyer’s need to have their financing in order prior to looking at homes. A great example of financing restrictions are condos, many condo communities in our area don’t allow FHA financing and most requires the buyer to put down at least 20%-25%.
The home buying process can be very confusing and stressful especially if you’re going at it alone. If you want to avoid unnecessary problems let us walk you through the entire buying process, from start to finish.
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— Michelle Gibson (@WellingtonHomez) October 19, 2017
Additional Home Buying Resources
Below are several great home buying articles written by leading real estate professionals from around the country.
- 7 Smart Things to do Prior to Buying a Home by Paul Sian
- Should I go with a Mortgage Broker or a Bank by Conor MacEvilly
- 10 Common Mistakes First-Time Home Buyers Make by Xavier De Buck
- Home Buying at a Glance by Sharon Paxson
- How Schools Impact Home Prices by Anita Clark
- Certain Homes Can DISQUALIFY Your Mortgage Pre-Approval by Luke Skar
- First Time Home Buyer Tips by Bill Gassett
- What Happens at a Real Estate Closing? by Lynn Pineda
- Don’t be Left in the Dark when Buying your First Home by Maria Mastrolonardo
- 5 Real Estate Contingencies you Need to Understand by Joe Boylan
- 10 Deadly Home Buying Pitfalls by Kevin Vitali
- Top 7 First Time Home Buyer Mistakes by Kyle Hiscock