More and more home buyers are turning to the internet to find their new home. It can certainly provide a wealth of information regarding the home buying process. However, a lot of the information is general and doesn’t always apply to the area the buyer is searching. Below are nine shocking facts most home buyers 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
The MLS listing will show the current property taxes for a home. However, what a lot of buyers don’t realize is this won’t be the amount they’ll be paying. Now a buyer may stay on a seller’s tax bill for the remainder of the year, depending on when they close. However, property taxes will be reassessed. 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.
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 buyers are looking to purchase a home that belongs to an HOA. Although for the ones who are it’s imperative they have a discussion with their lender. They need to find out how HOA fees might impact their financing. I’ve had clients approved for $300,000 without an HOA fee factored into their approval, but once it was their approved amount went down.
More Shocking Facts
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 an IDX feed receives new listings immediately. In fact, some websites aren’t updated regularly. So the information, including the status of a home, may not be accurate. This is another reason why a buyer may receive a new listing notification that is already sold. In addition, some of these real estate websites allow anyone to edit 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. 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 buyers are doing research online it’s best to ignore these types of estimates.
Sellers Pay the Real Estate Commission
It is customary for home sellers to pay the entire real estate commission. A buyer would only be responsible is if they agreed to do so in writing. Here’s a great example; a buyer signed a buyer broker agreement stating their agent will get paid “X” commission. However, the seller is offering a commission below this amount. In this case, 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. This is one of many real estate myths because commission is negotiated before a home is listed. So some agents will “double-dip” when a buyer goes directly to them. This means they get the listing commission and the selling commission. 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 buyers.
The Last 3 Facts!
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 buyers 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 sellers decision, especially in a multiple offer situation. However, even in a less competitive market some sellers are reluctant to entertain offers from home buyers using a lender who is out of state, unresponsive 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 sellers will accept certain types of financing. This is just one of the many reasons home buyers 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 require 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 Real Estate Advice from Top Professionals
- While Xavier De Buck discusses the most common mistakes buyers make Paul Sian shares things buyers can do before purchasing a home.
- There are many steps to buying a home and Sharon Paxson shares the home buying at a glance.