Common Misconceptions About Real Estate

by | Feb 27, 2024

When you are considering buying or selling a home, there are lots of resources providing information about what that process looks like. Oftentimes, that information is not always true. Here are some of the most common misconceptions we often hear. 

#1 Selling your own home is easy and you will save lots of money. 

It certainly is possible to sell your home on your own, but it can be challenging, time-consuming, and oftentimes, “leave money on the table”. A knowledgeable and experienced real estate agent will be able to navigate you through the entire process. They will do their research and then create an effective listing strategy from that. They will offer services to best market your home including photography, videography, staging, signage, cleaning, etc. They will be able to effectively communicate with you throughout the listing process, and when the time comes, negotiate the best price for your home. 

#2 All real estate agents are the same.

No, all agents are not the same. Sure, it is easy to get your real estate licence and many think it’s just as easy to buy and sell property. The truth is, it takes knowledge and experience for an agent to be able to best represent you. On top of that every agent has their own distinct personality, skills, and background. Choosing an agent that is best suited for you is important if you want the best experience. 

#3  The down payment is all you need. 

The minimum down payment for a home is 5% of the purchase price (20% if the home is over one million dollars). Many buyers do not realize that there are other expenses they need to be prepared for.

  • The Deposit – When your offer is accepted, a deposit must be provided to the listing brokerage within 24 hours after acceptance. The deposit amount can be up to 5% of the purchase price & many buyers are not aware this is money that they need readily available. 

  • Closing Costs –  It is a general rule of thumb to set aside approximately 3% of the purchase price of the home for closing costs.This includes lawyer fees, property adjustments, land transfer tax (buyer side), etc. (Learn how land transfer tax is calculated by clicking here.)

  • Moving Fees – Consider if you will move your home yourself, or if you will hire movers. Will you need boxes, tape, or labels? Don’t forget to set up mail forwarding, as well as utility and service hook ups. 

  • Realtor Fees – The seller is responsible for the commission paid to realtors. The lawyer handles the management of this on closing day. 

#4 Spring is the best time to sell.

Most sellers believe that they need to wait until spring to list their home, because that is when most buyers will be out looking. Well this can be true, it is also when inventory is at its highest & you are now competing with other sellers. Whereas when you list in the late fall or winter, there tends to be less inventory & less competition, and as we have seen in the past years, still buyers wanting to buy. An interesting point to share, historically, listings and sales are at their lowest in December. We then see these numbers climb in the new year. Most notably, the average sales price tends to incline in the first quarter of the year, and then slightly dip in the spring, when the number of listings increases. 

#5 Buying an investment property will guarantee you passive income.

One of the more popular ways to create passive income is through real estate… that’s what you have heard, right? The truth is, like most investments, there is a risk. Are you ready to be a landlord? What happens if you get tenants that don’t pay their rent, or if there are major repairs needed on the property? If you decide to sell your investment property, are you prepared for the capital gains tax? There are a lot of things to consider when buying your first investment property. Understanding that this type of investment is not for making money overnight but should be considered as a long term investment. Speaking with an experienced realtor is your best first step. 

These are just a few of the more common misconceptions in real estate. If you liked this article, or would like to learn more, feel free to send us an email.