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When it comes to buying and selling a home, there are many opinions on the real estate process. From when to sell to where to buy, how to negotiate and what to look for, there’s no shortage of information being thrown your way. Like with anything, what you read or hear isn’t always factual. Sure, it may be rooted in truths, but things can get twisted.
This is why we recommend contacting a REALTOR® to help you on your real estate journey. They’re the experts and can bring a multitude of professional experience, designations, and certifications to the table, helping you navigate an otherwise stressful process.
We reached out to a few REALTORS® across Canada to help provide some clarity on the most common real estate misconceptions.
Misconception No. 1: You shouldn’t call a REALTOR® until you’re ready to buy
It’s not uncommon to hear people say contacting a REALTOR® is the last step before you’re ready to buy, but in fact, it’s the opposite.
The sooner you’re equipped with expert knowledge, the better. The questions or concerns you have might be easily answered by a REALTOR® in seconds. More importantly, factors you may have been overlooking might be brought to your attention. Ask questions and get to know the person who will be assisting in one of your biggest purchases!
The best policy is to interview a few real estate agents if you don’t know or have one. Once you’ve chosen an agent to work for you, explain all your needs and make a list of your criteria, including desired areas.
My advice is to use your REALTOR® as a lifelong guide when it comes to real estate. I’d encourage buyers to start the process early, so when you’re ready to buy, you feel you have the knowledge and guidance already built in. I’m a huge believer in using data and past trends to help steer the future and it’s never too early to start familiarizing yourself with the market, process, and fundamentals that will make your future transaction successful.
Misconception No. 2: It’s OK to skip a home inspection
Home inspections aren’t mandatory when purchasing a home, but they’re recommended to help protect you in the long run.
New homes, old homes, all homes should be inspected thoroughly by a qualified inspector. Even brand new homes can have inspection deficiencies overlooked by the builder. Your inspection is an excellent tool to make sure you head into your purchase with your eyes wide open in terms of immediate necessary repairs and ongoing maintenance items.
It’s a terrible idea to skip a home inspection—the inspector will give you information about the mechanical and electrical systems, but they also have ways of seeing the issues we can’t on a simple visual inspection. The wall may look dry to the naked eye, but there could be water or a temperature differential in a certain spot that can be an indicator of a more serious issue. Get an inspection, speak with the inspector after they have inspected the property, and ask questions once you have read the report.
Misconception No. 3: Down payments are the only upfront costs
Saving for a down payment is what most people focus on when beginning their home buying journey—this isn’t a bad thing—but often we forget there are additional costs associated with the purchase of a property, and being unprepared for them could leave you in a tough spot.
There are a lot more fees you might not have thought of. Some examples of upfront costs are: home inspections, mortgage appraisals, property transfer tax (if applicable), GST (if applicable), closing lawyer or notary fees (if applicable), movers, cleaning, etc. While upfront costs are important, knowing about other hidden costs could make or break your homeownership experience.
– Joe Bae
Down payments are one of the closing costs. It may be the largest cost, but you still need to pay the lawyer to close the transaction, you have your land transfer tax which is a substantial cost and changes depending on your purchase price, and depending on the agreement of purchase and sale you may have an HST commitment.
– Daniel Engel
Buying in British Columbia, you’re going to have a few costs. The biggest will be Property Transfer Tax, followed by lawyer/notary fees, title insurance, and moving costs. Depending on the purchase price we typically recommend budgeting an additional 2% to 3% (of the home’s selling price) for closing costs.
– Casey Archibald
Misconception No. 4: Condos with cheaper fees are always better
Paying additional fees on top of your mortgage can be tough, but it’s not always worth finding the lowest condo fees in order to avoid those costs.
Reviewing condominium documents for the finances, reserve fund, and overall costs is important—a new owner doesn’t want a surprise assessment after they’ve taken possession. Higher condo fees usually mean the work has been completed and the building is well taken care of by the management company.
– Debra Presley
Condos with cheaper fees might not have an adequate budget or funding required to operate the building smoothly. This may eventually (or soon) lead to an increase of fees in the future. Secondly, the condo may not be performing all the recommended or required maintenance or repair work. On the other hand, it may not be contributing to the contingency reserve fund adequately, which may lead to a bigger lump sum payment called special assessment in the future. Instead of looking for the cheapest condo fees, you should put a cap on what fees you’d like to avoid, and make sure that the condo fees are being put to proper use.
– Joe Bae
It isn’t always the case and it’s important to look at what’s included in the maintenance fee and what the history of the building’s finances are. Building A may have a lower maintenance fee than building B, but building A regularly uses special assessments to fund repairs whereas building B has never had a special assessment and all utilities bills are included in the fee. It’s so important to look at what you’re getting for your monthly fee and have a lawyer look at the status certificate to see if there are any assessments or a history of them. Look at the whole picture, not just the dollars and cents.
– Daniel Engel
Misconception No. 5: Your list of wants is the same as your list of needs
Everyone has their idea of a dream home. Big windows! Three storeys! Massive yard! Sprawling kitchen! But everything you want in a home may be different from everything you need. You might not need floor-to-ceiling windows, but if you have a large family you may need more than three bedrooms.
Unless you’re working with an unlimited budget, you’ll have to determine which are your must-have features in a new home and which features you would potentially be willing to give up. If you’re unwilling to compromise on any features and are having a hard time discerning wants and needs, you may have a difficult time finding that “perfect” fit.
– Eric Wilkinson
Needs and wants are two different lists. Your needs are the things that are non-negotiable, under no circumstances are you buying a house without parking, as an example. Whereas your wants are things you’re willing to live without for the right house. It’s impossible to find a house that checks all your boxes, even if you build it yourself. I’ll always tell clients to clearly define your needs and wants and to keep in mind if you get 9/10 things then that’s as close to a perfect house as we’ll get.
– Daniel Engel
Needs and wants in a home could be very subjective, so I don’t try to set a boundary on what your needs and wants are. Instead, I suggest making a combined list of your needs and wants and number them in the order of importance. Find a number on that list you could start to give up if necessary.
– Joe Bae
Misconception No. 6: Never accept the first offer
Offers are not like pancakes—the first one isn’t always a write-off. It’s a misconception that you have to say no to the first offer on your home when selling. Instead, you should be looking at what the potential buyer is actually offering and seeing if it meets your desires.
Oftentimes, the first offer is the best offer. The longer your listing stays on the market, the more a buyer may try to negotiate on the price. It’s encouraged sellers do their best to work with the first offer in trying to come to an agreement that works for everyone.
– Eric Wilkinson
Sometimes your first offer is your best offer. Different people have different negotiating styles and some people genuinely come with their best offer first. Look at the content of the offer and judge the agreement on its merits. Does this work for me and my goals? Is this what we want? Don’t just reject an offer because it’s the first one—you may never see that offer again.
– Daniel Engel
Misconception No. 7: Selling a home without a REALTOR® saves you money
Selling your home without a REALTOR® could not only cost you actual dollars, the stress and uncertainty of the process can add unnecessary strife to your already hectic life.
REALTORS® are professional marketers and negotiators. You may save yourself the cost of commission by not hiring a REALTOR®, but you very well may have left more money on the table by not having an agent represent you through the negotiation or by not reaching the correct buyer through marketing efforts. Speak to an agent, ask them for their sales statistics, ask the important questions, and make an informed decision.
– Daniel Engel
There are many ways to sell a home just like there are many ways to file your own taxes. Professionals exist for a reason and the majority of homeowners choose to hire a REALTOR® because they see it as the best fit. I’d never recommend selling your home on your own for the same reason I trust professionals to file my taxes, do my dental work, and prescribe medicine to my kids. A good REALTOR® knows the ins and outs of keeping your largest investment safe. They have a rolodex of professionals that will help you from start to finish and have the experience to stickhandle the negotiation process.
– Casey Archibald
This is by no means a comprehensive list of real estate misconceptions, but it goes to show why working with a REALTOR® is so important. You always want to make sure you’re getting accurate, up-to-date information so buying or selling your home can be as stress-free as possible!
