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Home Buyer Myths

Real Estate Agent with Coldwell Banker

I recently read an article regarding five common myths held to be true by home buyers.  Let me preface this with two bits of information, (1) the survey was conducted by Zillow and (2) the sample size was 1,000 home buyers.  The five areas used for the basis of the survey were appreciation, mortgage insurance, appraisals, homeowners insurance and ownership.

Regarding appreciation, I was shocked by the number of individuals who honestly thought that their homes were going to appreciate by 7% a year, especially given the current state of the market.  I suppose that is fuedled by the notion that, for years, we were always told that real estate would always appreciate.

I was not as surprised by the number of people who thought that mortgage insurance was a necessity in all instances.  Not everyone knows that you can avoid PMI with 20% or more down.  Although, everyone in Florida seemed to know it five and ten years ago (lol).  Ah yes, the 80/20 loans that sunk the state like a sink hole.

A lot of the surveyed buyers thought that the appraisal detailed the condition of the home, not the actual value.  I guess I can kind of understand this one as well.  people who don't operate in our industry can easily confuse appraisals and inspections or simply think that the appraisal somehow encompasses the inspection.

The fact that so many people thought that homeonwers insurance was optional was a bit surprising.  Then again, so many people don't purchase renters insurance or have to think about insurance (those who live at home), so maybe this one's not a big surprise, just alittle one.

As for home ownership, I was stunned by the number of peoplewho thought that ownership was conveyed via a fully executed contract.  Maybe that's where more Realtors need to explain the process up front and educate the buyer before they even look at a house.

The link to the article is http://realtormag.realtor.org/daily-news/2011/10/28/survey-reveals-5-home-buying-myths.