5 Myths About Home Buying

With over 10 years experience in Real Estate, Ben Arce looks to provide you with expert tips and opinions that cover just about every aspect of real estate.  Whether you’re thinking of buying or looking to expand your real estate portfolio, Ben has you covered.  A Millersville University grad, Ben has went on to assist scores of buyers and sellers in and around the Philadelphia Market.  Now he is looking to lend his expert advise to you!

The housing market has changed dramatically over the past decade — and so have many of the rules of home buying. Here are five once commonly believed myths that no longer apply in today’s market. Here are the 5 Myths About Home Buying.

Myth #1: Buying a home is a great investment

If the housing bust taught us anything, it’s that the housing market can be just as risky as the stock market — if not, worse. Homes lost a third of their value nationwide and some markets took an even bigger hit.  Also, there are of course, other factors that can eat even further into those returns, such as maintenance.  Have to repair the leaky roof? That will be $1000. Need a new water heater? That’s another grand.

Myth #2: Buying is always better than renting

Now that the housing recovery has taken hold, some neighborhoods have become way too expensive for home buyers. One quick way to figure out whether to buy or not: If the home costs more than 15 times the annual cost of renting a similar home, you’re better off renting. Some other factors to consider: What would that 20% down payment have fetched if it was invested in stocks or bonds and beyond maintenance and repairs, what will the extra costs of owning the home include? For most people, the decision comes down to the number of the years they plan to stay in the home. If you think you can stay put for five years or more then it might be worth taking the plunge.

Myth #3: The three most important factors are location, location, location.

Finding the perfect home used to mean that it had to be in a well-established community with low crime, good schools and far from annoyances like airports or heavily used roads. But these days some of the best deals are found in neighborhoods that have yet to reach their peak. It’s better to keep an eye on a location’s potential for growth — and value. Look how much the neighborhoods have changed throughout Philly in the past decade.

Myth #4: Buy the worst home in the best neighborhood.

The advice seems sound: You can fix up a bad home but you can’t clean up a whole neighborhood. Those bad homes, though, can come with some pretty huge flaws. Many people have the skills to do the work themselves — or the money to hire someone to do it for them. In the end, you may end up paying more on that fixer-upper than if you had bought a home in better condition in a up and coming neighborhood.

Myth #5: All real estate is local.

It wasn’t too long ago that the way to make profits in real estate was to study the local market inside and out. Local conditions, such as wages, unemployment and population growth, would dictate the direction of local home prices. Not anymore. Real estate is much more of a global phenomenon today. The Internet and social media age has drastically altered the business.