Lies And A Truth About Real Estate

Truth about Real Estate

When buying your first home, don’t forget that it is actually an investment and you will eventually need to get more out of it than you put in.

Be careful not to make updates to your home that will be too costly or unnecessary.

Probably one of the smartest financial decisions that you will ever make is buying a home.

Most of the time, you really don’t want to hear all the real estate myths when you are getting your home ready to sell. In particular, there are two myths which come right to mind and they are both lies. People actually believe these lies are the truth because they have circulated for so long among home buyers and sellers. I will show you that there is really only one truth about selling and buying a home that will explain why buying a home is such a sound financial decision.

Truth about Real Estate

Lie 1: Buying a home is a debt burden and it is a waste of money.Buying a home is a debt burden and it is a waste of money

People were buying houses they couldn’t afford with bank money they could never hope to pay back in the mid-2000s. For this reason, many families bought homes that were above their price range. As a result, the housing market crash was far worse than it might have been. People were scared and hopelessly in debt and had lost the entire value of their homes. This fear has led to the widespread opinion that it is problematic to buy a house and it will always lead to crushing debt.

Truth about Real Estate

How to Avoid – In the years since the housing crash, the banks have strengthened their rules on who can get a mortgage and how much they will be allowed to borrow to buy that home. Of course, this is a good development because it strengthens the economy. People are only being allowed to buy houses for which they already have the down payment and where they can make the monthly mortgage on time. It is never a good idea to buy a $500,000 house when your salary is only high enough to buy one at $300,000.

Lie 2: Resale Value is Higher if You Spend Thousands of Dollars on Home UpdatesValue is Higher if You Spend Thousands of Dollars on Home Updates

This is incredibly untrue! People who are spending tens of thousands of dollars to get updates like outdoor kitchens, new plumbing or exotic pools just to sell the house are fooling themselves. It is usually a monumental waste of money or it might only add a little incremental value to the home rather than the “major benefit” for home resale value that they were sold on by contractors.

Truth about Real Estate

How to Avoid – Just don’t make over-the-top updates to your home and only adjust or fix things that will truly add to the resale value of the home. For example, a good investment is new carpet, bathroom updates, front yard maintenance and a lovely paint job. Don’t make home improvements that won’t pay off at resale. They will just waste your money and time.

Truth: Buying a Home is the Best Possible Investment You Can Make

If you are having trouble saving twenty to forty thousand dollars for a 20% down payment on a new home, there are plenty of other people just like you. It is hard to force yourself to save at the rate of just a few hundred dollars a month for something that feels so out of reach. But by cutting expenses that are unnecessary you can soon have thousands of dollars saved in a few years. And when you have that 20% down payment, you will be able to buy that home and take out a mortgage because of your good credit history.

The best part of all is that you will be able to sell that house once you’ve lived in it for some time. You will be able to use the appreciation to take your family to a better and bigger home.

You will be able to get the highest possible price for your home if you sell it at during the best sellers’ market. For this reason, buying a home is the best investment you can make. When you sell it you will be able to buy an even bigger and better home than you ever imagined using the money from the sale of your first home.

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