Regardless of whether you are a first-time buyer or an experienced seller, there is no shortage of real estate misinformation circulating, which leaves people feeling confused.
Arnold Maritz, co-principal at Lew Geffen Sotheby International Realty Cape Town Southern Suburbs said: “Many aspects of real estate are still shrouded in myths and misconceptions that can mislead both buyers and sellers, sometimes even resulting in costly mistakes.”
According to Maritz, navigating the property market with accurate information is essential so that people can make informed decisions and avoid any pitfalls along the way.
Here are common real estate myths that need to be debunked:
Myth one: Spring/summer is the only time to buy or sell
Fact: While summer or spring are traditionally seen as prime times for real estate transactions, it is not the only window for a successful sale or purchase, according to Maritz.
Maritz says that each season has its advantages.
In winter, there may be fewer listings, which means less competition so sellers can stage their property to look cosier, warmer and more inviting.
“Buyers who purchase in the off-season might also find better deals and more motivated sellers,” Maritz said.
Myth two: Renovations always increase home value
Fact: Not all renovations on your property guarantee a return on investment.
Improvements such as kitchen remodels or bathroom upgrades can often yield higher returns but others renovations like luxury upgrades or personalised modifications, may not add significant value and may deter potential buyers.
Maritz says it is essential to research which renovations are likely to pay off in your market and that you should avoid improving beyond the neighbourhood standard. By over-capitalising, you are unlikely to recoup the spend and gain the potential returns.
Myth three: You need a 20% deposit to buy a home
Fact: The 20% down payment is the common standard, but it is not always a strict requirement.
Maritz says that depending on a person’s credit history and other considerations, lenders or financial institutions may accept lower deposits and sometimes even grant 100% bond for qualified buyers.
“While a larger deposit can reduce monthly mortgage payments and ease your long-term financial burden, buyers should explore all financing options and choose the one that best fits their financial situation,” Maritz said.
Myth four: Selling your home on your own saves money
Fact: For Sale By Owner (FSBO) can seem like a cost-saving option because it allows you to cut out agent commissions
However, statistics show that FSBO homes often sell for less than agent-assisted homes.
Without professional marketing, negotiation skills, and market knowledge from an experienced agent, sellers might miss out on potential buyers and fail to price their homes correctly.
Myth five: Overpricing your home leaves room for negotiation
Fact: Overpricing a home can and often does backfire, according to Maritz.
Overpriced properties can deter serious buyers, which will prolong the time your home stays on the market. This can lead to reductions in the price that can make buyers wary and wonder if there are issues with your property.
“Pricing your home competitively from the start generates more interest, attracts serious offers, and can even lead to bidding wars,” Maritz said.
“An experienced real estate agent can help you determine the optimal price based on market conditions and comparable sales.”
Myth six: You must make major upgrades before selling
Fact: Small improvements can sometimes have a significant impact rather than costly upgrades.
Simple actions like decluttering, a fresh coat of paint on the walls and improving kerb appeal can greatly improve the attractiveness of your property to potential buyers.
Myth seven: All real estate markets are the same
Fact: Real estate markets may differ by location and are influenced various factors like local economic conditions, housing inventory, and buyer demand.
According to Maritz, national trends can offer a broad overview, but may not provide a true reflection of a specific area.
“Local market knowledge is crucial for understanding pricing, competition, and the best strategies for buying or selling,” Maritz said.
Myth eight: Always buy the biggest home you can afford
Fact: Just because you qualify for a huge mortgage does not mean they should max out those limits, according to Maritz.
The ‘bigger is always better’ myth often leaves some buyers feeling house poor and struggling to maintain or pay bills.
“It’s advisable to set a purchase budget based not just on approval amounts but long-term affordability, including anticipated maintenance costs, tax increases and other expenses. Buy for the lifestyle you want, not just the payment you can technically afford,” Maritz said.
Myth nine: You should always buy instead of rent
Buying property is a sound investment and has many advantages, however, automatically assuming buying property is a smarter long-term investment than renting is flawed thinking, according to Maritz.
This is because it depends on your current financial situation, future plans, among others.
Maritz says that if you are thinking of travelling extensively for the next few years, renting is probably a better option as it provides flexibility.
“There’s no one-size-fits-all answer, it depends on your specific life and financial circumstances. Don’t succumb to the pressure that you absolutely must buy,” Maritz said.
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