Six Home Buying Myths BUSTED | Ep. 14
Introduction
Hi, I'm Nick, host of the DIY Homebuyer Podcast. Our mission is to empower homebuyers to successfully navigate the home buying process without hiring a costly buyer's agent. I'm passionate about helping people take control of their lives and finances, which is why I focus on personal agency rather than traditional agent relationships.
In this article, I'll bust six common myths about home buying that I've encountered while helping hundreds of people through the process. These misconceptions can either hold buyers back or cost them thousands of dollars.
Myth #1: You Need a 20% Down Payment
While having a 20% down payment is often recommended by financial advisors like Dave Ramsey, it's not actually required. Here's the reality:
Conventional loans allow down payments as low as 3%
FHA loans accept down payments as low as 3.5%
VA loans and some first-time homebuyer grants may offer 0% down options
Yes, putting less than 20% down means paying Private Mortgage Insurance (PMI). However, waiting to save 20% while home prices appreciate could cost you more in the long run. Once you build 20% equity, you can often:
Have PMI removed on conventional loans after reappraisal
Refinance an FHA loan to a conventional loan to eliminate PMI
Myth #2: You Need Perfect Credit
While better credit scores do secure better interest rates, you don't need perfect credit to buy a home. Many FHA and conventional loans accept credit scores in the high 500s to low 600s.
Important considerations:
Lower credit scores mean higher interest rates (often about 1% higher)
This difference can cost tens or hundreds of thousands over the loan's life
You can refinance later when your credit improves
Consider the total cost vs. the opportunity of buying now
Myth #3: Spring/Summer is the Best Time to Buy
While spring and summer see the most listings, each season has its advantages:
Spring/Summer:
Most inventory available
Most competition from other buyers
Higher likelihood of bidding wars
Fall:
Properties that didn't sell in summer may have motivated sellers
Less competition
Better negotiating opportunities
Winter:
Most motivated sellers
Least competition
Year-end urgency
The best time to buy is when you're ready and find the right house, regardless of season.
Myth #4: New Construction is Worry-Free
After years in new construction, I can tell you: no home is perfect. Important considerations:
Always get thorough inspections
Understand what "builder grade" materials mean
Research warranty coverage details
Know the warranty claim process
Verify the builder's reputation for honoring warranties
Myth #5: Always Offer Below Asking Price
The right offer depends on multiple factors:
Recent comparable sales
Current market conditions
Property condition
Your personal valuation
Seller motivation
Market strategy (some properties are intentionally listed low)
Focus on value, not price. Research comparable properties and consider the home's worth to your specific situation.
Myth #6: You Need a Buyer's Agent
In today's digital age, buyer's agents are a luxury, not a necessity. Modern homebuyers have access to:
Property listings
Market data
County records
Neighborhood information
Direct contact with listing agents
While agents can make the process more convenient, their 3% commission (often $21,000+ on a $700,000 home) is a significant cost that ultimately affects the transaction's bottom line.
Want to learn more about buying a home without an agent? Check out our free DIY Home Buyer Academy and Community for additional resources and support.
For more detailed information and resources, join our free school community at skool.com/diyhomebuyer
