Fact or Fiction? The Top 5 Real Estate Myths Unravelled

Posted On August 31, 2024

There are some big whoppers out there. But since we are talking about real estate myths, let us start with the biggest one of all.

“The Earth is flat.”

Despite the many proofs to the contrary and of course, the very real non-experience of not falling off the edge of the planet, there are still quite a few who believe this myth. Come on, there are only about a million images and scientific evidence that prove the Earth is a slightly squashed globe.

Oof! We are so glad that is off our chest!

What is a myth, though? And why do so many people persist in believing them?

A myth is an idea or belief that is widely held to be true, but it is not. It is a misconception, but since so many people say it, spread it and then more people say it again, it becomes almost a truth. Something along the lines of “Repeat a lie often enough and it can become the truth”.

You will come across many of these in your daily life.

Buying or selling a house is a big financial and emotional decision, and it can be hard to separate the chaff from the wheat. This article will try to address some of the myths in Canadian real estate. And going a step further, we shall also tell you why it is a myth and what the actual truth is.

Myth 1: Spring is the BEST Time to Sell a Home!

Spring is considered the best time for new beginnings, especially when Mother Nature is on a new cycle. And somehow, after a long winter, you just feel so much more ready to make a change.

It is a common belief that spring is the perfect time to sell a home in Canada. The idea is that buyers are more active and ready to make decisions. It is convenient for families to move in spring break, the weather is definitely nicer, and properties look better. And yes, the market is quite active in this season.

But is it always the best time to sell or buy a home? Nope, not really.

With more properties on the market, your house might take longer to sell or not fetch as high a price as you’d like because buyers have more options. If you are a first-time buyer, you may have more choices but there is also more competition, with the added stress of multiple offers and higher prices.

You also must consider the economy and inventory – in a seller’s market (when there are more buyers than homes), your house might sell quickly and at a good price. On the downside, in a buyer’s market (when there are more homes than buyers), it could take longer to sell, and you might have to lower your price.

Interest rates also matter – if mortgage rates are low, more buyers may be ready to invest.

Surprisingly, winter can be a great time to sell a home. With fewer listings on the market, there’s less competition, which can mean potentially higher offers. A motivated buyer or seller is more likely to make a deal faster.

If someone’s selling during a slow time, it’s usually because they need to—like when they’re shifting or maybe a financial crunch. The same goes for buyers; if someone’s moving in winter, they likely just accepted a job or need to get settled before a new school term.

So, while spring can be a good time to sell, you need to look at the bigger picture. Focusing only on the so-called “right season” might not give you the best results.

Myth 2: More Home Improvements Mean MORE Profits!

You have just sunk (literally) money into a new swimming pool in your backyard. And you know that when if you sell your home, this investment will pay off. Because who wouldn’t like their own backyard pool?

Well, we are sorry to burst the bubble, but this is not always true. Most homeowners do not want the hassle of pool maintenance, not to mention the upkeep cost.

Do not renovate your home thinking that it will automatically fetch a higher sale price.

Sensible updates—like modernizing your kitchen, adding extra storage or a fresh coat of paint—will make your home more appealing and potentially boost its value. However, there’s a fine line between smart upgrades that will pay off and unnecessary over-the-top spending.

Luxury finishes, custom-made fittings or extravagant landscaping may be more of a hassle than an advantage. If your property is in a mid-priced neighbourhood, buyers might not be able to stretch their budgets for a professional-grade kitchen or an elaborate backyard.

Does this mean you neglect basic repairs and regular maintenance?

Imagine a potential buyer walking into your home and seeing a leaky roof, cracked tiles, or outdated fixtures. Be assured, they are wondering what other issues are lurking beneath the surface. These red flags will lead to lower offers or even scare buyers away entirely.

Our advice? You must strike a balance.

Invest in necessary repairs and sensible upgrades that will boost your home’s appeal without breaking the bank. Focus on areas that most buyers value, like kitchens, bathrooms, and energy efficiency – but stick to a mid-sized budget. Do not sink money into highly personalized or ultra-luxurious renovations.

Ultimately, it’s about smart spending that makes your home market-ready, not just for the sake of it.

Myth 3: You Must ALWAYS List Your Home at a Higher Price!

This is a form of Seller FOMO – Listing your home at a higher price with the idea of leaving room for negotiations may seem like a slam-dunk strategy, but it often backfires.

Here’s the simple reason why: Like sellers, buyers are savvy too – they have access to tons of information about market prices and have usually done their research before starting their house hunting. When they see an overpriced property listing, they might not even bother to look at it, thinking it’s out of their budget.

So, let us say you list your Calgary home at $675,000, but buyers in your area are only searching up to $625,000. You are missing out on their potential offers. To add insult to injury, your home might end up being an artificial benchmark for buyers – they may end up thinking that the better-priced home down the street is a bargain.

Additionally, an inflated price can make your home sit on the market longer. There are solid chances that investors start to wonder if something’s wrong with it, giving them more power to negotiate a lower price.

Read our blog on how to price your home right.

The truth is that a competitive price will attract more serious buyers, lead to multiple offers, and ultimately help you get the best price for your home. So, skip the high price tag and focus on what will actually get your home sold.

Myth 4: The Internet Makes You as Good as an Expert!

It is the digital age, and you can get everything you need (and quite a few things you don’t need) on the big wide internet.

Does that make you an expert? Can you instantly download all the expertise and knowledge of a professional? You know the answer, don’t you?

Just for the sake of our discussion, you are excited to find a good deal on a Brampton home online. But here’s the thing—was it the best deal? Could you have gotten a better property in the same price range or even lower?

Or maybe you’re selling your home, and you get what you expected. But with a real estate agent, could you have gotten even more? We are sure that you wouldn’t mind paying his fees if you get a bigger payout than on your own.

Of course, if you are an experienced hand at this, do go ahead. Otherwise, it is good business sense to take advantage of experts.

Real estate professionals are more than just bodies at the table. They specialize in local market know-how, negotiation skills, and an instinct for spotting things a newbie may miss, like hidden fees or future neighbourhood developments. Plus, they’ve got access to other professionals in the field —mortgage brokers, inspectors, stagers —to ease the process.

Choose someone you trust, who gets you, and who’ll make sure you’re not just making a good decision, but the best one. So, before you click that “For Sale by Owner” button, think about consulting a Realtor. It might just save you money, time, and a whole lot of stress. Let the professionals do their job.

Remember that buying or selling a home is one of the biggest financial decisions you’ll ever make. Do you really want to do it by yourself?

Myth 5: You CAN NOT Buy a Home with a Bad Credit Score!

As myths go, this is not one of the worst. It is not 100% wrong, but neither is it an irrevocable fact.

Many people believe that buying a home is only possible if you have an excellent credit score and have the funds for a 20% down payment. They will make your home-buying journey easier, but they are far from being mandatory in real estate transactions.

It is true that a higher credit score can get you better mortgage rates. However, a lesser score doesn’t mean you give up your dreams of homeownership. Alternative lenders, government initiatives, and options like high-ratio mortgages can help. Depending on what you choose, you may pay higher interest rates or need to put down more money upfront, but there are still viable options for buying your home.

Speaking of down payments, the idea that you need a minimum 20% down payment to buy a home is outdated. The truth is that you can secure a mortgage with as little as 5% down for homes priced under $500,000. Mortgage default insurance, also known as Canada Mortgage and Housing Corporation (CMHC) Insurance, allows you to make a smaller down payment on your home. 

If your dream home costs more, you pay 5% on the first $500,000 and 10% on the portion up to $1 million. Talk to your mortgage broker for more information.

All Hail the Myth-Busters!

We could probably go on and on.

Take a deep breath and relax. We realize that it can be confusing to wade through the reams of information and half-truths that masquerade as facts. Your best bet is to always double-check what you hear.

Don’t let these myths hold you back from being an active part of the real estate market. With the right advice (contact us) and some rearranging, you can face these challenges and become a proud home owner.

Some More Questions Answered:

Is it always better to buy a home than to rent?

Not necessarily!

While buying a property can be a great investment, renting can be a better option depending on your lifestyle and finances. If you’re not ready for the responsibilities of homeownership, renting is a good idea, as it often requires less upfront cost and provides flexibility.

Is buying a new build always cheaper and easier to maintain?

Not always.

Though a new build, especially if you buy a pre-construction condo might seem cheaper upfront, take a closer look at additional costs like landscaping, driveways, and basement finishing.

Plus, the need for repairs depends on the quality of construction and the stage of occupancy. Be sure to select a trusted builder so you can rest assured.

Is real estate always a profitable investment?

In the long run, yes. Maybe not always in the short run.

Like every investment, real estate markets can be unpredictable, and property values can fluctuate due to economic conditions, interest rates, and local factors. Always research and thoroughly understand the risks before investing in real estate.

Are home inspections only necessary for older houses?

No, home inspections are important for all homes, regardless of age. Indeed, they are an absolute requirement when selling a property.

For older homes, they can uncover wear and tear, while for new constructions, they ensure everything meets safety and quality standards. It’s a vital step in the buying process to avoid unexpected issues later on.