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Real Estate 101: Real Estate Myths

One of the most important roles real estate professionals can play right now is the dispeller of myths for their clients! And the myths are abundant, especially in a changing market. It is a myth that the market has “crashed,” it is a myth that buying a foreclosure is the absolute best bargain and investment out there right now, and it is a myth that avoiding using a Realtor will get you a better deal.

At any given moment, you can Google real estate, turn on the TV or listen to the guy behind you at the checkout line going on and on about the desperation and utter downfall of the housing market. Yes, it’s slower than the boom years. Yes, in certain markets there is depreciation. Yes, it may take a little longer to sell your home. And, finally, yes, this is the best time possible to buy a home.

Despite scary gloom and doom market reports, record-setting gas prices and escalated food prices, real estate is still a smart and protected investment. Educated consumerism and fiscal lending practices could have headed off the sub prime fall-out. Sure, it’s a shame and it has changed the face of the economic system that has so thrived in the United States for decades, but this is where we find ourselves, and we still need a place to live.

Foreclosures are a great source for discounted housing investments. However, the average consumer does not realize that the majority of foreclosures on the market with a Realtor are priced according to their condition and market value, not a discounted rate just to pay off the mortgage. Those houses have been appraised within a certain percentage of the list price in most cases. Most are sold as-is and require some handyman work by the buyer.

Many existing and new construction homes are competitively priced and in much better shape. So the home should be the deciding factor in making a purchase, not just the situation of the homes being considered. Certain Web sites that cater to the foreclosure market fail to verify the actual amount the house is worth. They sometimes only show one lien holder’s mortgage interest, leading people to believe that they can bid on the house at a ridiculously low amount, which is deceptive on many levels. Foreclosures can be a great investment, but so can many other homes currently on the market for other reasons.

Money is still available, homes are abundant, and interest rates are at historic lows. This is the absolute perfect time to purchase a home in the Murfreesboro area, and choosing the right Realtor is key in making a sound investment in which your interests are served. When a sellers put their house on the market, they sign a listing agreement saying that they will pay their listing Realtor’s brokerage, as well as allowing the listing brokerage to share it with the cooperating brokerage for their services. This compensation amount is a percentage of the sale’s price, which each brokerage sets. Generally speaking, as with my brokerage, it is 5 percent for new construction and 6 percent for existing homes. It gets split in half between the brokerages. However, if a buyer goes unrepresented, the commission is still the same. The seller is not saving money. The reason buyers don’t pay their Realtors for their service is that the seller is paying the grand total of the real estate fees. It seems silly now to buy a house without a professional serving your interests, huh?

Jackie Hogencamp is a local Realtor and can be reached at jhogencamp@realtracs.com or (615) 895-4040.

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