Myths of Minnesota's Housing Market: Don't Be Fooled!

Make no mistake; Minnesota's housing market is complicated. Unfortunately, many home buyers and sellers do make the mistake of buying into commonly heard myths about the housing market. Placing too much stock in these myths can lead to disaster when you try to buy or sell a home. That's why the Chris Fritch Team is here to debunk them for you.

Read on to learn about some of the most common myths regarding Minnesota's housing market, why they're false and what the truth is.

Myth: You don't need a real estate agent's help to buy or sell a home in Minnesota.

With so many home realty websites and apps available to buyers and sellers, some people get suckered into thinking that they can handle the home buying or selling process on their own; no need to waste money on a realtor. Unfortunately, this is a dangerous mistake.

Real estate agents play a crucial role in buying and selling homes in Minnesota. For buyers, realtors can track down ideal houses within a certain area and price range. For sellers, realtors can create professional-grade listings to attract buyers to the front door. For both parties, realtors can handle negotiations and paperwork, along with putting home sellers and buyers in touch with important entities such as mortgage lenders, movers and home inspectors. Without a real estate agent, navigating the housing market is like trying to swim across Lake Superior alone. With a realtor, it's as easy as sitting on a boat that someone else is steering.

Myth: You can just start looking at houses right away.

Many home buyers in Minnesota think that once they decide to move to a certain area, all they have to do is start touring houses on the market. First-time buyers, in particular, often fall victim to this myth.

The reality is that going to look at houses isn't the first step; in fact, it's not even the second step. Buying a house is a huge commitment and one that requires several steps of careful planning. Before you even take a look at what's available, you need to plan out your budget and make sure you have enough capital on-hand to make a down payment. Next, you should apply for mortgage preapproval and hire a local real estate agent. Only then are you actually prepared to begin shopping for a new home in Minnesota.

Myth: You always need to prepare a 20% down payment.

It's true that the standard for most conventional mortgage loans is for the buyer to place a 20% down payment on a house, and the mortgage lender will cover the rest. But this isn't always the case, so don't panic if you can't afford 20% of a house you want to buy.

There are many types of mortgage loans which allow you to place a down payment far smaller than 20% of the house's price. A FHA loan only requires a 3.5% down payment, while USDA and VA loans don't require any down payment at all. Even if you don't qualify for one of these loans, most conventional loans don't require a down payment of 20%; you'll just have to pay private mortgage insurance (PMI) if you aren't able to put that much money down upfront.

Myth: You should always place an offer below the seller's asking price.

Given just how expensive buying a house in Minnesota can be, many buyers are eager to believe the myth that you should always low-ball when making an offer on a home. This is a mistake that can ruin your chance of purchasing your dream home.

In reality, the Twin Cities area is presently a strong seller's market where buyers who make low offers are likely to be ignored. Offering the amount a seller is asking for, or even a few thousand more, is a great way to win the seller's favor and close on a house that you really like. If you're in no rush to move, it's okay to try making some low offers and hoping to get lucky; just don't try your luck if there's a house you've fallen in love with, or you'll be in for heartbreak.

The #1 Real Estate Team in Minnesota

Don't believe these housing market myths! Working with a team of trusted local realtors can make it a breeze to buy or sell a home. Give Chris Fritch Team at eXp Realty a call today for the best help with selling or buying a home in the Twin Cities metro area!