By Summit Group Real Estate Professionals
Most of what buyers believe about the home buying process turns out to be outdated, incomplete, or absolutely wrong. These myths shape decisions long before a buyer ever contacts an agent, sometimes keeping people out of the market longer than necessary. Here in Santa Fe, we hear the same handful of myths from nearly every new buyer we work with. Clearing them up early makes the entire process feel more approachable.
Key Takeaways
- Learn why a large down payment isn't always required to buy a home.
- Discover how renting and buying costs compare over time.
- Find out why pre-approval matters before you start touring homes.
- Understand how listing prices work and where there's room to negotiate.
Myth: You Need 20 Percent Down To Buy A Home
Many buyers assume a 20 percent down payment is required to purchase a home. In reality, several loan programs allow for a much smaller down payment.
What's True About Down Payments
- Conventional loans that allow down payments well below 20 percent
- FHA loans designed specifically for lower down payment amounts
- VA loans available to eligible buyers with no down payment required
- Down payment assistance programs offered in many states and cities
- Private mortgage insurance as a tradeoff for a smaller down payment, not a dealbreaker
Waiting to save a full 20 percent often costs buyers more time than it saves them in fees.
Myth: Renting Is Always Cheaper Than Buying
Rent payments can look cheaper on paper, but the full comparison involves more than a monthly number. Building equity changes the math over time.
What The Full Comparison Includes
- Principal and interest payments compared to monthly rent
- Equity built with every mortgage payment versus none with rent
- Potential tax benefits tied to homeownership
- Rent increases over time versus a fixed-rate mortgage payment
- Long-term appreciation potential that a rental payment never provides
The right comparison depends on how long someone plans to stay, not just the monthly payment.
Myth: You Don't Need Pre-Approval Before You Start Looking
Touring homes without a pre-approval letter can feel harmless, but it often slows down the process later. Sellers and agents take pre-approved buyers more seriously from the start.
What Pre-Approval Does For A Buyer
- Confirms a realistic price range before touring homes
- Strengthens an offer when competing with other buyers
- Speeds up the timeline once an offer gets accepted
- Reveals any credit or financial issues early, while there's time to fix them
- Gives buyers confidence about what they can comfortably afford
A pre-approval letter turns house hunting from guesswork into a focused search.
Myth: The Listing Price Is The Final Price
A listing price is a starting point set by the seller, not a fixed number. Plenty of factors can move the final sale price in either direction.
What Influences The Final Sale Price
- How long the home has been on the market
- The number of competing offers at the time
- Repairs or updates the home may need
- Local market conditions at the time of sale
- How motivated the seller is to close quickly
Buyers who understand this have more room to negotiate than they might expect.
Frequently Asked Questions
Do I need perfect credit to qualify for a mortgage?
No, most loan programs accept credit scores well below what people assume is required. We help buyers understand their options based on their actual credit profile rather than a number they read online.
Are closing costs included in the price I see advertised for a home?
No, closing costs are separate from the purchase price and typically range based on loan type, location, and negotiated terms. We walk every buyer through an estimate of these costs early in the process.
Do buyers have to pay their agent's commission out of pocket?
In most transactions, the seller covers the buyer's agent commission as part of the sale. We explain exactly how compensation works before a buyer signs anything, so there are no surprises.
Reach Out to Summit Group Real Estate Professionals
Believing a myth at the wrong time can cost buyers real money or the home they wanted. Before you begin your home search, we’ll talk you through the common housing misconceptions, so that when you’re ready to find your dream property, you’ll do so with confidence.
