Have you thought about buying a house and never moved on it, or have you never thought about buying because you thought you could not afford it? Well, there are five lies and five myths that buyers believe and that stop them from buying their dream home. Buying a home is an American dream. So these five lies or five beliefs that you may believe in or have heard of that may have stopped you are in no particular order.

The first one I want to talk about is that you need a perfect score to buy a house. You may have the down payment, you may be well qualified, and you may want to be ready to buy. But you may have a bad credit score due to bankruptcy, a medical emergency, or whatever reason student loans, or you may have cars that you co-sign for a brother or somebody else. So your credit score is not that great, and probably you never thought about looking for a home. But that’s a big lie or a big misbelief. You don’t have to have a perfect score or a great score of 800, 780, or 750 to buy a house. Yes, it helps you if you have a great score; you get better rates and possibly better terms and conditions. But I just talked to a lender, a friend of mine, yesterday to make sure that I’m giving you the right information, and he said that even if you have a low score of 625 or 600, you can still get a loan. In fact, he also mentioned that you can get a loan as low as 580 based on your FICO score or credit score. Of course, if it’s that low, it’s a special loan program that you may have to get into. They may charge you a higher interest rate; they may charge you more points and fees; et cetera. But if you really want to buy a house, even with lower credit scores, your dream is reachable. So don’t let the low credit scores stop you from looking for a house.

One of the things that you could do if your score is low, for whatever reason, is that there are companies out there called credit repair companies that help you improve your score. Maybe you will need two months, three months, or six months—maybe a year—to improve your low score to a higher score. So use these credit card companies or credit repair companies to adjust your payments and improve your score before you buy that home. Patience is a virtue. So rather than not buying, give yourself some time, improve your credit score, and then buy. I talk to buyers and sellers on a daily basis, and one of the biggest things I hear, especially from buyers and especially first-time home buyers, is that they need 20% down to buy a house. So in this case, let’s say the median home price today in the USA is about $430,000. One immediately thinks, Oh my gosh, I need about $80,000, which is 20% down, to buy a house. There is no way I can buy a house. But that is the biggest lie. That is a myth, and that’s not true at all.

First-time homebuyers pay an average of 6% when they buy a house. If we look at all the homebuyers, that means the homebuyers that sold their home and bought another one, or bought the second or third home, the average down payment is 14%. So the myth or common misconception that you need 20% down is not true at all. I also wanted to mention to you that with an FHA loan, it’s a government loan, so it’s easier for you to qualify than with a conventional loan. So that’s another advantage of an FHA loan. Of course, if you put 20% down, the advantage, and a lot of people, especially a lot of my buyers, put 20% down, is that you have no PMI, which is private mortgage insurance. So if you put 20% down, there is no PMI. But if you put less than 20% down on an FHA loan or a conventional loan, you will pay the private mortgage insurance, which could be anywhere from $100 a month to $300 a month, depending on your loan amount.

The other myth or lie is that buying is better than renting. Well, you know what? That is true if you look at the fact that homeowners have 40 times more net worth than renters. But sometimes renting is better than buying. You may not be ready to buy right now, so maybe you want to wait and rent for another two or three years. Maybe you just graduated, you just got a job, and you’re not sure where you want to settle. You want to settle in San Francisco, Los Angeles, New York, Miami, or Montana, wherever. So you want to start a job right now, get your foot on the ground, get a great job, and maybe transfer later on, or you are waiting to get married and your fiance has a job, or she’s trying to finish her college, and as soon as she finishes, you’re going to move to another state, Texas, Montana, or wherever. So there are situations where it’s better to rent than to buy. It’s not always true that buying is better than renting. Sometimes renting is better than buying.

I have a friend of mine who works for a company and travels a lot. The company sends him out for six to seven months at a time to different states. So he’s not buying because he figures, why should I buy? Because he goes out every year to different states, six or seven months at a time, and comes back. So he has a small, cozy bedroom and one bath. He’s a single guy, and he just enjoys his life. He makes a lot of money, but he does not want to buy. Right now, after I talked to him, he is thinking about buying a property as a rental. So he’s not losing money, just renting. So he’s looking at rentals while he’s traveling around. And eventually, in two or three years, he wants to switch jobs and settle down now that he has a girlfriend. And at that time, he’s going to buy. More than eight in ten Americans say buying a home is a priority. But you could be in the 20% where renting is better. So do what you have to do—what’s best for you in the situation or at the time of your life. Don’t feel bad about buying a house if you don’t need to buy one.

The next point I want to talk about is what buyers believe, or what buyers believe, and that’s a lie. What may be stopping them from buying a house is that they feel like when they see a house or they like a neighborhood, they see the listing price, and they feel that the listing price is not negotiable. You may be just thinking around and driving around and seeing a house for $400,000, and you feel, well, that house should be worth $350,000 or $375,000, and you’re not going to get it. So home prices are negotiable. Everything is negotiable. Your interest rates are negotiable, your terms and conditions are negotiable, and your home price based on the listing price is negotiable. So let’s talk about that. So if you’re in the process of buying, I’m sure you have already talked to a lender and a realtor. If not, direct message me. I will refer you to a great agent in your area. But when you’re looking for homes and if you have a great agent working with you and on your side, they will tell you that a certain house is not listed right and it’s negotiable.

The biggest mistake sellers make is overpricing their homes. I’ve been doing real estate for 25 to 30 years, and I see that every year, anywhere from 20% to 40% In our multiple listing service, which is the CRMLS, which I belong to and am a member of, 20% to 40% of the homes don’t sell. Even in a hot market, the last three, four, or five years have been very hot. Multiple offers are overbidding, yet 20%, 30%, and 40% of the homes don’t sell. That’s because the number one reason there are a lot of reasons why homes don’t sell is because they are overpriced. So if you’re a buyer, don’t get scared of the listing price. If you feel that it’s high with your agent, if you know the neighborhood, if you know the area, and you and your agent determine that this house is overpriced, make them a lower offer. Not a low-ball offer, but make them an offer. If they’re asking for $400,000, and if you feel the comps or the comparatives are showing the house should be 350 or 375, make an offer and let them know that this is the price. You’d be surprised how many times the sellers come down from the listing price. Just like buyers want a great deal and don’t want to pay the full price, that’s just psychological. Sellers want the highest price, so they’re going to ask for the highest price and see what they can get. So home prices are negotiable. Don’t let that stop you from buying your dream home. Work with your realtor. You’ll be glad you did.

The other myth, the other lie, or the other belief is that homebuyers believe that it goes to the down payment or is very close to the down payment. The other belief or lie that homebuyers believe, just like that, you need a big down payment is that the mortgage cost is the only cost. When they go to buy, they find out that, wait a minute, there’s a mortgage cost, there’s lending fees, and there are appraisal fees, but then you also find out, and a lot of the buyers are not aware of it, that there are other costs. So let’s talk about the two or three other costs other than getting your loan, which is very obvious when you get a loan. Of course, you have the principal and interest payments. On a $400,000 home, you might have a $3,000 monthly payment, depending on how much down payment you make and what your interest rates are. But in addition to that, there is what we call the PITI. So you have the principal and interest, and then you have your property taxes. So on a $400,000 house in Orange County, California, where I’m from in Anaheim Hills, our tax rate is 1.1% of the purchase price, which usually goes up by a small percentage every year. So on top of that, you’re looking at another almost $400 monthly payment on property taxes. So now you have principal and interest, and then you have taxes, your property taxes. And then you have home insurance.

You have to buy home insurance. A lot of lenders require you to get insurance. So now you have PITI. So you have principal and interest, you have your taxes, and then you have insurance. But wait, it doesn’t stop there. The other expense is that when you move into a house, you have utilities. If you have a newer home, you have association fees, and you have TVs. 99.9% of the homes have TVs. And now there’s streaming charges, Hulu charges, cable charges, et cetera. So you have those additional $100 on average. In the USA, an average homeowner pays up to $200 in cable and streaming services. So that’s an additional charge; you have maintenance charges. I bought this home, and the first year I moved in, I had to spend $7,000 putting up a new roof. So that was an additional cost. So there are additional costs from your mortgage fees. And if you don’t factor that in when you go to buy a house, it will affect the purchasing power of your home. So if you know the purchasing price, maybe you want to lower your purchase price so that you can put in the other $500,000 to $600,000 a month in non-mortgage fees and then buy a home.

According to that, lower your prices, et cetera, so you can afford to pay the utility bills, cable fees, maintenance fees, insurance, et cetera. As I mentioned earlier, if you’re thinking about buying a house, congratulations.