10 Real Estate Myths Chip Gaines Totally Debunks

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Real estate is a landmine of rules, rumors and supposed ‘facts’ when it comes to buying or selling a home, and it’s enough to make even the most even tempered head scratch. With market trends, interest rates and housing bubbles always being talked about, it is no wonder so many people feel overwhelmed and uncertain. Real estate expert and star of “Fixer Upper”, Chip Gaines, however, isn’t afraid to set the record straight. He’s debunked a long list of myths that have fooled buyers, sellers and real estate fans over the years.

Chip has peeled back the layers on many misconceptions that people have about the real estate market in his trademark down to earth style. Let’s dive into some of the biggest myths Chip Gaines has busted wide open.

It’s either a Market That’s Booming or Busting

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Lots of folks believe that the housing market is one big roller coaster you never see coming. Chip insists, however, that it’s seldom that extreme. There are fluctuations, but they’re not nearly as dramatic as people make them out to be. In truth, housing prices have largely moved up over the past two decades, with only brief falls. Chip stresses that buying a home is not about timing a market ‘boom’ or avoiding a ‘bust’ but it’s about what is best for you.

Buying Is Always Better Than Renting

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Chip says, the old adage that buying is always the better financial decision doesn’t apply in every case. Some people choose to rent because it is flexible. In fact, it’s actually better for those who move a lot or have jobs that require a lot of travel. Chip’s take? Know your own lifestyle and don’t be pressured to buy if it doesn’t fit your current situation.

Older Homes Are Money Pits

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Older homes are always a problem with endless repairs? Not necessarily, says Chip. Newer homes just don’t have that same character that you can get with older homes. Not all older homes need to be updated, and they’re not automatically a financial sinkhole. Chip says it’s worth taking a closer look before leaping to conclusions. A lot of the older homes were built with craftsmanship and materials that stand the test of time—so don’t automatically write them off.

You Need a 20% Down Payment

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For years, a hefty down payment has been a must have, making homeownership seem out of reach. According to Chip, there are a number of ways to buy a home without that 20% down payment. As for how much money you need to make a down payment, a report from the Investopedia finds that, on average, buyers making a first purchase put down around 6 to 7 percent. With FHA loans and other assistance programs, getting your foot in the door is easier than most people realize, Chip notes.

Real Estate Agents Are Needless

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Many think that with all the internet has to offer, they can cut out the agent altogether. Of course, research is great, but Chip points out that a good real estate agent can be priceless. They give insight into neighborhood trends, negotiate contracts and help you with paperwork. The National Association of Realtors says homes sold by agents tend to sell for more than those sold without an agent. If you’re new to real estate, having a professional on your side can make all the difference.

The Bigger Your House, the Better Your Investment

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Bigger homes equal bigger returns, but Chip calls this one a “Texas-sized myth.” Bigger isn’t always better. Chip says that if you think a large home is attractive, you should know that smaller homes tend to provide a higher return on investment due to being more affordable for a wider range of buyers. Before buyers automatically assume that square footage equates to profit, he advises, they must think about factors such as neighborhood demand, property taxes and utility costs.

Renovations Will Increase Your Home’s Value

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Want to add a luxury bathroom or high end kitchen to increase your home’s value? Not all renovations are going to give you the return on investment that you expect, Chip says. It’s nice to have fancy upgrades, but buyers aren’t always willing to pay extra for them. Chip recommends concentrating on practical improvements — say, roof repairs or energy efficient windows — that usually attract a broader audience and are generally cheaper.

Open Houses Are Essential

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You may have seen it in the movies: Eager buyers packed Sunday open houses, and snacks were laid out on the counter. Open houses don’t always close the deal, according to Chip. Today, more and more serious buyers like to have private showings or virtual tours that might be a more convenient, personal way to view the home. Although an open house can drum up interest, Chip says it’s not the end all be all to selling a property.

Location Is Everything

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It’s a common refrain: “Location, location, location!” According to Chip, however, location is important, but it’s not the only thing to think about. Just because it’s a dream neighborhood doesn’t mean it’s a dream home. As important as where the house is, the structure of the house, its future potential, and how it fits with you as a person are also important. A home can change, but the location can’t. Yes, location matters, but it shouldn’t override all else when deciding.

Real Estate Is Only for Rich People

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Most people think you need deep pockets to start investing in real estate. Chip laughs this off, and says he’s seen people who make modest incomes succeed in investing, if they’re smart and savvy about what they choose. Real estate investing isn’t just for the rich, it’s about research, networking and finding properties that work for your budget. With the right strategy, Chip highlights, anybody can break into real estate investing no matter how much money one makes.

Disclaimer: This list is solely the author’s opinion based on research and publicly available information.

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