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Millennials, take care: The 12 myths of first-time home buying

Ask the Expert Buying
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. —Lesley Becker/Globe staff; Adobe Stock

Here’s what Andrew Hall said about his experience buying his first home: “Annoying.’’

“There was a lot of hearsay’’ in the deal, Hall explained in an e-mail. “I kept wishing I could speak directly with the seller, but he was the fourth party that I was negotiating with: I was the first, my realtor was the second, his realtor was the third, and he was the fourth.’’

Boston-based Lindy Chapman, CEO of DOSS Social Agents and a relocation strategist who knew Hall from when both lived in Dallas, helped him find a new agent in Akron, Ohio, after he decided not to work with his first, whom he found on a listing aggregator website. She said the way today’s first-time buyers approach the process of buying a home is completely different from how the industry actually works.

“Today’s consumer is used to having Uber in their hand, calling for a ride whenever they want,’’ Chapman explained. Buyers “want that same facility with the real estate industry, so they call the number on the sign in the yard as they pass a house that looks interesting to them, rather than hiring their own agent, and calling that agent to represent them on every house in the area.’’

I’ve been covering the real estate industry for more than 25 years and have published several best-selling books for buyers and sellers, including “100 Questions Every First-Time Home Buyer Should Ask” (Penguin Random House, fourth edition). Chapman’s insights ring true: Today’s first-time buyers, who account for 35 percent of shoppers, according to the National Association of Realtors, are entirely different than those who bought their first homes a generation ago.

They’re older (the average age of a first-time buyer shifted from around 26 to nearly 33), more likely to have student loan debt, and are far more technologically savvy than most of the real estate agents they work with. Real estate technology innovation combined with the ubiquitous smartphone have both underscored and accelerated the changes.

Today, roughly 84 percent of all home buyers search for a home online, according to the 2020 National Association of Realtors Home Buyers and Sellers Generational Trends Report, with photos being the most important website feature. But you can see so much more online these days. Today’s top websites include video, 3-D floor plans, and data, taxes, school districts, and how many times the list price and ownership of the property has changed.

With all this data, it would seem that buyers would have a surfeit of facts at hand, making the decision to purchase or take a pass easier. You’d imagine that with so much information on their phones, first-time buyers could do away with agents altogether. In fact, that’s what the latest incarnation of the real estate industry, iBuyers, is counting on.

But in fact, many buyers, including first-timers, are confused by how the process really works, and the roles and responsibilities of those professionals taking part.

Here are 12 myths, misunderstandings, and half-truths that today’s first-time buyers often believe (and act on) that can cause issues for them. I’ve included information I hope will demystify the most expensive purchase you’re likely to make: your new home.

1. Buying online is the same as seeing the house in person.

Never. While you can use Google Street View, Zillow, your agent’s own website, and perhaps an individual property website to get information about the home, images, video, and 3-D graphics show you what the seller and agent want you to see, or what Google saw on the date it took the images from the closest public roadway. In the end, it’s a limited view. To protect yourself, you need to see the property in person if possible.

2. I don’t need an agent.

True. Legally you do not need to use an agent, but having a good one on your side is invaluable. The agent will be your eyes and ears on the ground, which is helpful in a hot market. If nothing else, an experienced agent who has represented buyers in your neighborhood of choice and at your price point will have seen the same properties go on and off the market many times in a career, providing useful intel on the housing stock.

3. The best agent for me is the one who listed the home (or who is listed next to the listing on Zillow, Trulia, or Realtor.com).

Well, maybe. Zillow, Trulia, and Realtor.com are comprehensive websites, but they’re not designed to match you to the best possible agent the way Match.com or other dating sites pair (hopefully) compatible couples. Agents pay for placement on those websites (as do the other companies that advertise their wares there), so you could click on a link for an agent who doesn’t know the housing stock and doesn’t typically work with buyers in your price range.

4. My broker can be trusted to put me first.

Again, maybe. Did you sign with an exclusive buyer agent? Then you can be sure the agent represents only you in the transaction. Other buyer agents also take listings and potentially could bring you to one of them, leading to dual representation — acting for you and the seller in the same transaction. If that happens, ask the agent to pick a side, and if the agent goes with the seller, ask the managing broker to assign you to someone else. Also, this is a good reason not to tell your agent all about your personal finances and what you’re actually willing to pay for a home until you make the offer.

5. I’ll get a better deal on my new home if I buy directly from the owner.

Rarely, if ever. If you’re buying by owner and the property is listed, the agent will get the full commission and you won’t have any representation. It’s unlikely you’ll negotiate the best deal because you’ve never done this yourself. Even if you study what homes in the area sold for, you probably won’t have seen the interior of all those homes in order to make a direct comparison of the property’s condition and amenities. And if the home isn’t listed, you’ll be negotiating directly with the seller, who may not be as reasonable as you are.

6. The lender will tell me how much I can spend.

True, to a point. Lenders will tell you how much they will lend you to buy the home, based on a complicated scoring system that includes a pull of your credit history and score; information about your income, assets, and debt; and an assumption of how much the home appraises for in value. They’ll tell you nothing about whether you should spend that money or whether spending that amount will leave you so cash poor that you can’t pay for repairs and maintenance.

7. I know exactly how much it will cost to live in my new home.

Doubtful. First-time buyers often underestimate the costs of repairs and maintenance, especially if they’re buying a single-family home. And then there’s all the fun stuff: carpet, paint, furnishings (and throw pillows, if you’re like my friend Sarah). According to the 2015 American Housing Survey and the National Association of Home Builders, during the first year after closing on a house, buyers of new homes spent an average of $10,601, while buyers of existing homes spent $8,233. On top of that, you can expect to spend a few thousand dollars on lawn and garden care, snow removal, blacktopping your driveway, replacing filters, and other routine household maintenance. As the years go on, you’ll need to replace appliances, mechanical systems, and perhaps patch the roof, and you’ll watch your property taxes and insurance premiums rise. All of those can, and will, add to your costs.

8. Top school districts are all the same.

Nope. While it’s good to live in the best school district you can afford, not every top school district will be the perfect fit for your child. Some top school districts go the extra mile to deal with children who have special needs, talents, or extreme allergies, are sports stars, or are living through particularly rough family situations. Spent time understanding what your children need from their schools, and then work to match those needs and talents with the right school for them.

9. My agent can handle the inspection on her/his own.

Definitely not. A professional home inspection is the perfect opportunity to learn everything you can about the mechanical systems, including their true age and estimated longevity. Take notes and photos, pay close attention, and insist on a written report. A corollary to this: You need a professional inspection for a new home as well. If you’re buying off the plans, consider incorporating several inspections as the home is getting built. And, yes, you need to go to all of them.

10. I don’t need to be there for the final walk-through.

False. You need to make sure the home is in the same condition and that everything the seller agreed to leave behind has been left. If there’s a problem, you’ll want to know before you close.

11. The closing attorney represents me.

Probably not. Unless you signed a specific engagement letter with your attorney, it’s likely the lawyer either works for the lender (and represents its interests, not yours, even though you’re footing the bill) or the closing or settlement company. Either way, no one represents your interests, which could leave you in the lurch should something go wrong or need to be negotiated at the closing.

12. The home I buy this year will be worth more next year.

If only! Home valuations have been on a tear recently, but remember 2008 to 2012? Different story entirely.

Ilyce Glink is an award-winning columnist, the author of several books on buying and selling homes, and the CEO of Best Money Moves, a financial wellness technology company. Find her at ThinkGlink.com. Subscribe to the Globe’s free real estate newsletter — our weekly digest on buying, selling, and design — at pages.email.bostonglobe.com/AddressSignUp. Follow us on Facebook, Instagram, and Twitter @globehomes.