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Urban legends permeate our culture, even reaching into the real estate and bad credit auto financing sectors. Buyers hitch their dreams to myths of easy financing, nearly zero-cost fixer uppers, and frustrated sellers unloading their homes.

The reality of the situation is that though real estate is more affordable now, the barriers to entering the market are higher.

Seller financing is not always an easy, convenient solution for buyers with poor credit. If a seller obtained a mortgage in the past ten years, the loan probably must be repaid when the property is sold.

If sellers finance the sale, they will not have the money to pay off the mortgage. Even those with older mortgages usually need sale proceeds to purchase their next home. Buyers face risks with seller financing because if the seller skips a payment to the bank, the buyer could end up homeless.

Properties that need cosmetic work are not offered at the bargain-basement prices some people think. Even in this depressed market, sellers invest money in staging and want to get as much money as they can for their properties.

If a house is not in peak condition, it may not sell in this market, so the seller whips it into shape. Buyers usually only find slashed prices on properties that need substantial work.

First-time homebuyers will have a difficult time finding 100-percent financing these days. FHA loans are popular with first-time buyers and these as well as most state and local programs for first-time buyers require some monetary contribution from the buyer. Buyers should save money before looking for their first home.

The idea that banks offer foreclosure properties nearly free is far from true. In general, homes that are bank-owned must be sold at a price as close to fair market value as possible. It is rare that a bank will accept an extremely low offer.

It usually lowers the list price in only small increments and is less negotiable regarding repairs and pricing.