TOP 5 MISTAKES BUYERS MAKE TO LOSE
THEIR DREAM HOME
Let's face it; Southern California is a prime destination for many across the US.
A buyers dream home could very well be sold in days, if not hours from when it’s listed. That’s why it’s crucial to have a trusted Realtor on your side to negotiate the best possible deal the moment you know you’ve found your dream home.
Through the years, we've learned a thing or two about snagging the right property at the right time, given any market circumstance. Below you’ll find our version of the top 5 mistakes buyers make that cost them the chance at owning their dream home.
Our goal with this piece is to ensure when you work with a Realtor (hopefully us), you know the key elements that will give you the absolute best chance at buying a piece of your American Dream.
1) They’re Not Pre-Approved (Not Mistaken for Pre-Qualified)
The absolute first step to buying your dream home is getting approved for a loan to buy it, unless you’re buying cash. Now a common mistake buyers, and frankly some agents, make in the beginning stages of a transaction is that they rush to get a PRE-QUALIFICATION.
This process can be done fairly quickly, however, please understand there is a difference between a pre-qualification and a pre-approval.
A pre-qualification is a simple breakdown of your financial situation with a lender to ensure you can actually qualify for the home you are looking to buy. A pre-approval is a deeper and more thorough analysis of your financial situation to prove that you are capable of purchasing your home. During this stage, a lender will take you through a DU (Desktop Underwriter) Approval, and require you to submit prior tax information, pay stubs, employment verification, among other things.
When submitting offers on your dream home, a seller will weigh this DU Pre-Approval much higher on the offer list to those offers than come in with a simple Pre-Qualification.
2) They’re Focused Too Much on List Price
A universal and unspoken concept in the real estate world is that an offer must come at or close to list price. The irony in this is that the list price is merely a biased opinion.
Whether your dream home is overpriced, or underpriced, it’s important to ask your Realtor for the going values of recently (within 3 months) sold comparable sales in the neighborhood, and have them negotiate accordingly.
These comparables are what an appraiser will use to justify the lender financing the loan of your dream home. Knowing the true value of the home you are making an offer on will provide insight on whether to bid above asking price (for a more competitive offer) or below (to prevent you from bringing in the difference between the appraised value and your offer price… yes this can happen).
3) They’re Too Picky About Repairs
Ok, so you’ve got the firepower to make a solid and competitive offer on your dream home. Now let's take it a step further and say you’ve got it accepted! Congratulations, now the fun journey through escrow begins ;)
One of the top reasons deals fall apart AFTER it’s been accepted, is because the buyer, and agent, have not thoroughly discussed BEFOREHAND any repairs the buyer would like to see the seller make.
With due respect, most of the time neither the buyer or agent has the expertise to spot items that need to be addressed before closing. This is why we always recommend the buyer order a physical inspection to be completed during escrow.
Now, as a fair warning, NO HOME is perfect. I repeat, NO HOME is perfect.
In fact, it’s an inspector’s job to point out even the smallest issues with a home during an inspection. It’s not uncommon to have a report come back with 20-30+ issues with a home. To take it a step further, the California Purchase Agreement states clear as day that each home is sold in AS-IS condition, meaning the seller is not obligated to complete any repairs (although most sellers are reasonable).
In essence, having sellers complete repairs above a certain amount (say $500) are fair to ask, yet remember is NOT GUARANTEED. Going into escrow knowing this is key to keeping the deal together through closing.
4) They’re Unaware of Off Market Opportunities
Although the majority of real estate inventory is sold through the Multiple Listing Service (MLS), there are always a handful of deals that are completed off-market.
When you have a strong idea of exactly what you’re looking for, and you can’t seem to find it on the market, ask your Realtor if they’re aware of any off-market opportunities that may suit your needs.
We have a core team dedicated to locating the exact match you're looking for off-market. Our analytics even go so far as to determine who is most likely to sell in the coming 12 months. Let us know if you’re in this situation and we’ll be happy to lend a helping hand.
5) The Buyers Agent Does Not Effectively Communicate with the Listing Agent
As the saying goes, communication is key.
In a world lost in a plethora of ways to communicate with others, the long lost touch of face to face, or phone skills is becoming a lost art, when in fact, it can also be the most powerful way to communicate effectively during negotiation.
When you are deciding on an agent to represent you in purchasing your dream home, ensure to take note of their communication skills.
With nearly 2 decades of real estate experience, we've learned to take communication to heart. Every negotiation needs a personal touch with the other party, and it’s our goal to ensure that happens for your success at winning your dream home.
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Hopefully these Top 5 tips will bring perspective to the buying process, and also shed light on things to keep in mind while chasing your dream home.
Should you need any help or assistance in purchasing your dream home, give us a call/email/text and we’d be more than happy to begin the process with you!