Redondo Beach First Time Home Buyer Tips

I do a lot of Open Houses in Redondo Beach and elsewhere. In fact, if you are visiting this website it may be because you met me at one of those opens. So I get to interact with a many buyers and not just my own Buyer clients. While many things haven't changed, there is no doubt that Buyer behavior is much different now that it was even 5 years ago.

Technology, mobile apps, and sites like Zillow and Trulia have massively impacted the house hunt. Some of the changes are for the better while others are not necessarily to the benefit of the home buying public.

Here's the most common mistakes I see Buyers making in the current market.
  • Poor choice of Lender
  • Only going to Open Houses
  • Not understanding Negotiation
  • Mistaking "Price" and "Pricing"
  • Over emphasis on New Listings
  • Making offers through Listing Agents
So, in no particular order, let me take a little more of a deep dive into these bullet points.

OPEN HOUSES

No doubt Open Houses are great and much more popular these days then just a few years ago. But if you are just limiting yourself to what is open on any given weekend, you may be missing out on your dream home or at a minimum some better options that you should consider.

To start with, not every Seller wants to have an Open House. Why is that? There may be any number of issues such as pets, young children, valuables, privacy or just that they don't want a parade of all the nosy neighbors coming through their home. Also, for properties that have been on the market for 30 days or more (yes I know many of you don't believe that is possible) the Sellers may have simply had enough disruptions to their weekends and prefer to stay at home and watch Football. Particularly now that we have a team in LA.

EMPHASIS ON NEW LISTINGS ONLY

I see this one far too often. The Buyer has (fill in your mobile app of choice) on their phone (or tablet) and gets an instant notification when a new listing hits. That's great, particularly in the low inventory environment we were in until about 5 minutes ago. And, with the photos, virtual tours, 3D tours, drone shots and everything else available you can often decide which to just forget about and which ones are worth further investigation. But, and I see it all the time, there are many homes that aren't the latest and greatest listing and which are slipping through the cracks. Sometimes this is because the property fell out of escrow (often because the buyer didn't qualify or they couldn't work out repair negotiations) or more frequently the listing came out at too high a price. In the latter case it is better to make an offer before the price reduction than after. I'll tell you why. When a Seller has just reduced the price they are not looking to immediately sell it for less. But before the price reduction, which only usually happens when there are no offers, the Seller is worried as to whether it can be sold at all. The Seller doesn't know where the bottom is or the market is. Once the price is reduced the Seller now feels "empowered" and won't take any less.

For the most part, I see a real reluctance among current buyers to make aggressive (not low ball) offers. What I do see is buyers who will say a property is over priced and conclude they will wait for a price reduction. This is a lack of negotiating skill and leads me to me next topic.....

NEGOTIATION

I know how to negotiate Real Estate deal. You, with all due respect my valued readers, really do not.

I am involved in negotiating over 150 transactions a year. Maybe more. Really.

Most weeks I either write 2 or 3 offers which are either countered, rejected or accepted or I am responding to an equal or greater number on my listings. This is what I do for a living. You don't, get over it.

There is an art to successful Real Estate negotiation. And, we will be negotiating much more than just price. There are repairs, credits, move out dates, lease backs, contingency terms and much more.

PRICE VS PRICING

These are really two different things and I am not splitting hairs. It is very common these days for listing agents, your's truly included, to price homes below where they think the final "best and final" will wind up. Why is that? We want multiple offers in order to negotiate the most favorable terms for our clients.

So let's say I list something for $899,000 knowing full well that it most likely will be bid up to $950K or higher. The public is not aware of the real selling price until the deal closes and it becomes public knowledge. Meanwhile they think that a similar home can be bought at the MLS list price which really isn't the price at all. (Sorry) Any active agent working in a certain neighborhood will have a pretty good idea what a property may sell for based on many facts (networking groups, MLS data not published on Zillow or Redfin, etc) that aren't available to the public.

MORTAGE LENDERS

Of course you want the lowest rate available. Everyone does. But you also want a lender who can deliver on that rate meaning the loan docs show up at escrow with no hidden costs or surprises. (TRID had taken a lot of the guesswork out of all that.)

Two things to keep in mind here:

  1. No loan officer can lock your rate until you have a signed purchase contract. So weRlowestrate.com really can't offer you 1.75% with no money down and a 580 FICO score no matter how persuasive they sound.
  2. Unless your credit file has some challenges or you are self employed, you really don't need a Mortgage Broker, you need a direct lender.

MAKING AN OFFER THROUGH THE LISTING AGENT

This is such a bad idea I don't even know where to begin. (Well a bad idea unless I'm the listing agent, lol.) In fact, it is such a bad idea that there are currently a number of lawsuits working their way through the courts right now.

Two reasons why you shouldn't be doing this:

  1. Even the most ethical above board listing agent most likely has more allegiance to the seller - who was her client before you ever walked into the open house, than to you. This can manifest itself in many ways such as maybe not asking for certain credits or repairs, or not getting the best price, etc.
  2. If you are just making offers through listing agent you don't have an agent working for you and you really need that.


If you've read this far, here's a bonus. Visit buyingahouseNOW.com and sign up for a closing cost credit of up to $2500 when I am your agent. You have to go to the website - the picture below is just a screen shot because I like pictures.