Never Negotiate on Your Own Behalf. This may seem obvious but you’d be surprised how many newbies to buying a home in Los Angeles make the mistake of trying to set the terms of their own deal. The culprit: The “I can do it, so why not?” line of thinking. Sure, you may be a brilliant dentist, top of the line computer analyst or even a super-savvy dealmaker in your field, but that talent doesn’t apply to real estate. The property world is full of quirks and tricks of the insider’s trade, and having a top real estate agent working on your behalf is key to success, not to mention will save you money in the long run. Nota bene: many people forget that a listing agent – often the person who introduces you to a property – is just that: the agent for the person listing the property. You, as the shopper, are not the person they work for. The buyer’s agent is your friend and advocate.
You Should Choose Your Agent Like Your Financial Life Depends On It – Because it Often Does. There are many factors to keep in mind when choosing a buyer’s agent. Do they know the neighborhood inside out? Do they have the contacts to help you set up home even after the sale? Are they personally a match for you? But the biggest pitfall I see, believe it or not, is newcomers to the luxury Los Angeles real estate scene hiring agents who are not even technically full-time professionals! Buyer, beware: A full tk% of real estate agents make less than three sales in any given year, and many make less than that. An active agent is a good agent, and this should be at the top of mind when making a hire.
Finding out Why the Seller is Selling Is Your First Line Of Defense, and Can Be Used to Wield Valuable Leverage. This tip might sound redundant: Shouldn’t this be your wonderful new agent’s job? Yes, to a degree. But as in any field, the ultimate buck stops with you and the more knowledge you have only helps your chances of landing the home of your dreams at the price point of your preferences. The reason a seller is letting go of a property is a big predictor of how a deal will proceed. If a home’s owners are “just testing the market,” buyers often face an uphill battle. If the seller has already purchased another house, however, they’re motivated to sell – and likely more flexible with the financials. If it’s a “fire sale” – i.e. a property hits the list due to a sickness or death in the family, marriage or divorce – my clients have the biggest opportunity: They sellers want a speedy sale so often agree to a great deal.
Don’t Make An Offer Too Quickly. This tip can be a tough one to follow; once you find that dream house with a tennis court or that once-in-a-blue-moon Brentwood home listing, it takes willpower not to reach out and grab it. But don’t abandon your savvy in the service of swiftness. There are key but important steps that must not be skipped before putting an offer on the table. Among them: Ask for the “seller’s disclosures.” Many first-time clients believe they need to wait until they’ve put in an offer to have a home inspection. Technically that’s true, but a good agent will make sure the property’s soundness of foundation and other systemic issues are established with these documents. Another important thing to know before you name your price: What are the offers you’re competing against? I’m a beta tester for the new – and possibly industry-changing – software program Haus, which makes this information automatic and transparent. Even if your agent is not, often this information is available upon request. Ask about it to position yourself in the most powerful way possible.
Multiple Offers are Not Necessarily Bad – and In Fact Can be Good for a Buyer. The party line is that lots of bidders are a red flag for budget-conscious house hunters. After all, who wants competition driving up the market price when you’re buying a home in Beverly Hills, not to mention the rest of the luxury homes in Los Angeles? But the flip side to that having the price driven up reflects desire for a property. That means when you, say, buy a beach house, you might take a hit on the buying side of the deal – or at least pay a bit more than they’d want or expect – but if you ever offer up that Venice beach house for sale, odds are you’ll make back your money and then some. Play the long game in this scenario – and realize that multiple offers can lead to a different kind of deal.
The list of insider information you should know before you buy is longer than a blog post. For more free advice like this – including info on the hazards of “dual agency” and what “play” money is and how it can affect home prices – email me to receive my free 2017 Luxury LA Real Estate Buyer’s Guide: Ten Essential Tips every Buyer should know.
