Feeling Defeated After a Failed Listing?

Many sellers who have had a listing fail feel defeated, and will want us to simply “bring them a buyer.” That is not the best way to sell a home.

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In the industry, we call a home that has been unsuccessful to sell an “expired listing,” a “cancelled listing,” or even a “withdrawn listing.”

What my team and I have found is that when a home is taken off the market, 60% of those homes still need to sell. So when these kind of homes fall through the cracks, I like to give a call to the seller and see if they would be interested in working with us to help them sell.

Sometimes the seller is simply too frustrated by the previous experience to want to dive right back in. They often tell me they aren’t willing to go through the listing process again, but would be open to the idea of selling if I already had a buyer in mind.

Now, I can understand how difficult it is to come back from a failed experience. The feeling of repeating that same process at the risk of failing again can be overwhelming. My team and I assist with 40 to 60 home sales per year, so we know all about how frustrating it can be.

You’re only doing yourself a disservice when you insist an agent just ‘bring you a buyer.’

Getting a home listed and off the market is a tough, stressful thing to do. But that being said, you’re only doing yourself a disservice when you insist an agent just “bring you a buyer.”

If you are truly interested in selling, and in getting top dollar, the most effective way is to list it on the open market. Putting yourself back out there with the help of the right agent can make a huge difference. After all, how many buyers can I realistically have in mind who will be looking for a home exactly like yours? Statistically speaking, that probably just isn’t your best option.

If you price your home just right or slightly below that point in the open market, you’ll almost definitely create a multiple offer situation. That can be two or 20 offers, but either way, multiple offers put you in a good position as a seller.

When there is competition, the mindset of the buyer will shift from “I want to get the best deal” to “how can I get this property?”

So, yes—we could bring just bring you a buyer. However, this won’t be the best way to get top dollar for your property. Listing with an agent who has a strong marketing and pricing strategy will truly be the best option.

If you want more information or have any other questions, feel free to give me call or send me an email. I look forward to hearing from you soon.

How Discount Agents Cost More in the Long Run

It might be tempting to save a little money up front, but a discount broker will cost you big in the long run.

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The process of undergoing a real estate transaction can be expensive, which makes it tempting to find ways to cut costs. However, you should really think twice before you hire a discount broker.

People find me through a number of ways. I get calls all the time from commission shoppers who tell me they found me on YouTube, heard about me through a friend, or saw one of my flyers. After this, they always ask me, “What do you charge?”

The truth is that I simply don’t have a blanket answer for this. Every situation is different, and that means that the price is too. I do have a commission strategy I charge for most of my clients, but this doesn’t factor in my marketing strategy or the amount of money I’ll be investing into a property.

So when I get these calls, I tend to tell people that I charge between 4% to 7%. I also tell them that the only way I can give them a definite price is for them to come by so we can work together on making a strategy for their specific circumstances.

But the industry is very saturated. Not every agent out there has the same experience I do. Newer agents can become desperate to get a listing. In this case, it isn’t uncommon that you might find an agent willing to charge you 1%.

But is the lower cost really worth the lower level of service? Sellers should remember to focus not just on what they’re paying the agent, but what that agent will be able to help them walk away from the sale with. A seller’s focus should be on their net profit.

My team and I are often able to help sellers net them a higher overall profit despite the fact that we charge a higher price than discount brokers.

Consider the following story. I once got a call from a prospective client who lived in the very same area that I own two homes in. He told me he was thinking of selling his home, but was in a big rush and wanted a good deal. Not only did he want a great commission, he wanted to sell within the next week or two.

Now, I happened to be out of town at the time, but I told him I’d be more than happy to meet the next day and see what we could work out. Understanding that he was in a bit of a bind, I asked him to be sure not to sign a contract with another agent since I have such an intimate connection to the area his home was in.

But when I called the next morning to confirm our appointment, he had done just that. He told me he had listed with another agent who was only charging 1% to list his house. “I need to walk away with the most amount of money,” he said, “so I hired him.”

After that, I watched the listing from start to close. Unfortunately, it was a disaster. The home was listed three days after the contract was signed, which meant the agent did nothing to prepare the home, did no pre-marketing, and didn’t collaborate with professional photographers or any other vendors.

In short, the agent made very little effort in the sale. When it eventually went under contract 45 days later, it sold for $670,000—$30,000 less than the goal I would have set for that property. This is a goal I’m confident I could have helped him meet, since I know the area and my own marketing strategy well enough to know it would have resulted in a closed sale at $700,000.

What you walk away with is much, much more important than what you’ll pay your agent.

So even though he saved a little money on the commission, he got totally burned on the home sale. What you walk away with is much, much more important than what you’ll pay your agent.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

Why Should You Get Pre-Approved Early?

Even if you aren’t looking to buy for several months, getting pre-approved early should always be your first step.

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For a few different reasons, I’ve noticed that buyers who aren’t ready to get pre-approved tend to give me a bit of pushback. This may be because they’re afraid of hurting their credit, because they haven’t found the right home, or because of any number of other factors.

However, this is a case where stepping back to look at the big picture is far more important. Whether you’re looking to buy now or a year from now, getting pre-approved should be your first step. There are ten reasons why this is.

1. Getting pre-approved is free and there is no obligation. When you talk to a lender and get pre-approved, what you’re really doing is setting up a roadmap for the home buying process. Overall, you’ll create more certainty for yourself. This will help you understand things like the kind of loan you’ll need and what price range you’ll be able to afford.
2. It’s a soft credit inquiry.  Many people tend to be nervous about the prospect of pulling their credit to see if they qualify for a loan. FICO understands that you may be getting one, or multiple, pre-approvals as part of the homebuying process. Your credit score may not even be affected. If it is, it will be minimal—pulling your credit to qualify for a home loan isn’t the same as a hard credit inquiry like opening a new line of credit at Nordstroms.
3. Once you get pre-approved, you’re done. Even though certain banks will tell you that your pre-approval is only good for a certain number of months, this isn’t the case so long as your financial situation stays the same or improves. If this is the case, your lender will simply re-issue your pre-approval and you’ll be ready-to-go once more.
4. You get to learn about different options and loan programs. There are many, many options out there that many buyers aren’t even aware of until talking with their lender. So even if you had an idea of what you thought you wanted, the process of getting pre-approved could point you to a different option you like even more.
5. You will learn the price range to focus on. I once had a client who told me he wanted to look at homes in the $600,000 price range because that what’s he assumed he would be approved for. However, after finding one he liked he talked to a lender, got pre-approved, and found out that he qualified for $850,000 price range. Once he found out he could be looking in that range, we realized that we had spent three weeks prior searching for things that were far below what he was able to afford.
6. You will understand your monthly payment. Despite what you might be able to afford, hearing how much homes in that price range will actually cost in terms of monthly payments can be daunting. There’s no need to buy at the absolute top of your price point. Real estate is all about math, so finding a home you’re comfortable with will be as simple as adjusting the price point until you find a monthly payment that sounds reasonable to you.
7. It gives you an opportunity to understand your credit. Many people have imperfect credit, and loan programs tend to work on a tiered system with different levels representing what is available for different credit scores. But even if your credit isn’t the best, you can still get pre-approved and start working on raising your score. This way, you’ll be able to get a better interest rate, a better loan, and a lower monthly payment.
8. You have time to fine-tune things. A client of mine who was pre-approved six months out found out during the process that he had a couple of medical liens on his credit report. This dropped his score by 100 points, which meant he wasn’t able to get the best loan or interest rate. Fortunately, after three months with a credit repair company he was able to boost his score back up by 80 points and qualify for a great loan and a great property. If he had gotten pre-approved right before he wanted to buy, he wouldn’t have been able to get into the kind of property he wanted.
9. It puts you in a position to submit an offer. Buyers with a pre-approval letter are much more attractive to sellers. In fact, many sellers won’t even consider an offer that isn’t supplemented with a pre-approval letter.
10. It’s just the right way to do it. As you can see, there are many reasons why pre-approval is so essential. Getting pre-approved, and doing so early, will make a huge difference in your transaction.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

Tips for Navigating Our Current Market

How can homebuyers and sellers succeed in Orange County’s aggressive market? I have three tips for each side of the transaction today.

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation

How is the market doing? We’re in the middle of a very hot selling season.

If you’ve seen my videos in the past, then you know that inventory starts to grow in March. By May and June, there are a lot more homes on the market than there are in the winter.

As inventory grows, buyers have more options. As buyers have more options, demand tends to fall. This market is pretty active and aggressive in certain parts, and it’s very unpredictable. When inventory has gone up in the past, the market stabilized and slowed down. That hasn’t happened yet, and only time will tell when—or if—the market will slow down at all.    

Still, whether you are buying or selling a home, you have some great opportunities in this market. I have three tips for homebuyers and three tips for sellers to help you succeed.

There are great opportunities in the market for homebuyers and sellers alike.

As a buyer, you need to:

1. Get pre-approved. Sit down with a lender and get educated on what loan options are available in order to understand which one is best for you. Figure out what your monthly payment will be so that you know exactly what you’re getting into. You don’t want to purchase a home and then be surprised by an uncomfortably high mortgage payment. Get the pre-approval process started before your home search so that you know your options and have a lot more certainty when you do enter the market.

2. Understand exactly what you’re looking for and why. When I sit down with my clients to talk about what they’re looking for, they’ll rattle off a list of things they want in a home. I always dig deeper by asking why they want those things. Usually, they start to realize that some of the things they are looking for aren’t necessarily important when it comes to the big picture. Understanding why you’re looking for something can help you whittle down exactly what you want in a home. After all, when you have too many options, it can be difficult to make a decision and find the right home.

3. Have a huddle with your Realtor before you start looking at homes. Sit down with your Realtor and put together a strategy to find your home. Every minute you spend planning saves 10 minutes in execution. If you spend a week putting together a plan, you will save about 10 weeks on your actual home search. You may even avoid getting outbid or missing out on a home that you love. So, sitting down with your agent for 30 or 45 minutes before you start the process will definitely go a long way.

If you plan on selling in this market, you need to:

1. Make sure that your home shows well online and offline. You need to be open to staging and decluttering your home. An interior designer can come through and tell you how to maximize the space in your home. Not every home is perfect; some rooms are smaller than others, so you need to use the right furniture and staging to make your home appeal to buyers.

A good agent will make sure that you get professional photographs taken of your home. Other options include a video tour of your home or a virtual walkthrough. Many buyers come from out of the area, so they aren’t able to see your home in person. Photos and videos are a great indication of what it would be like to live in your home.

2. Price your home right. The market is aggressive. Homes are selling quickly and in many cases, with multiple offers. If a home is overpriced, buyers will focus on a seller with a more realistic price. Again, there are more options on the market and your home is not the only one. It’s important that you understand the market, your active competition, and the current inventory in your area. What did homes sell for in the last month versus three months ago? Pricing your home correctly will allow you to sell quickly without leaving any money on the table.

3. Hire an agent with the right marketing plan. Don’t just hire an agent based on commission. Generally, an agent who charges more can help you sell for a higher net price. Instead of focusing on what you will pay your agent, focus on what they will do for you and your home. How much will they sell your home for? How will that affect your bottom line? At the end of the day, hire an agent with a strong presence in your area, a great marketing plan, and strong negotiation skills.

If you are an investor, buying or selling a property can be a bit more complicated, so give me a call if you have any questions about navigating the current market.

As a homebuyer or seller, those three steps will help lead you to success in this hot market. If you would like to learn more about buying or selling a home, please don’t hesitate to reach out to me. I would be happy to help you!