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Setting Expectations With Buyers and Sellers


It’s critical to set the right expectations with both buyers and sellers.



 

Today I’m discussing how to set expectations with buyers and sellers both from the start and

throughout the process.


For buyers, despite how fast and crazy the real estate market has been lately, it’s still a good

idea to do a buyer’s consultation. We set up a 30- to 45-minute meeting, the family and I get together,

and we go over these four main things:


1. Ensure they have sound financial guidance. The first thing we do in our consultation is discuss their finances. Have they talked to a large bank, credit union, or broker? Find out what they’ve been told so far and possibly guide them to get another consultation with someone you’ve worked with who you know will be able to do what they need seamlessly. We need to get things done promptly and with a step-by-step process. We don’t want any delays or surprises amid escrow. 


2. Set reasonable expectations. Next, you want to nail down what they’re looking for. Make sure what they want to buy fits with their finances and the location they want. Sometimes school district lines change, so if they want to be in a specific district, ensure you’re looking in the right area. Do they want more bedrooms, fewer bedrooms, a home office? You want to know what their home life is like so you’re not sending them homes to look at that aren’t going to fit into what they need.


3. Ask about commuting. Do they need to live close to work, or are they willing to commute? Many properties in eastern California are much less expensive, but they’ll have to commute, which could mean 45 minutes to an hour in the car. Are they willing and able to do that, or would they prefer to buy a smaller home and have more family time?


4. Ensure closing dates align with other housing arrangements. Escrows are commonly 30 days, so you need to make sure the closing matches up with the end of their lease or moving day. Movers may be busy right now, so we need to coordinate the closing date properly. Also, schools are starting at different times, so moving plans also have to match up with when kids need to be there.



"We need to set these expectations for buyers and sellers from the beginning."


Here are three things to do in service to your sellers:


1. Set reasonable sale time expectations. They might have heard from a neighbor that they will sell their house in one day. Yes, you may sell the house in one day, but it could take much longer to sell if it hasn’t been properly cleaned or scheduled correctly for showings. Take an assessment of the home, and check if it needs any upgrades or staging. Use the available data to see how long the home will be on the market.


2. Reasonably price the house. That same neighbor could have told your client that they will sell for $200,000 over asking price. However, you need to price it at value or a bit below it. Overpricing a house in any market is detrimental because you’ll likely have to decrease the price (possibly more than once) and chase the market downward. Buyers that have already seen the house probably aren’t going to come back once the price falls.


3. Don’t rush the closing process. Again, escrow usually takes 30 days, but some real estate agents are pushing that we close in 20 or 21 days. However, we have to ensure everyone is doing their part, there’s enough time for inspections, and everything is signed correctly. We don’t want an escrow to fall through because everyone’s trying to rush it. 


We need to set these expectations for buyers and sellers from the beginning to ensure things go

smoothly. If you can, it will save everyone from tons of frustration. If you have further questions

about setting expectations or any other real estate matter, feel free to comment below or reach out

via phone, text, or email. We look forward to speaking with you soon.

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What Should Custom Lot Buyers Be Looking for?


Here are six steps to take when evaluating potential land for a new home.



 

In a market like this where multiple offers, overbids, and high prices are commonplace, I have some clients who are looking to the future. They are getting ready to retire in California in about two years, so we’re looking for a custom lot to build their home.


If you’re in the same boat, here are some factors to consider when purchasing a custom lot:


1. Physical inspection. Look for things on the lot itself such as trees, fences, or other debris. Check the property lines, whether it’s gradable or not, etc. 


2. Utilities. What kind of utilities will you need? Are you in the city and hooked up to the sewage system, or are you out in the country and need a septic system? If you do need to put them in, it’s important to factor in those costs.



"Having the right title information will protect you now and in the future."


3. Soil report. This isn’t super expensive. An inspector will take soil samples, do measurements, and give you a report on the soil you have. It could be filler or clay, and there could even be bedrock underneath. You need to have the soil report in order to build a structurally strong foundation for your new home.


4. Title information. You’ll need to do some background research on this lot. A title professional can check for any liens, encumbrances, encroachments, or easements. This will help protect you in the future as well.


5. Check if you’re in an HOA. If you are, you’ll need to review the CC&Rs, HOA docs, and bylaws to make sure the home you’re building will fit in with the community around it.


6. The city. Go into the city records and find out whether there are future city plans down the line for the area in which you’re building. Will you have a giant skyscraper built next door, or will it stay in a secluded area?


If you're set on building a new home, a custom lot is a great way to go. If you have questions about how to start this process or anything else related to real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.

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Bidding Wars: Dos and Don’ts for Buyers


Here are buyers’ dos and don’ts for preparing for bidding wars.


 
In this time of bidding wars, multiple offers, and everything moving so quickly, make sure you’re doing the right things when submitting your offer as a buyer. Here are three dos and two don’ts to keep in mind:

Dos

1. Get pre-approved. I always tell my clients we need to bypass the pre-qualification and go straight to pre-approval. You’ll go into underwriting with your lender, which means they’ll get all the information and qualify you for a loan. They’ll ensure all your forms are done, your income checks out, and everything is verified. Underwriters go through steps the federal government requires for a loan, so the sellers will know that you will be able to close on the home.

2. Make a strong offer. Make sure you’re putting as much money down as you can; the more money down, the stronger you appear. There are a few ways to do this, but one way is to put down more earnest money. An experienced real estate agent can guide you on this, but generally, the earnest money is 1% to 3%, but if you can put down double or four times that amount, your purchase is almost guaranteed, as long as your agent doesn’t remove any contingencies. Put down as much money as you can to help cover all of your closing costs, escrow fees, etc. The seller will take notice if you’re putting down more money than any other offer.

3. Take note of the condition when considering buying as is. When you’re walking through the house, take notes on the eaves, woodwork, plumbing, furnace, air conditioner, and roof, and write down questions to ask the selling agent. Make sure all the maintenance has been updated. These are things you should know about before going under contract. If you decide to buy as is, you’ll know what may need to be repaired. Often, it’s just something small, but if you’re not paying attention, there could be a large expense you’ll be required to pay for after you close.

" Bypass the pre-qualification and go straight to pre-approval."


Don'ts

1. Don’t eliminate the inspection. I would never buy a house without a home inspection, even if it looks great. Make sure it’s done by a qualified inspector who will give you the report in a timely manner so you know exactly what needs to be done when you buy the house.

2. Don’t remove your financial contingencies. If you’re buying with a loan, you have to get an appraisal and get the loan approved. If you remove the loan contingency, you could have huge issues when it’s time to close.

If you have any questions or comments about these points or real estate in general, feel free to leave them below or call, text, or email me. I would love to help you.
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Location: Mission Viejo, CA, USA
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