15th Thursday May 2014

The 4 Biggest Home Buying Misconceptions

Written by: Vanessa
Comments: 0
Category: Real Estate Bits
Highland Park: This retreat sold for $66k over asking

Highland Park: This extraordinary retreat sold for $66k over asking

Recently, a very well-qualified home buyer was referred to me that I subsequently dropped like a hot potato. After a few meetings, it was evident that this buyer was clearly delusional and on some potent peyote about buying a house in a seller’s market.

The simple truth is that if a house looks good, is structurally sound, priced well and in a decent neighborhood, it will sell. If the house is exceptional, top to bottom (5-10% of homes), not only will it sell, it will sell for 10% over asking. It’s a mantra home buyers need to commit to memory. Mix that one in with your meditation chants because I can’t emphasize that strongly enough.

So where did my dumped buyer go wrong? For starters, don’t tell me you want to make a $30k below list price offer on a house that already has 15 offers. Below are the most common myths buyers need to give up on because like Nessie, Big Foot and an artificial sweetener with no bad side effects, these just don’t exist.

Disclaimer: These myths are for homes in the Eastside of Los Angeles (one of the hottest regions which includes Silver Lake, Los Feliz, Highland Park and Eagle Rock). These myths don’t apply to boring, box-like newer constructions or streets where you’re ducking bullets.

Myth 1: Deals on Short Sales, Foreclosures, Etc.

I use “deal” liberally as in 50k-100k under market value–yes, some people believe this magic leprechaun property exists. It doesn’t. This does not happen for a house that looks good, is structurally sound, priced well and in a decent neighborhood. The shear numbers of buyers out looking guarantees that the property will be bid up to the market value or more.

Myth 2: Buying a Dump or Fixer in a Great Area

I use “dump” to mean anything from a tear down with mold issues to a dated disaster with vinyl floors and popcorn ceiling. Flossing a great neighborhood is like holding the golden ticket. The winning buyer will almost always be a flipper, developer or cash buyer. Though not entirely impossible (4 clients scored last year under near improbable circumstances), you’re more likely to win the Powerball.

Myth 3: Buying a Home Significantly Below Asking

Similar to Myth 1, it would stand to reason that if I could get you a home significantly below asking, you would not get dumped as a client. By significantly below, I mean as little as $5k in some cases. Again, if the house looks good, etc…don’t even consider it because you won’t get a counter.

Myth 4: Getting Money or Seller Credits at Closing

This may have been the case back in the day during the housing collapse, but it certainly is not the case now. Most sellers now have as many as 2-3 solid backup offers and would dump you in favor of a back up instead of giving up $5k.

That Being Said…

There’s a lot of crap out there. By crap, I mean, shoddy, overpriced unfortunate dwellings and craptastic flips with owners who think they can compete with the tiny percentage of homes that truly stand out (see above photo). They’ll price atrociously high and sadly, some poor misguided buyer with a terrible agent will fall into the trap. Don’t be one of those poor saps. Know what you’re buying and what it’s really worth.

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