Below are the standard costs associated with buying a property in Silicon Beach. Some of these fees are split between the buyer and seller, as spelled out in the sales contract. The cost split on these fees is, to an extent, negotiable.

As we negotiate the sales contract on your behalf, we will strive to achieve not only the purchase price you want, but to also limit the number and amount of closing costs for which you are responsible.

Don’t let closing costs in Silicon Beach scare you. Knowledge is power.

Please note: your ability to negotiate costs is usually related to whether you are buying in a seller’s market or a buyer’s market. 

I’m here to tell you that in Silicon Beach, the seller versus buyer market debate is a community by community analysis. Any agent who doesn’t understand the distinction locally isn’t paying attention. We talk tons about market trends in our Trendline Report at GetTheTrendline.com.

Buyer Closing Costs

Tax-Related Costs:

Property taxes

Plan on .73% per year with an amount prepaid in escrow. The amount of your prepayment depends on what time of the tax year escrow is closing. Pro tip: Our county assessor’s office here in Los Angeles does not operate on a calendar year, so this calculation might not be as straightforward as it sounds.

The actual amount of your taxes might seem like a lot of money, but don’t forget that under Prop 13, your tax basis is now set for the life of your ownership, except for random bond measures and assessments along the way that might add a modest amount.

Insurance-Related Costs:

• title insurance

• property insurance

• private mortgage insurance (if required by your lender)

• flood, wild fire or other specialty insurance (if required by your lender)

Lender-Related Costs:

• origination fee

• discount points (if applicable)

• prepaid interest (if applicable)

• processing fee

• appraisal review fee

• credit report fee

• courier fees (if applicable)

• underwriting fee

• documentation preparation fee

• wire transfer fee

Other Costs:

• 50% of escrow fees (negotiable)

• property inspection costs

• notary fee

• Buyer Broker commission (if required under a Buyer Broker Agreement)

• recording fee

• termite remediation and other repairs, if not paid by the seller (negotiable)

• home warranty (recommended if not paid for by the seller)

• moving expenses

A rough rule of thumb for guesstimating your costs to buy a home in Silicon Beach is 6% of the sale price. Please note: in a hyper-competitive bidding war, you may want to offer to pay some portion of the seller’s closing costs and that will necessarily alter your calculation.

Want To Know More?

Want to better understand what each of these fees are? Book time for a strategy call and we’ll explain each that applies to your situation, and which apply and which don’t.

Did you know??? We offer commission discounts for buyers. Book a strategy call and we’ll share the details.

This post is from our “Buyer Edge” series, content designed to give real estate buyers in Silicon Beach an edge in a competitive residential real estate market. Read more about our full Buyer Edge program on our website. Want help buying real estate in Silicon Beach? Contact us or grab time on our calendar. Need help beyond Silicon Beach? Reach out and let us help you find a high-caliber agent with hyperlocal expertise in that area. 

What’s On My Mind: New Rules For Homebuyers

T-7 Days & Counting

As of the date of publication of this article, sweeping changes to the real estate industry, courtesy of the recent commission class action lawsuits are upon us. Are you ready? Is the industry ready?

Two of the biggest changes are (1) sellers can no longer offer buyer agent compensation in the MLS; and (2) all buyers must sign representation agreements with their agents assuming responsibility for payment of services.

In today’s edition of my Countdown To Chaos series, I'm continuing to look at the process of buying a home in the new normal. Find Part 1 here. I am speaking specifically to the Beach Cities of LA, but the content is definitely applicable to all of Los Angeles and Southern CA. The content is also mostly applicable to the rest of CA and beyond. Today’s edition outlines all the parts of the process after you’ve identified the property you want to make an offer on, including the new practice changes.

I strongly believe many, if not most, buyers are going to be unpleasantly surprised when confronted with a formal legal relationship with buyer agents in the new paradigm. In my experience, buyers tend to think they are going to get the best deal by “keeping their options open.” This is a false narrative of course, but one I believe is strongly ingrained in home buyer culture.

I firmly believe most buyers will try to buy without representation or use the listing agent to represent them. Both scenarios are fraught with risks for buyers and frankly I see a lot of litigation in our collective futures from homebuyers with buyers’ remorse. Time will tell as we traverse the “New Normal” post-August 17th.

Overview Of The Homebuying Process

Today I'm talking about all the moving parts that go into buying real estate in the Beach Cities of Los Angeles once you’ve identified the property you want to make an offer on, and understanding each part well enough to maximize them to get the terms and timeline you want. Sounds easy, right?

Maybe, but every piece of the equation is a sliding scale that presents opportunities to maximize the benefit to the homebuyer. The process was already plenty complicated, but now we have bonus complications courtesy of the new practice rules effective August 17, 2024.

The process of buying property might seem overwhelming, but it really does come down to 9 simple steps and if you follow the steps I lay out here in the order presented, you have the best possible chance of buying real estate in the Beach Cities on the terms and timeline that suits you.

As I previously wrote, I tend to think of the home buying process as a two part process - (1) finding “the one”; and (2) negotiating/closing on “the one.” Buyers have different needs in each stage and different agent skill sets are highlighted. So let's dive in today and take a peek at each step in the offer, escrow and closing portions of the lifecycle of a home purchase. Find my outline of the Pre-Offer Steps here.

The Home Buying Process, Part 2

Part 2 of the home buying process includes negotiating an offer and closing the transaction via the escrow process. It is my opinion that this is the real heavy lifting in the home buying process, and one fraught with risk if you don’t understand the whole picture and how all the moving parts implicate each other. This is the point when you should be very comfortable with the agent you intend to use and you should sign an agreement for services that will provide your most successful outcome.

Successful Offers

You found the one! Yay! Now you have to successfully acquire it.

The very first step is your agent, hopefully that's us, asking lots of questions to the listing agent about what is important to the seller. The article I wrote called 5 Reasons The Highest Offer Doesn't Always Win explains that sometimes the seller might want something other than the most money and maybe will want that something enough to take a lower offer.

I mean, do you want to overpay if you don't have to? ... I didn't think so.

So it's critical for your agent to be working the listing agent with questions, looking for any negotiation advantage for you, or at least a hook to get the seller's attention.

Almost as important as the price you offer are the contingencies you put in your offer. Contingencies are reasons the deal might fall apart, so sellers look very hard at contingencies and will often go with the offer with the fewest contingencies.

Typical contingencies relate to property condition, appraisal and loans. This is why cash offers are so popular with sellers. Cash is one less contingency that loan either won't close at all or won't close on time.

Each contingency is your "out" if something with the property isn't as expected, which is exactly why sellers try to avoid them. If you're buying with a mortgage, appraisal and loan contingencies aren't generally optional. Unless you have a pot of cash that would allow you to make up appraisal shortfalls or drop the lender from the picture, you're going to need these contingencies.

Property inspections tend to be a little fuzzier in terms of what is required and how long you'll take to complete your inspections. It is important for you to know

that all inspections are paid for by you out of pocket during escrow. For this reason, I always advise my clients to start with a good general inspection and skip other inspections unless the general inspection turns up red flags.

You also need to fully understand the trendline in the neighborhood where you are making your offer. Are sellers calling the shots or do buyers have more power? This is very much a neighborhood by neighborhood evaluation in the Beach Cities.

In seller markets, that is when inventory is tight and sellers are calling the shots, buyers were skipping inspections or taking only 10 days to complete them. Let me tell you, you can barely get a good general inspector scheduled within 10 days, let alone the follow on inspections if some big red flag turns up. You will have to ask for more time and/or be prepared to walk away from the deal. A request for more time may or may not be granted by the seller.

If there are lots of sellers and not so many buyers, buyers have choices and the upper hand. learn more by reading my article called Buyers' Markets vs. Sellers' Markets. If the market favors buyers, you might be able to go in with a lower price or more contingencies, but don't plan on insulting the seller with a low ball offer right out of the gate. You may not get a second chance to get a seat at the offer table for that property.

And speaking of price, read my article called the Value of Sold Listings Data to learn about using recently sold properties data to inform the price you choose.

Another important part of a successful offer is a clean offer. Clean offers demonstrate that you and your agent know their stuff, will be easy to work with and will get the deal closed.

I cannot overemphasize the importance of a clean offer. If there are other buyers and they present as being easier to work with, you may be out, no matter how much you offer.

Part of a clean offer is a fair offer price in light of the trendline in the neighborhood and knowing from questions to the listing agent whether you're competing against other offers.

Fun fact about me. I was an attorney in my first career. You can bet I know how to dot the i's and cross the t's to put your best foot forward with your offer, and I do my homework on your behalf.

Your offer will also define which party is paying certain costs. Currently, the parties tend to split escrow fees 50/50. Other fees include title fees, transfer fees and city fees. All fees are negotiable. The offer is also where you ask the seller to pay for your buyer agent. If you're my client, I will be advising you to write my fees (as defined in our agreement) in as a concession request.

The bottom line when submitting your offer is that your offer must show you understand the process, you're reasonable, you have a good agent, and you show every indication escrow will close in a timely manner so the sellers can move on.

If your offer shows any indication of risk that escrow won't close in a timely manner, and the seller has other buyers who look more credible, they will typically go with the other buyer, or at least they should if they have a smart listing agent advising them.

This is why it is my personal practice to demonstrate with the offer and cover email that you as my buying client know what you're doing, you have your loan or cash ready to go, you are committed to closing on time, you have a good agent, and you are ready to close escrow on the terms you wrote into your offer.

No listing agent or seller wants to get 21 days into escrow only to find out you can't close and they have to go back on the market as a "stale" listing.

One last piece of advice when it comes to submitting property offers, know before submitting your offer whether you are willing and/or have the ability to raise your price if a counter-offer comes back.

Don't wait until you're in an emotional race to get your offer accepted to make this decision. You might regret your decision later or find yourself unable to perform and lose your deposit, which is $30K per million in property price. Losing your deposit in the Beach Cities can be ugly. It's never happened to one of my clients. You don't want it happening to you.

For more on making offers on residential real estate in CA, see my three-part article called Writing A Real Estate Offer in California.

The offer writing process has so many moving parts. This is why it matters who your agent is. Not just anybody can handle the complexities. You certainly don't want Jimmy or Debby in charge of these complexities.

Escrow

Ok! So you thought a lot of work went into the offer process! Getting into the escrow is just the beginning.

I laughed when I found the picture of the girl with the stack of paper, but honestly, that depiction is not that far from the truth. This is California, the land of litigation. The amount of disclosures and other paperwork required is truly mind boggling. You'll also need to think about how you'll take title. You'll be reviewing a title report which is the title history of the property you're buying. It's critical to manage the time and priorities in escrow.

First thing, you'll need to wire your 3% deposit into escrow within three days of opening escrow. You will get this money back if you walk from the deal for any reason allowed under the contract. For example if you have an appraisal contingency and the property doesn't appraise at the amount needed for the loan or if you have a loan contingency and the lender can't get final approval on the terms you can afford.

If you leave the transaction for any other reason, you'll be leaving without your deposit and that is not an insignificant amount of money.

If you're coming in from an east coast state to buy, please understand that we don't use attorneys to close transactions in CA. We use escrow companies with non-lawyers. This is possible because we use highly vetted forms that shouldn't require any legal analysis.

Having said this, it sure doesn't hurt to have me as your buyer's agent with my legal background. I won't give legal advice, but I have a keen nose for smelling contractual opportunities and pitfalls and will point those out as we encounter them.

All the paperwork can be overwhelming but I and my team are with you every step of the way to answer questions.

I want to insert a side note here about electronic signatures. Electronic signatures are used a lot here in LA and are very convenient and speed the process along, but please don't just blindly start signing because the software says "sign here." You are able to review the document via the scrolling functionality before you ever hit the first "sign" button.

My team always sends an explanatory email ahead of any document we send you for electronic signature outlining the salient points in the document, and we stay available for questions. Anytime you want a pdf of a document to review first, we are happy to make that happen.

Don't freak out if the document is accidentally "signed" and gone. It comes back to us, not the other side. I can't speak for other agents, but we would never let that happen! Just let us know there was a mistake and you didn't mean to sign and end the document.

We can start over or if you're satisfied that what you signed is what you thought you were signing, we can move on. We will never ever tell you that a mistaken signature is just too bad, But also, please know that if we don't hear from you about a problem, we will assume you intended to sign what you signed.

A huge part of escrow is taking advantage of your inspection contingency to get to know the property better before you're committed to owning it. Hopefully we were successful in getting you a nice fat inspection period when we negotiated the offer.

Not that long ago, 21 days was normal, then it was 14 days. At the height of the crazy sellers market when rates were 3%, you were lucky to get 10 days and often buyers waived the contingency altogether to get their offers accepted. Fortunately things have calmed down a little in the real estate world, but please know that sellers are still looking for shorter rather than longer inspection periods

For the property inspection, I always advise my clients to start with a simple general inspection with an outstanding inspector to flag potential problems. That person will raise red flags as needed and then we will talk about bringing in specialty inspectors, time and budget permitting.

If time is short and there are obvious issues to inspect, we might want to do the general plus hire certain specialty inspectors right away. Please note that inspectors are out pocket expenses for you during escrow and you don't recoup that money if you walk away from the deal. This is why I like the conservative approach to starting with a general inspection rather than hiring five different expensive professionals out of the gate when you might not need them.

Please also note that some inspectors feel compelled to justify their cost and will write a report citing all kinds of "problems" that aren't really an impediment to owning the property at the price offered. Please further note that if you do turn up problems, you can ask the seller for a credit to repair the issue BUT the seller can also decline your request, at which point your decision is to continue with the transaction or pull out.

Knowing from the offer process how much interest there is in the property (multiple offers, etc) is a breadcrumb for understanding how much leverage you'll have to negotiate a repair credit. Just know that repair credits are not a for sure thing and can be declined.

An inspection item that used to never get discussed was homeowners insurance, but this is a big deal lately. You might get a big case of sticker shock and decide the property is not for you because it's in a flood zone or a fire zone, but really all the Beach Cities have some risk of natural disaster and you'll have to obtain insurance to close if you're using a loan, so be mentally prepared for a big number, but don't avoid doing your due diligence. Call an agent and get a quote as soon as escrow opens. Get this quote before your inspection contingency expires!

If you're making an offer for a property in an HOA, you'll want to inspect pertinent records to confirm that you're not buying into a bad situation, such as a looming special assessment, litigation or obscenely expensive assessments. Lots of people sell to get away from these events and their idea of disclosure is handing you a big pile of documents to ferret out the ugly facts on your own.

You really need to review these documents. I (if I'm your agent) will be skimming them but you might not like something that I think is ok, so make sure you are reading these documents and discussing their contents with your agent.

Ask for more information if you need it. No listing agent is going to want you to blow up escrow because he or she didn't get information you reasonably requested within your contingency period.

Please know that you will be required to formally lift contingencies throughout escrow. If you're not lifting them in a timely manner, a skittish seller can give you notice they are canceling the contract. You'll see all of this spelled out in your offer paperwork.

Once all the contingencies clear, the paperwork is complete, and final funds are wired to escrow either by you (in the case of cash offers) or your lender (in the case of financed properties), escrow closes and the grant deed is sent to the county recorder to be recorded.

Closing costs are not insignificant in CA and can run 3-5% of the purchase price with a biggie being pre-paid property taxes. The amount you pay in escrow is variable depending on the time of year and where we are in our weird property tax cycle.

It is common in California for buyers to get a supplemental tax bill AFTER escrow closes because in escrow you'll reimburse the seller for prepaid taxes at their lower rate, but the property tax you paid will be reassessed at the new purchase price rate once escrow closes, and more taxes will be owed on the difference between the sellers' rate and your new owner rate for the period after the sale.

Please note this analysis assumes the seller bought at a much different tax rate. Sellers who purchased more recently may or may not have purchased at a different rate than you.

Closing costs for buyers are discussed in more detail in my article titled Planning Your Buyer Closing Costs.

Look At You Home Owner

Your offer was successful, you navigated escrow and closed your deal. You've got your keys! Congratulations!! Now what?

You'll want to set up all the utilities right away and change your address with the post office if this is your new primary home. You'll probably want to set up the utilities before escrow closes because I can pretty much guarantee you the seller has their accounts set to close. You will not want to be moving in your first night with no lights.

You should also consider changing the locks. You might like the seller, but you never know who owned before this seller or whether the seller has a crazy stalker or worse, so change those locks!

Now would also be a great time to write a rave review for your agent before you get busy with moving, and think about friends who need to know your agent!

Time To Celebrate!

The boxes are unpacked and your furniture is arranged. It's time to have your friends and family over to toast your new Beach Cities home! Just let us know where to send the champagne! We'd love to join the festivities, but you definitely don't need to invite us, but we would like to send champagne or another treat of your choice, so let us know!

Work With Us?

If you want to work with me and my team, we are happy to talk to you about signing our Buyer Representation Agreement. We use a very simple straightforward agreement with an easy out clause.

Schedule A Strategy Session

Not sure if you're ready to commit to our agreement? We're happy to share listings information and other educational content while you get to know us better, but please know that we share our best ninja tricks for clients who have committed to working with us via a representation agreement.

Explore Our Buyer Learning Library Now

If you think you're ready to sign our agreement but still have questions, grab some time on my calendar and let's chat. Get a link to my calendar by texting the word COFFEE to 424.243.7760.

Are you already working with another agent? Are they your best choice to get you the lowest price on the terms you want? Have they explained all the moving pieces to you? Do they even understand all the moving pieces?

Use our agent interview checklist to decide if they are really your best choice. We are not soliciting you to leave your agent for us. We are telling you to ask yourself the hard questions to determine whether you have the right team assembled for your needs. You are not stuck with a bad agent just because you hastily signed an agreement.

In closing, find the follow on articles below in our Home Buyer Learning Library and message us with questions.

Disclaimer - you are not my client unless we have a written agreement in place. This article is offered for informational and/or entertainment purposes only. Neither I nor Silicon Beach Properties nor eXp Realty, Inc. is responsible for the consequences of how you implement the content of this publication and nothing herein is intended to address your specific situation. Additionally, the information contained herein may be outdated (legally and/or factually) by the time you consume this content, so consult a professional licensed in your jurisdiction for advice.

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In response to recent and impending changes in the real estate industry, we’ve got something BIG coming. We can’t tell you quite yet what is is, but it’s almost here! Can you guess? Click the button to be the first to know.

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Do You Know About Our Office Hours?

We offer Office Hours as a low-key way to get your real estate questions answered without a lot of scheduling and commitment. Twice a week, Tracy hangs out on Zoom and is available to answer all your real estate questions. Click on siliconbeachzoom.com during the designated hours and you will land in our waiting room. Tracy will bring you in when the person ahead of you is done. Everything is private. Here are your next opportunities to join Tracy for Office Hours:

• Thursday, August 29, 2024 from 10 am to noon PT

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Alternatively, private 1:1 conversations can be scheduled here.

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What’s On My Mind: New Rules For Homebuyers

0 Days & Counting

As of the date of publication of this article, sweeping changes to the real estate industry, courtesy of the recent commission class action lawsuits are upon us. Are you ready? Is the industry ready?

Two of the biggest changes are (1) sellers can no longer offer buyer agent compensation in the MLS; and (2) all buyers must sign representation agreements with their agents assuming responsibility for payment of services.

In today’s edition of my Countdown To Chaos series, I'm looking at the process of buying a home in the new normal. I am speaking specifically to the Beach Cities of Los Angeles, but the content is definitely applicable to all of Los Angeles and Southern California. The content is also mostly applicable to the rest of California and beyond. Today’s edition outlines all the parts of the homebuying process up until making an offer, including the new practice changes mandated by the commission lawsuits.

I strongly believe many, if not most, buyers are going to be unpleasantly surprised when confronted with a formal legal relationship with buyer agents in the new paradigm. In my experience, buyers tend to think they are going to get the best deal by “keeping their options open.” This is a false narrative of course, but one I believe is strongly ingrained in home buyer culture.

I firmly believe most buyers in the New Normal will try to buy without representation or use the listing agent to represent them. Both scenarios are fraught with risks for buyers and frankly I see a lot of litigation in our collective futures from homebuyers with buyers’ remorse. Time will tell as we traverse this New Normal post-August 17th.

Overview Of The Homebuying Process

Today I'm talking about all the moving parts that go into buying real estate in the Beach Cities of Los Angeles “pre-offer” and hoping to help you understand each part well enough to maximize them to get the terms and timeline you want.

The process of buying a home might seem overwhelming, but it really does come down to nine simple steps and if you follow the steps I lay out here in the order presented, you have the best possible chance of buying real estate in the Beach Cities on the terms and timeline that suits you.

So let's dive in and take a peek at each step.

The Home Buying Process, Part 1

As I previously wrote, I tend to think of the home buying process as a two-part process: (1) finding “the one”; and (2) negotiating/closing on “the one.” Buyers have different needs in each stage and different agent skill sets are highlighted.

Picking Your Agent

Part 1 starts with picking the right agent at the outset to keep you on track and moving toward your ultimate goal. There are a lot of different personality types out there in the agent world

The truth of the matter is that it doesn't take much to become an agent. Sure, it's gotten a little harder in recent years with a few extra classes required, but it's just not that hard to become an agent and sadly, not everybody who achieves a license is going to be your best choice to represent you.

Take my two friends in the image above, for example. Jimmy will tell you anything to get you to sign on the dotted line and Debby is so timid, she just waits for things to happen and doesn't have the first clue how to make things happen for her clients.

And then there's Team Edge. We are highly educated in all things real estate and constantly learning new and innovative ways to help our clients. We are detail-oriented, systems- and analytics-driven, and we get things done, all while listening carefully to our clients and their stated needs.

It's important that you like and trust your agent, but there is so much more you need in a good agent beyond whether you “like” the person. We've prepared a checklist for you to use when interviewing potential buyer agents. Text the word INTERVIEW to 424.236.6586 to get our checklist.

Dual Agency … Again

On the topic of picking an agent, let me talk for a quick minute about dual agency. This is when you let the listing agent act as your buyer agent. There are so many points in the process where your interests conflict with the seller. Do you really think you're going to get the best deal for yourself by working with an agent who already has an existing relationship and allegiance to the seller?

If you really think that the listing agent is going to be motivated to maximize every opportunity for you over his or her listing client, then I'm really not the agent for you anyway. You want the lowest price and the seller wants the highest price. You want the longest inspection period and the seller wants shortest. You want a concession for big repairs and the seller claims they already baked that number into the list price.

There are so many points in the process where your interests as a buyer diverge from the seller. And don't fall into the trap of believing that you can work with another member of the listing agent's team and still get maximum protection. The agent assigned to you is usually junior and wants to curry favor with the "boss," i.e., the listing agent.

You can read more about my strong feelings about dual agency here and here (spoiler alert! — “[t]here is simply no universe where two competing parties (the buyer and the seller) can both maximize their outcome via one representative, no matter how noble the representative”).

Dual agency is bad news for buyers.

Show Me The Money

There are so many ways the money part of the equation can be massaged to your benefit, but it starts with understanding your money picture and sharing it with your agent so we can strategize together.

Are you buying your property with a mortgage or all cash? Are mom and dad helping? How much do you need for closing costs? How will you pay for your agent representation? These are just a few of the money questions that need to be answered before you even start looking at houses.

Why? because houses move fast in the Beach Cities, no matter what you might be reading about home sales in the national news. The national news is all about getting you to click on the article or staying tuned in through the commercials. Homes on the market for four weeks instead of two suddenly becomes a big "slowdown" according to mainstream media.

I'm telling you as explicitly as I can that you want to have most, if not all, your i's dotted and t's crossed when you find "the one." The odds are high that your "one" is going to be highly appealing to other buyers. Be ready!

Also, not all lenders are created equal, so some shopping around might be a big part of getting ready. Some lenders are good with short escrows and that allows clients to compete with cash buyers. Some lenders can make good loans with smaller down payments. My team works with you to define your goals and pick a lender who can support your goals. Lean on your agent for help finding a great lender. It is important that your agent and lender work well together to support your best outcome.

Talking to a lender will also help you crystallize your target price. you might think you know what you can afford. A lender will know for sure.

If you're using a mortgage to finance your purchase in the current lending environment, my article titled 4 Hacks for High Rates is a must read. For sure don't miss my article titled Do's & Don'ts After Applying For A Mortgage.

By now I'm sure you've heard that real estate rules have changed and sellers are no longer allowed to offer compensation for buyer agents in the MLS. Historically, a seller would sign a listing agreement specifying 5 or 6% (or more) to sell their property and the listing agent would offer part of that commission in the MLS to the broker representing the successful buyer.

Without that mechanism available, the new practice is for buyers to sign an agreement with their brokers assuming responsibility to pay for services, and then ask for a concession from the seller to pay for those fees.1 Although I hope smart sellers will continue to pay these concessions, there is no guarantee of payment and at the end of the day, it will come down to who you're competing with to buy the property.

You have to be ready to give up a property where your concession request is denied or figure out how to pay your agent yourself. You will not want to find yourself in escrow without a good agent once you are under contract.

Shopping Your Wants Versus Needs

So you've picked your agent and put your money strategies in play. Now it's time to start thinking about looking at houses, but first you need to dial in your search (features, price, location). You think you know what you're looking for in your next property, right?

But have you really, really, really thought it through and made a list of what you want versus what you need?

For instance what do you love about your current home that you want to replicate in your next? An easy commute, a favorite restaurant nearby, mom is close by? The things we take for granted are hard to remember in the heat of a bidding war. Conversely, what do you want to do better in your next home?

We designed a series of surveys for our clients to walk them through the different aspects of buying a property on the topics of life, the property, the neighborhood and how to work with an agent, to help them create a Wants Versus Needs Inventory. Make sure the agent you choose is asking similar questions and encouraging to your write some kind of inventory.

Before you start looking at homes, you will thank yourself if you go armed with your inventory. For instance, you might find a house that isn't perfect, but it's in the perfect neighborhood. If you can evaluate the property against a list of priorities, you might discover that you can make the house perfect next year with the addition of an ADU while simultaneously snagging the property in the right location for a price you can live with this year.

Ask me sometime about the story of my own home where I had 15 minutes to tour before deciding whether to make an offer. It was a blindingly fast 15 minutes, especially with me being 6 months pregnant, but we knew what we had to have. 20 years later, we're still happy with our choice.

By the way, it's ok if your wants and needs shift as you see more homes and neighborhoods, but you really want to revise your inventory and continue to use it with every home you tour.

Touring Homes

Touring homes is the fun part. It can be a lot of work, but you spend your time imagining your future life and that can be kind of cool. We can set up private tours for you or we can take you on a facetime tour from the comfort of your current home.

You will need a buyer representation agreement to tour homes both in person and virtually, so please know that we will be asking you to sign our agreement prior to touring, but don't worry about signing up to marry us before you even know us. Our agreement has an easy out for both of us if we don't click. In fact, we're happy to refer you to another agent if we're not for you.

We highly recommend against going to open houses without us unless you want to feel like fresh meat at a sharkfest. Agents usually aren't hosting an open house to sell the property. They are trolling for buyer clients and will put the full court press on you the minute you step through the front door. I've had agents press me to sign in when I've already identified myself as an agent. It can be brutal (and so ridiculous!).

We're happy to accompany you on an open house tour and point out the pros and cons of each property. We understand if you want to attend open houses without us, but call us if you want more information about the property or to see the house again. Definitely tell the agent hosting the open house you are working with another agent and don't let them tell you have to sign their agreement to tour the property.

The only agents who have to have a signed agreement with you are agents who are expecting to ultimately be paid for representing you in escrow. If an open house agent hassles you about an agreement, get me on the phone and I'll set them straight. 😁

Next week, we’ll look at Part 2 of the purchase process — the offer, escrow and closing portions.

Work With Us?

If you want to work with me and my team, we are happy to talk to you about signing our Buyer Representation Agreement. We use a very simple straightforward agreement with an easy out clause.

Schedule A Strategy Session

Not sure if you're ready to commit to our agreement? We're happy to share listings information and other educational content while you get to know us better, but please know that we share our best ninja tricks for clients who have committed to working with us via a representation agreement.

Explore Our Buyer Learning Library Now

If you think you're ready to sign our agreement but still have questions, grab some time on my calendar and let's chat. Get a link to my calendar by texting the word COFFEE to 424.236.6586.

Are you already working with another agent? Are they your best choice to get you the lowest price on the terms you want? Have they explained all the moving pieces to you? Do they even understand all the moving pieces?

Use our agent interview checklist to decide if they are really your best choice. We are not soliciting you to leave your agent for us. We are telling you to ask yourself the hard questions to determine whether you have the right team assembled for your needs. You are not stuck with a bad agent just because you hastily signed an agreement.

In closing, find the follow on articles below in our Home Buyer Learning Library and message us with questions.

Read/Watch Episode 5B

Disclaimer - you are not my client unless we have a written agreement in place. This article is offered for informational and/or entertainment purposes only. Neither I nor Silicon Beach Properties nor eXp Realty, Inc. is responsible for the consequences of how you implement the content of this publication and nothing herein is intended to address your specific situation. Additionally, the information contained herein may be outdated (legally and/or factually) by the time you consume this content, so consult a professional licensed in your jurisdiction for advice.

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A program with a plan! A plan to get you ready to buy a home in 90 days. Checklists and actionable to do items plus an opportunity to get your questions about the process answered. Don’t have 90 days? The program is self-paced. Burn through it as fast as you want or need.

👉👉 More information on 90 Days To Homeownership

Coming Soon: Something Totally Innovative In Real Estate

In response to recent and impending changes in the real estate industry, we’ve got something BIG coming. We can’t tell you quite yet what is is, but it’s almost here! Can you guess? Click the button to be the first to know.

I want to know!

Do You Know About Our Office Hours?

We offer Office Hours as a low-key way to get your real estate questions answered without a lot of scheduling and commitment. Twice a week, Tracy hangs out on Zoom and is available to answer all your real estate questions. Click on siliconbeachzoom.com during the designated hours and you will land in our waiting room. Tracy will bring you in when the person ahead of you is done. Everything is private. Here are your next opportunities to join Tracy for Office Hours:

• Thursday, August 22, 2024 from 10 am to noon PT

• Sunday, August 25, 2024 from 10 am to 1 pm PT

• Thursday, August 29, 2024 from 10 am to noon PT

• Sunday, September 1, 2024 from 10 am to 1 pm PT

Alternatively, private 1:1 conversations can be scheduled here.

Find Tracy Around The Web

Let’s make sure we’re connected in the places you like to hang out. Here’s where you can find me and what I post on those platforms:

• Have We Met? Read my bio

• My YouTube Channels - TracyTalksReal & TracyTalksRealLOCAL

• My Beach Cities LA Real Estate Company - search for homes, save listings, meet the team

• Twitter - mostly housing politics commentary

• LinkedIn - real estate news & insights

• Facebook - local real estate news & insights

• Instagram - local real estate news & insights

• Digital Office Hours - I hang out and you come ask questions 😊

• Schedule a 1:1 meeting for Zoom or IRL

Content Authenticity Statement

100% of this week’s post was generated by me, Tracy Thrower Conyers. No AI here. And if I add any, I will tell you. 😊

Legal Stuff

Advertisements in this post have paid to be promoted and, as a result, I receive direct financial compensation for promoting them. Sometimes I promote people, places and things strictly to show support without compensation. Ask me if you have questions.

My real estate company, Silicon Beach Properties, and I maintain partnerships and affiliate relationships with other companies. Look for asterisks** to signify such a relationship. Assume we are compensated, but that won’t always be the case.

Until Next Week…

Be well and use this link to refer others to The Trendline. Let’s grow a community!

Contact Tracy

Business Referrals

Read/Watch Episode 3

What’s On My Mind: Sellers Should Continue To Pay For Buyer Representation

14 Days & Counting

As of the date of publication of this article, we are 14 days away from sweeping changes to the real estate industry, courtesy of the recent commission class action lawsuits. Are you ready? Is the industry ready?

Two of the biggest changes are (1) sellers can no longer offer buyer agent compensation in the MLS; and (2) all buyers must sign representation agreements with their agents assuming responsibility for payment of services.

In today’s edition of my Countdown To Chaos series, I'm looking at four compelling reasons sellers should consider paying for the buyer's agent going forward into the New Normal. Historically this wasn't discussed, it was just done. It was widely known how much the buyer agent would be compensated because the number was published in the MLS.

I'm not going to comment on the propriety of past practices, but I will say that taking the offer of compensation out of the MLS is the dumbest idea ever and a huge step backward for transparency, but hey, what do I know as a longtime consumer fraud attorney and real estate broker? Cue the eye roll.

I've already heard from sellers directly, and heard plenty of stories from other agents, that sellers can't wait to reclaim the 2.5-3% previously reserved for the buyer's agent for their own pocket, but is that really the smartest play for sellers interested in getting top dollar and the best terms on the sale of their property? I am strongly in the NO camp.

Please note as you read this publication that my licensure, expertise and focus are California, but my observations can be used to ask specific questions to listing agents in any state.

Let's start with a few universal truths about selling a home to achieve the top price and best terms.

Universal Truths When Selling A Home With The Goal Of Top Dollar

Universal Truth #1: to achieve top dollar and the best terms on the sale of your property, you need as many buyers as possible competing to buy your property. One buyer at the table won't even offer you list price if he or she has a good agent. And they will know they are the only player when the counter offer doesn't come back on a Seller Multiple Counter Offer (SMCO) form. Two or a few buyers will compete, but likely not as vigorously as with many buyers.

I feel so strongly about this Universal Truth that I previously developed a proprietary formula I use with my seller clients to ensure that we have the maximum number of competing buyers at the table. Ask me about it if you are thinking about selling your residential property.

Universal Truth #2: listings that linger on the market are frequently stigmatized, with buyers and their agents wondering why the property is still on the market if it's so great. The same questions come up when the MLS shows a property has fallen out of escrow. Assumptions are generally made that there is a problem with the property, not the buyer.

Universal Truth #3: Buyers have four options when it comes to buyer agent representation. The buyer can (1) bring a highly paid top notch agent who will make sure the transaction runs and closes smoothly; (2) bring a low-budget, mediocre (or worse) agent who will either cause problems or do nothing; (3) come without an agent and slow things down because nobody is available to explain things and answer questions; or (4) use the listing agent or somebody on that agent’s team to represent their buying interests.

Universal Truth #4: buyers are generally cash strapped when it comes to buying a home. They want to maximize down payments, insurance for new insureds is astronomical right now, loan costs and closing costs are a big chunk of change and paying out of pocket for inspectors is often a surprise expense. Adding the cost of a good agent to their expenses is going to be more than many can bear. Cross-refer to Universal Truth #1.

So given the context of the Universal Truths, let's look at each of the reasons I think a seller would be making a mistake by not paying for the buyer's agent.

4 Compelling Reasons Sellers Should Pay For Buyer Representation

Reason #1: Maximum Exposure For Your Property Brings Top Dollar

Most people think that a listing in the MLS and sign in the yard is all it takes to sell a house. While those two strategies bring exposure, your goal as a seller (via your listing agent) is to bring as many people as possible to see your property, fall in love with it and fight other buyers to own it. Refer to Universal Truth #1.

In recent years, with a lack of listings, one of my primary tasks when working with buyers has been to encourage them to broaden their search area beyond that one neighborhood they were sure they had to have. Seeing in the MLS that you are willing to pay or entertain concessions to cover my buyer's agent fees will make your property more attractive, and my buyer client might be more inclined to take a look and hopefully fall in love.

You want to incentivize an army of agents to introduce your property to their buyers. The MLS alone only works if buyers are searching your specific neighborhood on all the platforms that publish MLS data. It takes smart, experienced agents to open up buyer eyes to alternatives like your property.

Reason #2: You Want Escrow To Run Smoothly & Close

Escrow (or Settlement if you're in a state where attorneys close real estate transactions) can be the trickiest part of a real estate transaction. Often an aggressive schedule is spelled out in the contract because sellers want the deal buttoned up sooner rather than later. Inspections have to be scheduled and the resulting reports have to be reviewed. Remediation costs may need to be investigated. Issues may come up with title. Insurance has to be obtained. A raft of paperwork needs to be signed.

As you might imagine, there are what feel like a hundred different ways for escrow to fall apart.

Escrow problems can lead to heartburn, delay and/or a deal unraveling. An experienced buyer agent on the other side will manage the escrow obstacles, and manage his/her client and their expectations.

Your odds of a smooth escrow are infinitely enhanced with a good buyer agent and if you're paying or conceding top dollar, the buyer can afford a good, experienced agent.

If your escrow crashes and burns, you're faced with going back on the market, and instead of being 7-14 days on the market ("fresh"), you'll be adding the number of days you were in escrow to your number. 😱 Refer to Universal Truth #2.

Reason #3: Knock, Knock You're Served!

If you google "buyer's remorse," the definition literally cites car purchases and home purchases. If you won't pay for the buyer's agent, the buyer might be tempted to do without an agent. A lay person will simply not be able to manage escrow on their own and you'll be stuck with your stale listing going back on the market. And that's the best case scenario.

Let's say the unrepresented buyer (or under-represented buyer if the buyer had to go low budget on a substandard agent) manages to close escrow on their own, what happens when they are not happy with the property after the deal closes? A lawsuit-happy buyer will be a disaster for you, as a seller.

If there is a good agent on the buy side because you paid for it, you have somebody to talk the buyer off the lawsuit ledge. Failing that, that agent is going to be insured and that helps put you a little further from the hot seat.

Reason #4: Sellers Are Usually In A Better Position To Absorb Extra Costs

This reason is more compelling if you stand to make a big gain on your sale, but if you do, you are also likely looking at big taxes on that gain. Paying the buyer agent is a cost to you that can be offset against your gain.

Given the other reasons it serves you to have solid representation for the buyer, and the fact that paying for that representation is a deductible cost for you, why wouldn’t you pay that commission? 🤔

How To Pay For The Buyer Agent In The New Normal

So, assuming I've convinced you it's in your best interest to have a qualified agent representing your buyer and you are willing to pay for that agent, how do you make it happen?

In the Old Normal, you as a seller would have signed a listing agreement agreeing to pay typically 5-6% in commissions. Then the listing agent would have decided how much to offer the buyer agent, and posted the amount in the MLS with the rest of the property details.

This commission field is being disabled in all MLSs, effective 8/17 (at the latest). This is due to one class action case in one small midwestern state imposing stupid rules on agents and MLSs nationwide.

How to advertise a commission for buyer agents by sellers has been a hotly debated topic in the real estate industry since the class action case was settled in March. Some very large players in the industry believe it is still ok to advertise the commissions anywhere except the MLS. Others argue that would fly in the face of the spirit of the settlement.

There is another way. The alternate strategy is to simply be ready as the seller to entertain a concession request in offers to cover the buyer agent commission. The advantage to this strategy is that buyers simply make their best offer, with or without a concession request, and you line up all the offers with your agent and evaluate the bottom line number. This is the most straight forward approach.

Either route (advertising a commission someplace or entertaining concession requests) gets a seller to the same point, but I contend the second strategy is the most efficient.

Do Not Let Your Listing Agent Engage In Dual Agency

As a former consumer fraud attorney, dual agency makes me crazy! Dual agency is where one agent represents both the buyer and the seller. "There is simply no universe where two competing parties (the buyer and the seller) can both maximize their outcome via one representative, no matter how noble the representative", as I previously wrote in Part 3 of this series.

Even another agent on the listing agent's team is a risk if that person is junior to the listing agent and beholden to the listing agent for his or her livelihood. There just isn't enough protection to both the buyer and the seller in this scenario.

Technically, dual agency also applies to any agents under the same broker, whether or not they are on the same team, and where the broker has any influence over one or both of the agents, I would steer clear. The cleanest agency comes from separate brokers who can separately and zealously represent their respective clients.

To put it simply, you don't want your listing agent sharing your secrets with the buyer, and the buyer shouldn't want their secrets shared with you.

This is going to be on you as the seller to insist on. I'm already hearing plenty of agents and agent coaches saying the New Normal will be the golden era of dual agency. Do not play along. The odds of one side or the other getting less than zealous representation are too high. If there is litigation, dual agency is a risk card that will be played. Don't be the party that allowed it. Write a prohibition into your listing agreement.

Final Thoughts

I’ve provided not just one, but four good reasons that sellers should want to pay for good representation on the other side. Did I convince you? Let me know in the comments. I’m genuinely interested in hearing from consumers how they are reading the situation with the new rules.

So mark your calendars! The New Normal is upon us, effective August 17th. My own MLS is removing the commission field sooner. 

Schedule A Strategy Session

Next week I’ll be sharing my thoughts about what consumers can expect from buyer agents in the New Normal with the formal agreement requirements.

Read/Watch Episode 5A

Read/Watch Episode 5B

Disclaimer - you are not my client unless we have a written agreement in place. This article is offered for informational and/or entertainment purposes only. Neither I nor Silicon Beach Properties nor eXp Realty, Inc. is responsible for the consequences of how you implement the content of this publication and nothing herein is intended to address your specific situation. Additionally, the New Normal is very much in flux and the information contained herein may be outdated (legally and/or factually) by the time you consume this content, so consult a professional licensed in your jurisdiction for advice.

Unsubscribe?

If I missed the mark for you this week, I hope you'll give me one more shot, but if that won't work for you, here is an unsubscribe link.

Share My Work?

If you liked my column this week, please share with others so we can grow our community and I can get more feedback on what people want to read. Use this link to refer others. And just to make it fun, there are referral rewards. Let’s grow a community!

Advertisement: 90 Days To Home Ownership

A program with a plan! A plan to get you ready to buy a home in 90 days. Checklists and actionable to do items plus an opportunity to get your questions about the process answered. Don’t have 90 days? The program is self-paced. Burn through it as fast as you need.

👉👉 More information on 90 Days To Homeownership

Coming Soon: Something Totally Innovative In Real Estate

In response to recent and impending changes in the real estate industry, we’ve got something BIG coming. We can’t tell you quite yet what is is, but it’s almost here! Can you guess? Click the button to be the first to know.

I want to know!

Do You Know About Our Office Hours?

We offer Office Hours as a low-key way to get your real estate questions answered without a lot of scheduling and commitment. Twice a week, Tracy hangs out on Zoom and is available to answer all your real estate questions. Click on siliconbeachzoom.com during the designated hours and you will land in our waiting room. Tracy will bring you in when the person ahead of you is done. Everything is private. Here are your next opportunities to join Tracy for Office Hours:

• Sunday, August 4, 2024 from 10 am to 1 pm PT

• Thursday, August 8, 2024 from 10 am to noon PT

• Sunday, August 11, 2024 from 10 am to 1 pm PT

• Thursday, August 15, 2024 from 10 am to noon PT

Alternatively, private 1:1 conversations can be scheduled here.

Find Tracy Around The Web

Let’s make sure we’re connected in the places you like to hang out. Here’s where you can find me and what I post on those platforms:

• Have We Met? Read my bio

• My YouTube Channels - TracyTalksReal & TracyTalksRealLOCAL

• My Beach Cities LA Real Estate Company - search for homes, save listings, meet the team

• Twitter - mostly housing politics commentary

• LinkedIn - real estate news & insights

• Facebook - local real estate news & insights

• Instagram - local real estate news & insights

• Digital Office Hours - I hang out and you come ask questions 😊

• Schedule a 1:1 meeting for Zoom or IRL

Find Tracy In Real Life

Here are the public events where you can find me in coming weeks. Say hi if you’re in the house.

• August 11th - Emerson Ave Community Garden Annual Tomato Tasting

• August 17th - Pulling My Hair Out In The Corner As Consumers & Agents Everywhere Finally Realize Everything Has Changed 😁

• August 20th - Neighborhood Council Planning & Land Use Committee Meeting

• August 26th - Neighborhood Council Community Plan Update Ad Hoc Committee Meeting

Content Authenticity Statement

100% of this week’s newsletter was generated by me, Tracy Thrower Conyers. No AI here. And if I add any, I will tell you. 😊

Legal Stuff

Advertisements in this newsletter have paid to be promoted and, as a result, I receive direct financial compensation for promoting them. Sometimes I promote people, places and things strictly to show support without compensation. Ask me if you have questions.

My real estate company, Silicon Beach Properties, and I maintain partnerships and affiliate relationships with other companies. Look for asterisks** to signify such a relationship. Assume we are compensated, but that won’t always be the case.

Until Next Week…

Be well and use this link to refer others to The Trendline. Let’s grow a community!

Contact Tracy

Business Referrals

Read/Watch Episode 2

What’s On My Mind: New Mandatory Buyer Agreements

40 Days & Counting

As of the date of publication of this article, we are 40 days away from sweeping changes to the real estate industry, courtesy of the recent commission class action lawsuits. Are you ready? Is the industry ready?

Two of the biggest changes are (1) sellers can no longer offer buyer agent compensation in the MLS; and (2) all buyers must sign representation agreements with their agents assuming responsibility for payment of services.

In today’s edition of my Countdown To Chaos series, I'm looking at mandatory buyer representation agreements, including their newfound significance and terms you might be asked to agree to as a home buyer. Historically in my area, buyer agreements have been rarely used.

I was just starting to rigorously apply buyer rep agreements to my own business when the class action lawsuit gained traction and ultimately settled. I changed my practice not because I thought anything was wrong with common industry practices. My personal changes were more about educating buyers about picking a strong agent and committing to that agent.

I strongly believe many, if not most, buyers are going to be unpleasantly surprised when confronted with a formal legal relationship with buyer agents in the new paradigm. In my experience, buyers tend to think they are going to get the best deal by “keeping their options open.” This is a false narrative of course, but one I believe is strongly ingrained in home buyer culture.

Please note as you read this publication that my licensure, expertise and focus are California, but my observations can be used to ask specific questions to buyer agents in any state.

Home Buyers & Their Agents

At the top of this article, I mentioned two big changes coming in just over a month, but only change #2 appears on its face to apply to buyers. It's important to understand, however, that without express offers of compensation to buyer agents in the MLS (change #1), it is possible, and maybe even probable, that buyers will be faced with paying their agent themselves. 

This is a huge departure from historical practice and makes the new representation agreements signed with buyer agents all the more important to understand.

As an initial matter, do buyers even need an agent? I bring this up because it is most certainly a question buyers will ask themselves as they grapple with the strong possibility of yet another expense in buying a home. As I mentioned in Part 1 of this series, buyers could certainly skip representation and the hassle of who pays for the services, but really only if:

"they buy and sell frequently and know how to price an offer (especially in the new paradigm), size up the listing agent, negotiate a multiple offer scenario, schedule their own inspections (usually on a short timeline), wrangle their lender into funding on time, negotiate repairs based on inspections, and analyze and sign a whole stack of legally binding paperwork."

Clearly I tend to believe most buyers will make a grave mistake representing themselves. 😁 I also outlined a long list of services that buyer agents expertly provide in Part 2 of this series.

What about using the listing agent or another agent on the listing agent's team to make an offer, aka "dual agency?"

I wrote extensively about dual agency here. There is simply no universe where two competing parties (the buyer and the seller) can both maximize their outcome via one representative, no matter how noble the representative.

Will buyers really end up paying for their agent, along with all the other piles of money required to close a modern day home purchase transaction?

It remains to be seen how sellers will react to the new shift. There are solid reasons sellers should consider paying for the buyer's agent, reasons I'll address in a future edition of this series, but only time will tell how these changes shake out in practical application.

But no matter what sellers intend at the outset when they sign their listing agreement (where they historically agreed to pay the buyer’s agent), buyers will always be able to add a term in their offer asking for a seller credit to cover the buyer agent fee. Buyers, however, need to understand that not every competing buyer will include the same request in their offer, and a property might be lost because their offer is not financially on par with other offers.

Assuming you agree with me that you shouldn’t represent yourself, you will need to think about the agreement you sign with an agent to help you through your next steps.

What Do Buyer Agreements Look Like At This Stage?

The primary lawsuit instigating all these changes was settled only four short months ago and then preliminarily approved by the judge only in late April.

Final approval won’t even come before late November, but practice changes must start August 17th as part of the settlement. 

There are still a lot of people scratching their heads trying to make sense of the language of the settlement. Add to that, the DOJ making noise about how they might try to influence the new process, and you can see why I’m predicting “chaos” for the foreseeable future.

You can also see why new agreements are still very much in flux.

Realtor associations across the country have been scrambling to come up with new MLS rules and recommended buyer representation agreements. Here in California, the California Association of Realtors (the “CAR”) published their recommended agreement and related forms on June 25, 2024, and found their efforts immediately criticized, prompting an implementation postponement until July 10, 2024 (later this week at the time of publication). 

Suffice it to say, buyer representation agreements are still very fluid, even as the August 17th deadline looms large. Most agents in California use the CAR documents. Here’s hoping the revised version is simplified and more clear than the originally released version with its 4000 words and 39 internal cross-references.

According to the National Association of Realtors, buyer agreements going forward must include four components:

1. A specific and conspicuous disclosure of the amount or rate of compensation the real estate agent will receive or how this amount will be determined.

2. Compensation that is objective (e.g., $0, X flat fee, X percent, X hourly rate)—and not open-ended (e.g., cannot be “buyer broker compensation shall be whatever the amount the seller is offering to the buyer”).

3. A term that prohibits the agent from receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer; and

4. A conspicuous statement that broker fees and commissions are fully negotiable and not set by law.

eXp Realty**, is offering an alternative to the CAR agreement. eXp’s agreement has generally been heralded as “much simpler, clearer, and pro-consumer than the CAR agreement."

If you know anything about me at this point, you know that I really dig “pro-consumer.” 🏡💪

eXp for the win.

The eXp agreement is indeed simple. It is less than two pages and outlines the property type and geographic area defining the relationship. You are free to limit the geographic scope as narrowly as you desire. You could list a specific street, for example. Agents will want to define the area as broadly as possible. The time period defined in the agreement can be narrowly defined, as well. 

Interestingly, the eXp agreement only obligates you to pay a fee if you use the agent to make an offer. Make sure this term is in whatever agreement you sign, unless you are 100% positive you are ready to commit to the agent for the entire transaction.

I will hazard a guess that most agreements will not end up being as simple or pro-consumer as the eXp agreement, but all buyer representation agreements, no matter who they are offered by, are negotiable. Use an eXp agent or tell your non-eXp agent you want a representation agreement that looks like the eXp agreement.

The Home Buying Process, Part 1

I tend to think of the home buying process as a two part process - (1) finding “the one”; and (2) negotiating/closing on “the one.” Buyers have different needs in each stage and different agent skill sets are highlighted.

Part 1, in my mind, is that part of the process where you might consider going it alone without a formal agent relationship, at least at the outset.

For example, you might want to start your search on your own with open house visits. This isn’t particularly practical, but it can work for initial research. The alternative is to use an agreement like the eXp agreement, making it clear to the agent that you are only committing to the agent for the houses you tour with the agent.

The alternative is to set your own showings, although the current system does not make it easy to find the listing agent’s contact information. It’s also a huge wild card whether listing agents will be willing to make showing appointments with unrepresented buyers.

They might agree to show you the property in hopes of enlisting you in a dual agency relationship, but you can bet money they won’t try very hard to make a showing appointment absent this possibility, even though they owe their seller every obligation to show the property widely.

This opportunity (letting the listing agent think dual agency is a possibility) might be something for you to take advantage of in your early research, knowing that you are under no obligation to sign an agreement with anybody not expecting a commission to show you a home (ie, the listing agent).

Please read that paragraph again.

Listing agents should be willing to show the property without a buyer representation agreement. Nobody who doesn’t expect a fee from you needs a signed agreement with you.

Don’t let a listing agent tell you must sign anything to see the property. If they insist you sign an agreement, they are pushing a dual agency relationship that is not in your best interest and will prevent you from bringing in your own agent later.

The Home Buying Process, Part 2

Part 2 of the home buying process includes negotiating an offer and closing the transaction via the escrow process. It is my opinion that this is the real heavy lifting in the home buying process, and one fraught with risk if you don’t understand the whole picture and how all the moving parts implicate each other. This is the point when you should be very comfortable with the agent you intend to use and you should sign an agreement for services that will provide your most successful outcome.

Final Thoughts & Practical Application

If you agree with me that you need a great, independent agent to shepherd you through one or both parts of the home buying process, you will need to sign a representation agreement at some point. The topics you need to sort out for yourself ahead of signing any such agreement include:

• How much are you willing to pay for professional representation? Don’t assume good agents will work for an hourly rate (although this may evolve for “showing” agents).

• Do you understand and have a strong opinion about independent representation?

• Do you fully understand the distinction in finding and touring houses versus the offer negotiation and escrow process (ie, Part 1 & Part 2)?

• Do you understand that most talented agents will not be willing to take a lower compensation just because the rules have changed? If somebody is willing to take a big cut, make sure you’re comfortable that they are the most qualified agent for your situation.

• Do you understand that you can ask the seller for a credit as part of your offer to pay for your agent?

• Do you understand that asking for such a credit might make your offer less attractive than a competing offer?

• Do you have liquid resources available to pay your agent if the seller won’t provide a credit?

• Are you willing to walk away from a property if the seller won’t agree to a credit to pay your agent? 

Having thought about the foregoing topics ahead of time should make it easier to understand and navigate the representation agreement process. Use the eXp agreement as your guide.

If anything in the agreement you’re asked to sign is different than the eXp agreement, ask your agent to explain the significance of the differing language, and document your understanding in a follow up email. You will want this paper trail if there is a disagreement later about the agreement you sign.

Don’t be afraid to refuse to sign an agreement until you fully understand the terms and they say what you want them to say. Cross things out. Write in your own terms, but be aware that this is a legally binding agreement and unless you’re a lawyer, you may not fully comprehend the implications of what you’re writing or crossing out.

But at the end of the day, the universal truth is that “The Broker Fee is not set by law and is fully negotiable, as plainly stated in the eXp agreement.” You are fully within your rights to end up with an agreement that serves your highest interests.

Another pro-consumer aspect of the eXp agreement is the “easy out” cancellation policy. You can cancel any time, unless you’re under contract for a property that the broker helped you negotiate. 

I fully expect residential real estate to be the wild, wild west for six months to a year after August 17th, while the changes get ironed out in practical application. The changes are seismic for buyers, but they are big for sellers, too, in ways that will take some time for most sellers to appreciate.

So mark your calendars! You have just over a month to lock down a deal and expect the old rules to apply. 

Schedule A Strategy Session

Next week I’ll be looking at reasons why sellers will want to continue to pay to have a good agent in the transaction representing the buyer.

Read/Watch Episode 4

Read/Watch Episode 5A

Read/Watch Episode 5B

Disclaimer - you are not my client unless we have a written agreement in place. This article is offered for informational and/or entertainment purposes only. Neither I nor Silicon Beach Properties nor eXp Realty, Inc. is responsible for the consequences of how you implement the content of this publication and nothing herein is intended to address your specific situation. Additionally, the information contained herein may be outdated (legally and/or factually) by the time you consume this content, so consult a professional licensed in your jurisdiction for advice.

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Market Trendlines This Week In The Beach Cities

What is the state of play in your target community? Is it a buyers' market? Is it a sellers' market? How strong is the trend? We're here to tell you that in the Beach Cities, the seller versus buyer market debate is a community by community analysis.

My team and I talk tons about market trends on social media. Not seeing your personal target communities covered? Custom charts and reports are always available on request. We can report on all property types, zip codes and custom drawn boundaries. Just ask!

Advertisement: 90 Days To Home Ownership

A program with a plan! A plan to get you ready to buy a home in 90 days. Checklists and actionable to do items plus an opportunity to get your questions about the process answered. Don’t have 90 days? The program is self-paced. Burn through it as fast as you need.

👉👉 More information on 90 Days To Homeownership

Coming Soon: Something Totally Innovative In Real Estate

In response to recent and impending changes in the real estate industry, we’ve got something BIG coming. We can’t tell you quite yet what is is, but it’s almost here! Can you guess? Click the button to be the first to know.

I want to know!

Do You Know About Our Office Hours?

We offer Office Hours as a low-key way to get your real estate questions answered without a lot of scheduling and commitment. Twice a week, Tracy hangs out on Zoom and is available to answer all your real estate questions. Click on siliconbeachzoom.com during the designated hours and you will land in our waiting room. Tracy will bring you in when the person ahead of you is done. Everything is private. Here are your next opportunities to join Tracy for Office Hours:

• Thursday, July 11, 2024 from 10 am to noon PT

• Sunday, July 14, 2024 from 10 am to 1 pm PT

• Thursday, July 18, 2024 from 10 am to noon PT

• Sunday, July 21, 2024 from 10 am to 1 pm PT

Alternatively, private 1:1 conversations can be scheduled here.

Find Tracy Around The Web

Let’s make sure we’re connected in the places you like to hang out. Here’s where you can find me and what I post on those platforms:

• Have We Met? Read my bio

• My YouTube Channels - TracyTalksReal & TracyTalksRealLOCAL

• My Beach Cities LA Real Estate Company - search for homes, save listings, meet the team

• Twitter - mostly housing politics commentary

• LinkedIn - real estate news & insights

• Facebook - local real estate news & insights

• Instagram - local real estate news & insights

• Digital Office Hours - I hang out and you come ask questions 😊

• Schedule a 1:1 meeting for Zoom or IRL

Find Tracy In Real Life

Here are the public events where you can find me in coming weeks. Say hi if you’re in the house.

• July 13th - Livable CA Meeting (Housing Legislative Update)

• July 16th - Neighborhood Council Planning & Land Use Committee Meeting

• July 22nd - Neighborhood Council Community Plan Update Ad Hoc Committee Meeting

Content Authenticity Statement

100% of this week’s newsletter was generated by me, Tracy Thrower Conyers. No AI here. And if I add any, I will tell you. 😊

Legal Stuff

Advertisements in this newsletter have paid to be promoted and, as a result, I receive direct financial compensation for promoting them. Sometimes I promote people, places and things strictly to show support without compensation. Ask me if you have questions.

My real estate company, Silicon Beach Properties, and I maintain partnerships and affiliate relationships with other companies. Look for asterisks** to signify such a relationship. Assume we are compensated, but that won’t always be the case.

Until Next Week…

Be well and use this link to refer others to The Trendline. Let’s grow a community!

Contact Tracy

Business Referrals

Read/Watch Episode 1

What’s On My Mind: Are Home Buyer Agents Obsolete?

The recent NAR commission lawsuits stirred up a lot of controversy, and it's no wonder given the amount of misinformation being pumped out by the mainstream media. I've personally viewed countless hours of YouTube videos from all manner of providers, including agents and real estate lawyers. I can't even count the number of hours I've spent reading comments on those videos.

And the comments on the videos by the public have been overwhelmingly negative toward agents in general. I guess I've been spoiled getting to work with mostly professional agents who fully earned their commission. But to read these comments, agents everywhere suck.

Sigh.

The craziest line of comments I read were that nobody needs an agent to buy a home anymore because everything is on the internet. Yes, people are really saying that.

Is Everything A Home Buyer Needs On The Internet?

Of course everything is there somewhere, but how is the average consumer who rarely buys a property supposed to judge the source, even if they are inclined to spend hours and hours gathering information?

Should we just assume Zillow has everything? Whether they do or not, Zillow is selling leads and therefore has an agenda that may not be aligned with consumers.

What about Redfin? Again, they have the agenda of any large broker. Their tools are more impressive than most brokers, but there is nobody in the background trying to keep the materials balanced and helpful specifically for buyers.

What about the MLS? MLSs are privately owned and they show listings, but nothing else remotely educational for buyers. They don't even have all the listings.

Maybe we should leave buyers to works with AI bots? Yeah right....

So while everything is out there someplace, the average person is not going to know what to do with the information, even if they can find it all.

What Does A Buyer Agent Even Do?

The idea that "everything" a buyer needs is on the internet really assumes that finding the house is all an agent does.

🤣🤣🤣

Oh sorry, I digress.

Finding pretty houses is really just the start of the process of buying a home.

Here is a sample list of ways agents help before finding "the one":

• advising on the pros and cons of different neighborhoods

• lending their experience and expertise as professionals constantly "in the market" to consumers who rarely buy properties

• using their experience to recommend search area expansions

• tapping their networks developed over time for listings not yet on the MLS

• connecting buyers with lenders who have a successful track record of funding loans in a variety of circumstances

• organizing showings and home tours

• providing professional feedback on the properties toured

• helping buyers evaluate properties within the parameters of their specific goals

• providing a check on the emotions that run rampant in a personal decision like buying an expensive home

This is a sample list of ways agents help after finding "the one":

• sizing up the seller and listing agent to find negotiation advantages

• pricing an offer in a way that interests the seller without overpaying

• offering experience and data to back up that price recommendation

• advising the buyer not to show excess proof of funds with the offer

• explaining the implications of multiple offers

• explaining special seller demands like leasing back the property or otherwise staying in the property past the close of escrow

• negotiating a favorable price and terms in a competitive offer scenario

• explaining various contractual contingencies and how they impact pricing and timing

• explaining the terms of the purchase contract, such as the implications of an arbitration clause

• advising the buyer on the buying process and the associated opportunities and pitfalls

• explaining closing costs

• obtaining utility bills if desired

• keeping the buyer on top of contractual deadlines

• providing data to appraisers when appraisals come in too low to close the deal

• helping the buyer negotiate escrow and troubleshooting inevitable surprises

• helping the buyer read and understand property disclosures

• helping the buyer read and understand HOA disclosures

• helping the buyer read and understand natural hazards disclosures

• helping the buyer understand title insurance and the title report provided on the property

• helping the buyer acquire property insurance in a tough insurance environment

• helping the buyer understand the various ways to hold title

• arranging inspections, generally on a tight timeframe

• helping the buyer understand the inspection reports and evaluate additional reports that might be needed

• helping the buyer negotiate repairs or other contractual modifications in light of the inspections

• helping the buyer evaluate other risks with the property (bad neighbors and barking dogs, anybody?)

• helping the buyer understand the loan process and field buyer questions about the same

• wrangling a rogue lender who isn't meeting deadlines

• facilitating the final walk through and other closing support

And those are just the items I could come up with off the cuff in writing this article.

The lists can only get longer.

According to the NAR, consumers also count on their agents to protect them from scams.

So you see, buyer agents do much more than simply open doors to pretty houses that sell themselves.

I've often thought that the buyer agent has a harder job than the listing agent, and it's been a source of personal angst knowing I've encountered listing agents taking more than half of the commission. You see, commissions spelled out in listing agreement are not public. The only public component is what the seller was offering the buyer's agent in the MLS.

And come August 17th, that won't be public anymore, either.

For a "consumer" lawsuit, the outcome is surprisingly less transparent then where we started. 😱

Will We Start Seeing More Attorneys Rather Than Agents?

One suggestion I've seen floated is that attorneys can review contracts for an hourly rate that is cheaper than paying an agent.

First, I want to know how much the attorney is charging.

Second, what about the rest of the lists I provided above? An attorney is not going to have the daily market experience an agent has when it comes to understanding the value of the property in a dynamic market, and tailoring the offer accordingly.

And then there is the whole idea of getting through escrow with all the questions and the raft of paperwork that needs to be explained. That isn't part of "reviewing a contract."

What about arranging inspectors on a 10-day inspection contingency? What about defending an offer price to the appraiser? Is that part of "reviewing a contract?"

No, I don't think this "lawyer" idea has been completely thought through by the commentators floating it. And can you imagine the tab for my lists above at $300/hour? I would say you won't save much money if any, but you will be losing important day to day experience in the real estate market.

On the other hand, you definitely can hire me - a broker and an attorney, but I’m not working hourly. I gave up timesheets for a reason. 😉

So what do you think? Are buyer agents irrelevant at this point? I want to know what you think, so please share away in the comments.

Next week I'll take a dive into the new buyer broker agreements and potential compensation arrangements.

Read/Watch Episode 3

Read/Watch Episode 4

Read/Watch Episode 5A

Read/Watch Episode 5B

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Unsubscribe?

If I missed the mark for you this week, I hope you'll give me one more shot, but if that won't work for you, here is your unsubscribe link.

Share My Work?

If you liked my column this week, please share with others so we can grow our community and have livelier, more robust conversations. Use this link to refer others. And just to make it fun, there are referral rewards. Let’s grow a community!

Market Trendlines This Week In The Beach Cities

What is the state of play in your target community? Is it a buyers' market? Is it a sellers' market? How strong is the trend? We're here to tell you that in the Beach Cities, the seller versus buyer market debate is very much a community by community analysis.

We talk tons about market trends on social media. Not seeing your personal target communities covered? Custom charts and reports are always available on request. We can report on all property types, zip codes and custom drawn boundaries. Just ask!

Advertisement: 90 Days To Home Ownership

A program with a plan! A plan to get you ready to buy a home in 90 days. Checklists and actionable to do items plus an opportunity to get your questions about the process answered. Don’t have 90 days? The program is self-paced. Burn though it as fast as you need. Gift certificates for family members available.

👉👉 More information on 90 Days To Homeownership

Coming Soon: Something Totally Innovative In Real Estate

In response to recent and impending changes in the real estate industry, we’ve got something BIG coming. We can’t tell you quite yet what is is, but it’s almost here! Can you guess? Click the button to be the first to know.

I want to know!

The RE:mix

These are a few of the stories we reported on in last week’s Sunday RE:mix. Visit your subscriber dashboard to subscribe to the Sunday RE:mix to get the stories delivered to your inbox on Sundays, nearly a week before they appear on The Trendline.

• Southern California Prices Are At A Record. Could Relief Be On The Way?

• With Prices Up, Buyers Check Out

• Home Sales Fall To Historically Low Level

• Mortgage Rates Fall Back As Data Suggests Economy Is Cooling

• Can Rates Keep Falling?

• When Will The Fed’s Moves Alleviate The Lock-In Effect"?

Anybody seeing a trend with the news? I would usually insert laughing emojis here, but the trend hardly seems funny. 🙃

Do You Know About Our Office Hours?

We offer Office Hours as a low-key way to get your real estate questions answered without a lot of scheduling and commitment. Twice a week, Tracy hangs out on Zoom and is available to answer all your real estate questions. Click on siliconbeachzoom.com during the designated hours and you will land in our waiting room. Tracy will bring you in when the person ahead of you is done. Everything is private. Here are your next opportunities to join Tracy for Office Hours:

• Sunday, June 9, 2024 from 10 am to 1 pm PT

• Thursday, June 13, 2024 from 10 am to noon PT

• Sunday, June 16, 2024 from 10 am to 1 pm PT

• Thursday, June 20, 2024 from 10 am to noon PT

Alternatively, private 1:1 conversations can be scheduled here.

Find Me Around The Web

Let’s make sure we’re connected in the places you like to hang out. Here’s where you can find me and what I post on those platforms:

• Have We Met? Read my bio

• My YouTube Channels - TracyTalksReal & TracyTalksRealLOCAL

• My Beach Cities LA Real Estate Company - search for homes, save listings, meet the team

• Twitter - mostly housing politics commentary

• LinkedIn - real estate news & insights

• Facebook - local real estate news & insights

• Instagram - local real estate news & insights

• Digital Office Hours - I hang out and you come ask questions 😊

• Schedule a 1:1 meeting for Zoom or IRL

Find Tracy In Real Life

Here are the public events where you can find me in coming weeks. Say hi if you’re in the house.

• June 18th - Westchester/Playa Neighborhood Council Planning & Land Use Committee Meeting

• June 24th - Westchester/Playa Neighborhood Council Community Plan Update Committee Meeting

👉👉 Hire Tracy Or Ask For A Referral

Content Authenticity Statement

100% of this week’s newsletter was generated by me, Tracy Thrower Conyers. No AI here. And if I add any, I will tell you. 😊

Legal Stuff

Advertisements in this newsletter have paid to be promoted and, as a result, I receive direct financial compensation for promoting them. Sometimes I promote people, places and things strictly to show support without compensation.

My real estate company, Silicon Beach Properties, and I maintain partnerships and affiliate relationships with other companies. Look for asterisks** to signify such a relationship. Assume we are compensated, but that won’t always be the case.

Until Next Week…

Be well and use this link to refer others to The Trendline. Let’s grow a community!

Contact Tracy

Business Referrals

What’s On My Mind: Real Estate Is About To Get Very Messy

Below is the trending topic on my mind this week in real estate in the Beach Cities of Los Angeles.

I'm sure by now you've seen a story someplace about the March settlement between the National Association of Realtors (NAR) and various class action lawsuits claiming industry collusion over commissions. I recorded a video about it in March that you can find here.

Although any real estate professional should be paying attention to these developments, they caught my attention in particular because I was a consumer fraud class action attorney in my first career, and I worked on big class action cases against huge companies defrauding consumers, like the attorneys who brought these commission lawsuits.

Because of my unique background and skill set, I've been watching my adopted real estate industry very closely in the 22+ years I've been involved. I have more than a few opinions about bad practices in the industry for sure. I definitely have opinions about these recent real estate lawsuits.

I think this settlement sucks for all consumers, including both buyers and sellers, and doesn't do one thing to make our industry better or transactions cheaper. No, costs are not going down as suggested by the mainstream media. They are just going into a gaping black hole, the opposite of the transparency the class action attorneys profess to want.

But enough about my opinions for today. Today’s objective is to update you on the roll out and what we know three months later.

Where We’re At Today

Since March, the class action settlement has been preliminarily approved by the court, and the government has come out threatening to swing its big hammer, despite the fact the government had its chance in another case, and settled with the NAR in that case.

These new DOJ threats are in complete contradiction to the settlement agreement reached in that other case, and open a whole other can of worms we’ll have to save for another day.

To recap the marquee points from the outcome in the case:

• Commission offers to buyer agents (a longtime staple in the industry) can no longer be shown in the MLS

• Going forward, buyers must sign representation agreements with their agents to receive services

• Said representation agreements must spell out commissions negotiated between the buyer and the agent, and put the buyer ultimately on the hook for payment

It sounds pretty simple when it can be summed up in three points, but this is a seismic shift in the industry. Buyers have historically worked more casually with agents, and agents were compensated by sellers for their services pursuant to the terms of the listing agreement and offer of compensation in the MLS.

Now, there will be no uniformly and maybe no publicly offered compensation, and buyers may find themselves having to come to the closing table with a big chunk of funds to compensate their agent.

Who Wins?

The mainstream media (and even our President 🤯) crowed the settlement will make home buying cheaper and more affordable.

In what alternate universe that happens, I’m not sure. Good agents aren’t coming to work for substandard compensation.

The more likely outcome is that buyers will skip representation or find themselves with only bottom tier agents available. In my humble opinion, this sounds like a recipe for litigation. Who wins with litigation??

As far as I can see, the only winner here is a certain plaintiffs’ attorney in Missouri who convinced his hometown jury that agents nationwide are screwing their clients.

I’m still scratching my head trying to figure out how 50 states with different practices all ended up in one certifiable class. 

What’s Next?

Sellers will still be free to offer concessions that might be used to pay buyer agent commissions, but it’s unclear whether the MLS can be used for that purpose. Certainly buyers can ask for a concession regardless of what has been offered.

But not every seller will agree it’s in their own interest to pay such a concession. Sellers have gotten very comfortable in their superior bargaining positions with our current long running sellers’ market, but real estate is cyclical. Sadly, crucial decisions are being made by judges and government lawyers who don’t know what buyers’ markets look like. 

I personally will be advising my sellers to offer buyer agent fee concessions. There are many reasons having a strong buyer agent in the mix is good for sellers, and getting sales done and staying done.

But you also have to know that there is going to be a lot of confusion by sellers, and there will be agents who will sell greed to get a listing. Add to that all the confusion on the buy side around getting their agents paid and structuring competitive offers in this new normal.

The whole landscape is going to be very chaotic for a while, and it will be extra important to have good representation. Good representation costs money.

Should Buyers Skip Representation?

Should buyers represent themselves to save the buyer agent fees?

Maybe, but only if they buy and sell frequently and know how to price an offer (especially in the new paradigm), size up the listing agent, negotiate a multiple offer scenario, schedule their own inspections (usually on a short timeline), wrangle their lender into funding on time, negotiate repairs based on inspections, and analyze and sign a whole stack of legally binding paperwork.

If all of that is in their wheelhouse, representing themselves is an option. In my 22 years in this industry, I haven’t seen many of these buyers.

Should Sellers Care Who Represents Buyers?

What sellers should care about is getting multiple buyers bidding on their property so that they end up with the best price and terms for their situation. How does the buyer’s agent impact this? Well, incentivizing an army of agents to shop your property brings more possible buyers. That’s a good thing for sellers.

Next, consider that buyers will have four options going forward to get their offers in front of sellers, and transactions closed. They’ve really always had these same options, but it was simply easier to default to an independent agent paid for by the seller.

Buyers can (1) bring a highly paid top notch agent who will make sure the transaction runs and closes smoothly; (2) bring a cheap, mediocre (or worse) agent who will either cause problems or do nothing; (3) come without an agent and slow things down because nobody is available to explain things and answer questions; or (4) use the listing agent or somebody on that agent’s team to represent their buying interests.

I’ll go into the implications of each scenario in a future article, but for today, just know that each scenario represents an increasingly higher risk of the deal unraveling or resulting later in litigation. For today, just recognize that sellers must understand and care about the new normal, and won’t likely save much money when they are not paying for top notch representation on the other side.

But wait. How come buyers haven’t always paid for their own representation?

Unfortunately, there are so very many cash outlays already required from buyers to close on a home (closing costs, loan fees, insurance, down payment, etc), leaving most buyers strapped for cash in home buying transactions.

This is exactly where the custom of sellers paying the buyer's agent came from, not because of some big conspiracy, as alleged by the class action attorneys and the government. And at the end of the day, the expense is deductible against equity gains, and sellers have a greater assurance that the deal will get done smoothly and stay done. It was a good practice, until some greedy lawyers decided it wasn’t.

When Does The New Normal Start?

I’m already seeing sellers offering discounted commissions in the MLS. All I can assume is that less ethical agents are trolling for listings, telling sellers they don’t have to pay buyer commissions anymore, without explaining the risks. In my research, the most reputable listing agents are still listing standard commissions in the MLS and it’s business as usual. 

But that all changes on August 17th when MLSs will no longer show commission offers. Buyers will have to start signing representation agreements and confront the reality that sellers may or may not pay for their agent. Buyers may also find it increasingly difficult to hire good agents to represent them. I can tell you that our buyer side business is about to undergo a radical change (to be announced soon).

So mark your calendars! You have a little over two months to lock down a deal and expect the old rules to apply. 

Schedule A Strategy Session

Next week, I’ll discuss more about the winners and the losers in the new normal.

Read/Watch Episode 2

Read/Watch Episode 3

Read/Watch Episode 4

Read/Watch Episode 5A

Read/Watch Episode 5B

Unsubscribe?

If I missed the mark for you this week, I hope you'll give me one more shot, but if that won't work for you, here is an unsubscribe link.

Share My Work?

If you liked my column this week, please share with others so we can grow our community and I can get more feedback on what people want to read. Use this link to refer others. And just to make it fun, there are referral rewards. Let’s grow a community!

Market Trendlines This Week In The Beach Cities

What is the state of play in your target community? Is it a buyers' market? Is it a sellers' market? How strong is the trend? We're here to tell you that in the Beach Cities, the seller versus buyer market debate is a community by community analysis.

We talk tons about market trends on social media. Not seeing your personal target communities covered? Custom charts and reports are always available on request. We can report on all property types, zip codes and custom drawn boundaries. Just ask!

Advertisement: 90 Days To Home Ownership

A program with a plan! A plan to get you ready to buy a home in 90 days. Checklists and actionable to do items plus an opportunity to get your questions about the process answered. Don’t have 90 days? The program is self-paced. Burn through it as fast as you need.

👉👉 More information on 90 Days To Homeownership

Coming Soon: Something Totally Innovative In Real Estate

In response to recent and impending changes in the real estate industry, we’ve got something BIG coming. We can’t tell you quite yet what is is, but it’s almost here! Can you guess? Click the button to be the first to know.

I want to know!

The RE:mix

These are a few of the stories we reported on in last week’s Sunday RE:mix. Visit your subscriber dashboard to subscribe to the Sunday RE:mix to get stories delivered to your inbox on Sundays, nearly a week before they appear The Trendline.

• Microsoft Removes Portal Data From Bing Real Estate After Outcry

• Weekly Mortgage Rates Dip, Home Price Gains Soften

• US Job Creation Exceeds Forecasts, Signals Delays In Rate Cuts

• How Much Longer Will We Have To Deal With Higher Mortgage Rates?

• The Number Of Homes For Sale Is Increasing

• Your Equity Could Make A Move Possible

Do You Know About Our Office Hours?

We offer Office Hours as a low-key way to get your real estate questions answered without a lot of scheduling and commitment. Twice a week, Tracy hangs out on Zoom and is available to answer all your real estate questions. Click on siliconbeachzoom.com during the designated hours and you will land in our waiting room. Tracy will bring you in when the person ahead of you is done. Everything is private. Here are your next opportunities to join Tracy for Office Hours:

• Thursday, June 13, 2024 from 10 am to noon PT

• Sunday, June 16, 2024 from 10 am to 1 pm PT

• Thursday, June 20, 2024 from 10 am to noon PT

• Sunday, June 23, 2024 from 10 am to 1 pm PT

Alternatively, private 1:1 conversations can be scheduled here.

Find Tracy Around The Web

Let’s make sure we’re connected in the places you like to hang out. Here’s where you can find me and what I post on those platforms:

• Have We Met? Read my bio

• My YouTube Channels - TracyTalksReal & TracyTalksRealLOCAL

• My Beach Cities LA Real Estate Company - search for homes, save listings, meet the team

• Twitter - mostly housing politics commentary

• LinkedIn - real estate news & insights

• Facebook - local real estate news & insights

• Instagram - local real estate news & insights

• Digital Office Hours - I hang out and you come ask questions 😊

• Schedule a 1:1 meeting for Zoom or IRL

Find Tracy In Real Life

Here are the public events where you can find me in coming weeks. Say hi if you’re in the house.

• June 10th - Catalysts Institute For Local Control Teleconference

• June 15th - Livable California Statewide Teleconference

• June 18th - Westchester/Playa Neighborhood Council Planning & Land Use Committee Meeting

• June 24th - Westchester/Playa Neighborhood Council Community Plan Update Committee Meeting

Legal Stuff

Advertisements in this newsletter have paid to be promoted and, as a result, I receive direct financial compensation for promoting them. Sometimes I promote people, places and things strictly to show support without compensation. Ask me if you have questions.

My real estate company, Silicon Beach Properties, and I maintain partnerships and affiliate relationships with other companies. Look for asterisks** to signify such a relationship. Assume we are compensated, but that won’t always be the case.

Content Authenticity Statement

100% of this week’s newsletter was generated by me, Tracy Thrower Conyers. No AI here. And if I add any, I will tell you. 😊

Thanks for reading Tracy Talks Real! Subscribe for free to receive new posts and support my work.

Until Next Week…

Be well and use this link to refer others to The Trendline. Let’s grow a community!

Contact Tracy

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First, it’s important to understand that the condition of your home can impact its sale price. If your home is in need of repairs or updates, it may be worth investing some money into fixing it up. This can include anything from a fresh coat of paint to a kitchen renovation. By making these improvements, you can increase the value of your home and attract more potential buyers.

Next, it’s important to price your home appropriately. This means doing your research and finding out what similar homes in your area are selling for. You don’t want to price your home too high, as this can turn off potential buyers. On the other hand, pricing your home too low can result in leaving money on the table. A real estate agent can help you determine the best price for your home.

Marketing your home is also key to getting top dollar. This includes listing your home on multiple platforms, such as the MLS and social media, as well as hosting open houses. You want to make sure your home is visible to as many potential buyers as possible. Additionally, staging your home can help buyers visualize themselves living there, which can increase their interest and offer amounts.

Lastly, it’s important to work with a skilled real estate agent who has experience selling homes in your area. They can provide valuable insights and guidance throughout the selling process, from pricing to negotiating offers. A good agent will work tirelessly to ensure you get the best terms possible.

In summary, selling your home for top dollar requires a combination of factors, including the condition of your home, pricing it appropriately, marketing it effectively, and working with a skilled real estate agent. By following these tips, you can increase your chances of getting the most money and best terms possible for your home.

By Staff

Silicon Beach Properties is a group of geo-focused real estate experts and go getters fixated on successful outcomes for our clients buying and selling real estate in the beach cities of LA. We focus on client goals, not sales goals, allowing us to be nimble, accountable and collaborative. Learn more about hiring our team for your Seller Edge.

What?? Not everybody is an animal lover? Who are those people?

They do exist and you don’t want to lose any potential buyers, so here’s your game plan.

First, make plans to have your animals off-premises for all showings. I’ve toured plenty of properties where the animal is in the garage or in a crate or something similar. It’s a distraction and that’s coming from an animal lover. Don’t do it.

Have a plan for someplace your pet(s) can go during a showing. Lean on your agent to prescreen buyers to minimize showings for unqualified or less than serious buyers, or consider limiting showings to open house blocks of time. Remember, though, that limiting showings might limit buyers, so carefully weigh all the pros and cons.

Second, stash dog beds, litter boxes and other supplies before showings. No need to cue anybody to look for signs of animals to offend themselves.

Third, keep your house free from animal smells and dander that might impact sensitive buyers. Run the vacuum cleaner, wipe down surfaces, etc. Any buyer with serious allergies should be making inquiries ahead of time. Our goal here is to simply avoid raising red flags for animal averse-buyers.

Fourth, repair damage done by your animal(s). We raised a puppy at my house. I know a thing or two about what an energetic pup can do to walls, cabinets and furniture.

Are you thinking about listing with pets? I am very pet-friendly and I speak “pet” fluently with four cats and a dog at home. Let me help you get ready to sell. Ask me for my Seller’s Checklist.

This post is from our “Seller Edge” series, content designed to give home sellers in the Beach Cities of LA an edge in a competitive residential real estate market. Read more about our full Seller Edge program on our website. Want help selling a home in Silicon Beach? Contact us or grab time on our calendar. Need help beyond Silicon Beach? Reach out and let us help you find a high-caliber agent with hyperlocal expertise in your area. 

By Tracy Thrower Conyers

Tracy is a realtor specializing in Silicon Beach, with a hyper-emphasis on Westchester & the Playas. She is a past practicing attorney & proptech founder. Tracy is an early adopter of all things digital and 22-year real estate industry vet. She's been quoted on topics of Silicon Beach real estate by trusted media outlets including the Los Angeles Times, KCET and The Argonaut.

Some buyers think it’s a good idea to use the listing agent to write their offer. They might think they’ll get a better deal or they simply don’t understand the concept and availability of an independent buyer representative.

Picture this. You don’t yet have a formal relationship with a buyer agent and you walk into an open house and fall in love with the property. The hosting agent walks up and starts talking to you about buying the property. “Don’t have an agent yet?” he asks. “I can help you and you’ll be better off if I submit for you because I have the inside track.”

Think about it. How many times has he already said that to a prospective buyer that day and how more will come after you?

Yes, the agent is either the listing agent or has a relationship with the listing agent. Is this a good thing? If this person is the listing agent, he has an existing legal relationship with the seller and owes the seller duties of loyalty. Legally he will owe you the same if he acts as your representative. How can one person really his very, very best for two competing sides?

What if the open house host isn’t the listing agent, but instead is a member of that person’s team?

Generally, junior agents host open houses. Do you really believe a junior agent is going to aggressively stand up for you if the listing agent has a competing buyer or wants something for the seller? Does a junior agent have a ninja bag of tricks to make your offer stand out? What if that same agent picks up three buyers from that open house? Where do you think you’ll stack up then?

When one agent or one team or one brokerage handles both the buyer and seller in a transaction, it’s known as “dual agency.” “One agent” in the legal definition of the word, serves two unrelated parties. That’s a tricky tightrope most agents are not equipped to walk.

And what about when the listing agent who agreed to write your offer has done the same for other buyers? You’ll never know why you didn’t get the property or what could have been done to get you the property. Maybe that agent won’t even remember you in his sea of buyers when the property falls out of escrow and needs another buyer.

No, dual agency is rarely a benefit for buyers, the latecomer to the equation. The agent who tells you you’ll have a “in” if you let him/her/them write your offer is undoubtedly saying the same to others. Don’t fall for it.

Why am I so down on dual agency when I could be out there “double-ending” commissions like most of my colleagues? Undoubtedly my strong opinions come from my first career as a consumer fraud attorney. There are just too many ways for both clients, but mostly the buyer, to get screwed by dual agency, and it’s just not going to happen on my watch.

Whether agents are lazy, ill-informed or just uneducated on how to properly conduct competing relationships fairly, there are just too many risks for buyers, especially in the current crazy competitive environment.

At Silicon Beach Properties, we rarely use dual agency and if we do, we are super clear to all parties about what is happening and how it might impact them. We promise our buyer clients with whom we have contractual relationships that we will not represent more than one buyer competing for a property.

In short, we’re here for you and you alone. And we have a pretty impressive bag of Ninja tricks to help you get that property you have your heart set on. Work with us and just so NO to dual agency. And if we’re the listing agent? We’ll hook you up with an awesome buyer agent who is not on our team.

This is a whole other blog post, but recent developments in my industry are pushing consumers unwittingly in the direction of dual agency. It’s a sad moment and I hope we get the ship righted soon. In the meantime, just say no!

SHOP HOMES FOR SALE IN THE BEACH CITIES

This post is from our “Buyer Edge” series, content designed to give real estate buyers in the Beach Cities of LA an edge in a competitive residential real estate market. Read more about our full Buyer Edge program on our website. Want help buying real estate in Silicon Beach? Contact us or grab time on our calendar. Need help beyond Silicon Beach? Reach out and let us help you find a high-caliber agent with hyperlocal expertise in that area. 

Except I’m an overachiever and added five bonus hacks. Your opportunities await!

Before we launch in, let’s just take a minute to talk about rates and why they fluctuate.

Mortgage loans, like any other loan, are loans made and priced based on perceived risks. The lender needs a certain comfort level that the lender will get a fair return on its money over the course of the loan. Fun fact! 30-year rates aren’t really priced on 30-year time horizons. They are priced on the statistically average time borrowers own their properties.

OK, that’s a slight digression, but as you consider each of the hacks below, keep in mind that lenders will be weighing risks related to you personally, the housing market, our domestic economy and the global economy. Whew! It’s not easy being a lender.

With that lens in mind, here are 4+5 ideas for helping you combat our current high rates.

1. Adjustable Rate Mortgages

ARMs got such a bad rap during the Great Recession in 2008. People embraced them for their lower rates but didn’t understand them and got stung when rates bumped up. Personally, I’m a fan, but you absolutely need to understand what you’re getting into.

As I wrote previously on this blog, my husband and I had an ARM 20 years ago and I randomly found the note and read the terms. Our particular ARM was a 10-year ARM and our rate was fixed for that period. That is, we got all the benefits of the lower rate FIXED for 10 years.

Even when rates were set to adjust, they would adjust by a contractually agreed upon rate, and I was pleasantly surprised to see that the bumps were relatively manageable. More importantly, we could plan our family finances based on the loan contract.

Did our rates go up? We didn’t stick around that long. When rates improved, we refinanced into better terms.

Will you be able to refinance into better terms? There are no promises, but historically, our economy and mortgage rates have been cyclical. If you’re paying attention, you will likely find opportunities to finance out of the loan. Your worst case scenario is periodic bumps you can plan for and/or you can sell the property.

By the way, your adjustable rate can go down, too.

Because you, the borrower, are taking some of the future risk off the lender, ARMs are usually priced lower (and sometimes significantly lower) than fixed rate mortgages, making this a nice hack.

2. Rate Buy Downs

Some lenders will let you buy down the rate by paying points. This means you pay some amount of money upfront to lower your rate over the life of your loan. Each point costs 1% of your mortgage amount and typically lowers the rate by .25% for the life of the loan. Please note that lenders vary on the exact mechanics, so ask lots of questions

Whether this strategy is right for you depends on how long you plan to own the property. It’s all a mathematical calculation and your lender can help you run the numbers. Or maybe it’s not a mathematical calculation. Maybe you just need lower rates for some period of time and it makes sense to trade off a few dollars at the front end, even if you only have a five year ownership plan.

Or, ask me about five year plans. My family is enjoying its 20th year in our five-year home.

Pro tip! Sellers can pay your points if they want to do that rather than take a price cut. Not every seller will understand this strategy or see the benefit to them. This strategy requires a skilled agent to negotiate on your behalf.

3. Loans From Friends & Family

This strategy offers lots of opportunity for creativity. What you need for this hack is anybody who wants to earn more money with you than they will earn from a CD or savings account. As long as the rate you pay them is more than they can otherwise receive someplace else, and is lower than mortgage rates you would otherwise pay, this is financial win-win for all.

Keep in mind that best practices dictate you both sign a written agreement laying out your express expectations and remedies if the other fails to keep their end of the bargain.

A loan like this could be deployed in a number of ways, including buying points to reduce your rate and monthly payment, a bigger down payment so you can take a smaller loan, and/or replacing your mortgage lender altogether.

4. Buy A Smaller House

This might be my favorite option of all four. This option contemplates buying a smaller house on a bigger lot to expand later. You aren’t exactly hacking your rate, but you are taking on a smaller loan than you might otherwise have been planning.

Why is this my favorite right now? It’s an investment in locking down a future opportunity to add on to your home and it’s a unique opportunity at this exact moment in time.

Generally you would be competing against developers for these smaller houses, but guess what? They are having their own financing challenges right now.

Right this minute is a unique opportunity to pick up one of these little house with less competition, but this is a limited time opportunity until other end-users like yourself see the opportunity and developers come back into the market.

And another benefit to this approach is that if you never seem to get around to adding on, down the road you can upsize into another property and hold this one as a rental. Look at you, land baron!

Bonus Hacks

Buy a duplex with another buyer in partnership with a right to buy each other out under certain circumstances. You are literally buying half a property at half the price. This is a great starter strategy.

Buy a property with an ADU and add a tenant. Single family homes appreciate faster than condos and duplexes in our beach cities. With the right lot size, you can add an ADU that is pretty big and get a tidy rent for the unit. If you need to build, the city of LA has multiple pre-approved plans that expedite permitting. California state law is also currently very ADU-friendly. This is also a great alternative for families with grown children or aging parents.

Take a roommate. You finally grew up and thought you were done with roommates, right? Why not suck up for a time and bring somebody in to help pay the mortgage?

Seller financing. This is an idea we haven’t seen here in the beach cities in the 11 years I’ve been selling real estate, but I remember it being a thing in the 80’s. According to a client I spoke with recently, it still happens in Florida. I’m no expert on tax law, but I do wonder if partial financing might be a way to defer some tax pain on the seller’s capital gains. This strategy needs more research, but is an option that deserves a place on this list. You never know, in any event, if there might be a reason a seller doesn’t want or need all the cash from the sale right now.

Take a shorter loan. Your today payments will be higher, but your interest expense over the life of the loan could be lower versus a 30-year loan that you keep for 30 years.

Where To Start

All of these hacks start with a lender to crunch numbers with you. Not until you find out what your mortgage starting point looks like will you be able to start evaluating potential hacks and opportunities. Equally important is to sign on with a buyer-focused agent who is creative and understands your options. I just happen to know the right people in both categories.

So where do you want to start? How about scheduling some no obligation time on my calendar to strategize? Find my calendar at this link and pick a time that works for you.

Inventory continues to be tight with sellers not wanting to give up their low rate mortgages. Slowly more listings are coming on the market, but with so much demand, they are getting snapped up pretty fast. So what is a ready to go buyer to do?

First, make sure we know you’re ready to go. Many of our clients begin shopping long before they are ready to start making offers, so we never assume people are ready to go just because they’ve landed in our database.

If you are in the “ready to go now” group, make sure we know about it. We want to be turning over every rock for you. Text the word ALERTS to 424.228.9969 and let’s confirm we’re on the same page about what you need and when you need it.

So where are some of the places we dig for properties beyond the MLS? Here are a couple of our personal favorites.

1. Properties Not Yet For Sale
When we know exactly what a client is looking for, we can start digging into properties not yet for sale. These might be pre-foreclosure properties. These might be pre-divorce properties. These might be “thinking about selling” properties. We identify these properties through ninja database tricks, professional relationships and other web resources. Have I mentioned one of my jobs early in my career was as a federal investigator? I love a good search challenge.

2. Badly Marketed Properties
A surprising number of people list with their cousin from Orange County and then don’t understand why their property is languishing on the market, even with big buyer demand. Even worse when they let that cousin use his or her cell phone to take the listing photos. This strategy involves more ninja search tricks. These properties are in the MLS database, but may require a few ninja tricks to find or our expert eyes to show you why the property is really a gem.

3. Seller Ads
We run paid advertising asking for specific properties. Some sellers don’t want to hassle with listing, but will respond to a social media ad or USPS postcard offering to match a specific existing buyer with their property. We are happy to run these campaigns for our clients.*

So, as you can see, we have a few tricks up our sleeves here, but we can’t launch these on your behalf if we don’t know exactly what you need. Ready to become a Preferred Buyer Client? Text the word CLIENT to 424.228.9969 to get started.

SEE THIS WEEK’S OPEN LISTINGS IN SILICON BEACH

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* Clients are real estate buyers with signed representation agreements.

Let’s take a look at each core component.

1. Picking The Right Team

Picking Your Agent

All agents are not created equal! In fact, the barrier to entry in CA is surprisingly low.

At #teamedge, we are lifelong learners who constantly hone our skills and knowledge to make us better agentsr our clients.

This matters in the fast moving world of real estate.

Some buyers think they’ll get the property only if they let the listing agent write their offer.

But think about this. The seller wants a higher price and you want a lower price. The seller wants to sell as is. You want a credit for the old roof.

What could possibly go wrong?

Plenty.

You need a person at the negotiating table focused on making the deal work for you.

Get yourself independent representation. You deserve it.

Picking Your Lender

If you are using a mortgage to buy your property, your mortgage lender will be an important part of your team.

Sellers in the beach cities like short escrows. You’ll need a lender who can proactively get things done for you.

We have several great lenders on speed dial. Ask us for names.

2. Understanding Your Real Deal Breakers

Real estate moves fast. Most buyers tend to find the same properties appealing. You have to be ready to move fast when you find “the one” because others will like the same “one.”

Sometimes, for any number of reasons, you may have to compromise on the property you go after.

Either way, you need to prepared to make quick decisions. Do your homework before you start looking at properties and make a list of your must haves to refer to when emotions start running hot.

3. Making A Successful Offer

We feel strongly that successful offers are comprised of 3 components:

• truly understanding what the seller wants (hint: it’s not always the highest price)

• understanding market conditions

• writing clean offers that scream “this buyer and agent are easy to work with”

What will move the needle for the seller?

Something is motivating the seller to sell and it’s not always about money.

We work hard to uncover that information on our buyers’ behalf to craft an offer with the highest appeal of the bunch.

You’d be surprised how many buyer agents assume they know what the seller wants. We ask.

Market conditions matter

In a buyers’ market, buyers have an edge in negotiations over sellers. Here’s hoping….

In a sellers’ market, sellers have the edge.

As your buyer’s representative, we can help you achieve success in either scenario.

The key is understanding the context/trendline and focusing on the components you can leverage under the circumstances.

Recently, it’s been very trendy for agents to make videos talking about market conditions. We recognized early on (as in eight years ago) how important the trendline is. Good to see everybody else catching up.

In fact, you’ll see us share a lot of trendline information. We’re more than a little obsessed.

You’ll appreciate that about us before we’re done.

Check out our blog Get The Trendline.

Clean offers matter, too

At the end of the day, the seller wants escrow to close, period.

A clean offer with all the i’s dotted and t’s crossed tells the seller and seller’s agent that we’re organized and likely to get the deal done.

4. Ninja Level Negotiation Skills

At this point in the process, you’ve made the offer, but there is still so much negotiating to do!

There will likely be counter offers and there will likely be repairs to negotiate in escrow.

You’ll want a strong negotiator in your corner.

Tracy was a high stakes litigator in her first career. She learned a few things about negotiations. She makes this skill a priority for the whole team.

We’re tough when needed. We’re not bullies, but we are definitely always scouting advantages for our clients.

5. Successfully Navigating Escrow

Escrow is not for the faint of heart!

There are important inspections to schedule on tight timeframes, reports have to be evaluated and repair requests need to be considered and negotiated.

All of this can be tricky.

And the disclosures! Yikes. This is California, baby. Eeverybody is covering their tushies to make sure they don’t have to see you later in court.

Having an agent who first understands the disclosures, and then can explain them will be very helpful.

Did we mention Tracy, our team leader, was an attorney in her first career?

She understands the disclosures. And she’s pretty good at explaining them, too.

Making sure you understand them is a priority for us.

5 steps! Easy peasy

We hope you found this 10,000 foot level buying guide to be helpful.

For more information on the home buying process in the beach cities, don’t miss Tracy’s 40-minute master class video. Find it at realestatebuyermasterclass.com.

In conclusion….

There are no guarantees we can get you a certain property at a certain price or on certain terms, but knowing the in’s and out’s of the process and where you can exert the most influence will certainly help.

www.realestatebuyermasterclass.com

About #teamedge

#teamedge, led by Tracy Thrower Conyers, is a team of geo-focused real estate experts and go getters fixated on successful outcomes for our clients via superior market knowledge combined with technology. Looking for an unfair edge in real estate. Let’s go!

Kind words from our buyers

Tracy really listened to what we told her we needed in a home. She found us the perfect home in a great school district and negotiated a deal that worked for us. I’m a lawyer and was very comfortable with how Tracy negotiated on our behalf. We’re very happy with the outcome and our two boys can’t wait to sleep in their new bedrooms.

– Jonathan K.

I was a single woman who wanted to buy my first home. I didn’t know where to start. Tracy worked with me to find an adorable little house that fit my budget and fit my long list of wants and needs. I highly recommend Tracy for anybody who wants an agent who listens and does what she says she’ll do.

– Ellen Q.

My wife and I were losing our long term rental and knew it was time to move our family to our own home. Tracy really listened to what we need and what we thought we wanted. We couldn’t afford the exact neighborhood we wanted, but Tracy introduced us to nearby neighbor-hoods that fit our budget and we found the perfect home for our family.

– John L.

My wife’s grandfather was going to help us buy our first home and he found Tracy through a referral. I was super impressed with how well she worked with all the generations involved in our purchase. She didn’t hesitate when I asked if my real estate agent mother from another state could be involved.

– Steven M.

I was introduced to Tracy by a passing acquaintance who knew I wanted to buy rental properties for my kids. I explained my objectives and Tracy found me properties that were perfect as rentals that will always be in high demand. She also helped put tenants in both properties. Her keen eye for business and local market knowledge was a huge advantage in the process.

– Ron P.

Tracy sold my home in Santa Monica when I retired and she helped me find an agent in my next community. As life goes, I wanted to buy a small condo in LA as a second home a couple years later and I called Tracy to help. I had an idea I wanted to be near lightrail and Tracy introduced me to some really interesting ideas, including a couple of historic buildings in DTLA. At every step, she told me the advantages and disadvantages and I’m very happy with the unit I ended up purchasing.

– Helene R.

We met Tracy when we were long distance shopping for a second home in Venice. We had very specific ideas about what we wanted and Tracy worked tirelessly with us over a long period of time while we searched for “the one.” My wife and I have very different style preferences. We ended up closing on a beautiful home that was the perfect compromise between our styles. Tracy helped us understand every step in escrow and we felt very comfortable with the process, even though we were almost 3000 miles away. After closing, she met us late at night with the keys and we were ecstatic. Her local market knowledge and practical advice were invaluable to us.

– Joseph J.

Ready to get started?

Contact team edge now

This post is from our “Buyer Edge” series, content designed to give real estate buyers in Silicon Beach an edge in a competitive residential real estate market. Read more about our full Buyer Edge program on our website. Want help buying real estate in Silicon Beach? Contact us, grab time on our calendar or read more Buyer Edge articles. Need help beyond Silicon Beach? Reach out and let us help you find a high-caliber agent with hyperlocal expertise in that area. 

1. Let's Talk Strategy!

We are all about your successful outcome, but first we need to know how you define success. Come tell us what your goals and challenges are so we can help define the right path. Grab time on our calendar here.

2. Button Up With A Lender

If you need a loan to buy your Silicon Beach property, we can’t start making offers until we have you pre-qualified with a lender. Not all lenders are created equal. Depending on what your goals and needs are, we will make suggestions about what to look for in your Silicon Beach lender.

PRO TIP #1: some lenders are really good with short escrows and can make you almost as competitive as a cash buyer. Some lenders have attractive programs with smaller down payment requirements. If you already have a lender relationship for your Silicon Beach property purchase, we’ll talk to you about how they can support your objectives.

PRO TIP #2: Getting prequalified with a lender will crystallize how much you can afford to spend. You might think you know, but lenders are experts and analyze incomes daily.

Don’t worry if you don’t yet have a lender relationship! We know lots and are happy to make introductions.

3. Start Shopping

We will start sending you listings that support the objectives we talked about in our first meeting. We will collaborate to identify properties that meet your needs, and along the way, we will tweak your criteria as needed.

For instance, if we're not finding enough properties in your target neighborhood, we'll make suggestions for similar neighborhoods, based on what you've told us is important to you.

We will also be busy uncovering hidden inventory for your consideration.

4. Tour Properties

We love introducing clients to the varied beach cities communities - Santa Monica, Venice, Marina del Rey, Playa del Rey, Playa Vista, El Segundo and Manhattan Beach, as well as the commutable adjacent communities of Culver City, Mar Vista, Westchester, Inglewood and NW Hawthorne.

We’ll set up tours at your convenience, or we will preview properties for you and report back at your request. If you’re not local or it works better for your busy schedule, let us take you on a Facetime tour!

5. Get Your Offer Accepted

Lots goes into picking the right property and coming up with the right offer price and we'll be there to guide you every step of the way.

6. Escrow In The Beach Cities

Once your offer gets accepted, escrow opens and the paperwork starts to fly! It’s also time to get the property appraised and inspected. Your lender will hire the appraiser, but I or another team member will meet the appraiser at the property and will not hesitate to produce better comps and other evidence of value if the appraisal comes back too low.

A physical inspection of the property is very important, too. A good general inspector will come out right away and produce a report in a day or two that lets you know whether you need additional specialty reports, such as for wood destroying pests, foundation, soils or chimneys, to name a few.

Depending on what your inspection reports turn up, asking the seller for a credit to remediate an issue might be in order. We will explain the in’s and out’s of various strategies and negotiate the most beneficial outcome for you possible.

Don't forget to inspect HOA documents and talk to an insurance agent to make sure your homeowners premium will not be a deal breaker.

Once your contingencies expire, you can't walk away and expect to keep your 3% deposit you wired into escrow when it opened. This is why we move into overdrive once escrow opens to make sure you're putting each of your contingencies to their highest and best use.

6. Congratulations Homeowner!!

Once all the details of escrow are resolved (and there are lots!), it’s time to get your keys and meet your new home. We will have toured the property with you just prior to the close of escrow, but once it’s yours, you’ll look at it with new eyes. You need to get utilities set up and we highly recommend changing the locks.

7. Your First Dinner Party

The boxes are unpacked and the furniture is arranged. It’s time to have your friends and family over to toast your new Silicon Beach home. Just let us know when to send the champagne! 🥂🍾

Looking at that chart, you might think Westchester prices were in a free fall. Certainly if you watch any kind of mainstream national news, your conclusion would have been validated. But consider the same data on a 12-month rolling average:

Does that second chart read like a free fall? How does one even reconcile such seemingly different stories? My take is that even though we’ve seen a lot of downward pressure on prices since June, we haven’t given back all of our twelve month gains.

So Tracy, how do you know we won’t? Maybe we don’t know how the story ends.

My response to you is that second graph above goes back five years and it’s pretty darned consistent.

I can also look at data all the way back to 2008:

Although we had a bit of a bumpy road following the Great Recession of 2008 (and don’t forget that recession was caused by real estate fraud), the story since then has been nothing but full steam ahead and up for the last 10 years.

Venice and Manhattan Beach each show a pull back on their 12 month rolling average price charts, but these drops are on the order of 2.5% to 3%, and certainly don’t constitute any kind of free fall.

Click on any of the graphs to open dynamic charts. You can read the price for each month and the charts will update over time.

Whether you’re buying or selling real estate in our beach cities right now, we are not experiencing any kind of fire sale, despite what the national media says. They like to compare periods that make for the most dramatic headline, not make sure you get the full story to make good investment decisions. For that you need your hyperlocal real estate expert.

Each community has its trendline and it’s important to understand what that trendline is as you consider buying or selling real estate in any of our beach communities. Work with an agent who understands the trends.

Any way you slice it, prices in our beach cities are not in any kind of free fall, and are not likely to find themselves that way any time soon. We’ve lived through unprecedented times in the last three years and crazy things happened in real estate. If we have to give back some of the crazy gains since early 2020, so what?

Who really thought 30-40% price gains were going to be sustainable?. We are feeling out our new post-global pandemic normal, but there is no reason to think we won’t get back to our pre-COVID pattern on consistently rising prices, even if at a more tempered speed.

Are you screwed if you bought in the last three years? Over time that price chart just keeps marching upward. They aren’t making any more land in the beach cities. Hopefully you can sit tight for five years and enjoy a gain.

Or if you’re like my family, your five-year home becomes your 20-year home because you never got around to moving and you see a dramatic amount of appreciation.

Either way, I’m rooting for you!

Who wants to talk about the trendline in their target community? Grab a time you like on my calendar at this link, and let’s chat. You can also drop into my zoom office hours on Thursdays and Sundays to ask questions. More information about digital office hours at this link.

Happy Weekend! 

The monthly MLS data dropped a couple days ago and I noticed an interesting phenomenon with one of our beach cities. Although prices have been dropping in recent months, the rolling 12-month average continues to show a steady march upward in prices. That is hardly the home price free fall the national media would have you think we're experiencing.

I take a deeper dive into pricing trends in our beach cities in my latest blog post on the Silicon Beach Insider Report.

Do you want to talk about the pricing trends in your target community? Grab time on my calendar or drop in on my digital office hours. Use this link to schedule or this link for more information about drop in digital office hours. 😎

In fact, you might even be reading this email during my Sunday office hours (10 am to 1 pm pacific time). Jump in right now and ask me your hardest questions - www.SBPofficehours.com. 

Rooting for you!
Tracy & Team Silicon Beach

Local Trendlines

We've got the newest charts! Text the word TRENDLINE to 424.228.9969 to start a conversation or to request a custom trendline for any community, zip code or neighborhood. There are lots of ways to slice and dice the data.

You'll hear us talk a lot about trendlines. Why do we make a big deal about them? If the trend favors sellers, it's one negotiation strategy for buyers, and if the trend favors buyers, it's another. We regularly report on Venice, Westchester and Manhattan Beach, but are happy to accommodate requests for custom reports. Read more on GetTheTrendline.com.
 

Want a trendline report for another neighborhood or property type? Text the word TRENDLINE to 424.228.9969 and we'll get you fixed up. 
 

Real Estate Buyer News This Week

Here are links to a couple of news items we saw this week that might interest you as a property buyer in Silicon Beach:

• Headlines Terrify

• Protect Your Privacy When You Buy

• 3 Reasons To Buy Real Estate Right Now

• An Interest Rate Snapshot

• Planning Your Buyer Closing Costs

Some Fun Stuff

Here are a couple of links to lifestyle events and information to help you get to know our community better:

• CicLAvia - South LA

• Rooftop Cinema

• Christmas On The Farm (roadtrip!)

• Upcoming Hanukkah Celebrations

• LA Comic Con

Have a great week!
Tracy & Team Silicon Beach Properties

P.S. Do you know somebody else who wants to buy real estate? Please forward this 💯 buyer-focused newsletter. ❤❤

P.P.S. Listings information presented below is customizable on request. Interested in sold listings, for example, but not the for the city shown? Text the word HEY to 424-228-9969 and we'll get you what you need.
 

5 Things You Gotta Do In Santa Monica

Happy Weekend! 

Despite what you might be hearing in the mainstream news, buyers are buying and deals are happening. Congrats to our buyers on snagging a beautiful retreat property in Venice. If you're one of our clients from outside the area and you're shopping in the $5M+ range, I want to make sure you are aware of Measure ULA.

Dubbed the "Mansion Tax," this measure from our most recent election adds a hefty transfer fee to property sales over $5M. I don't know if they've "called it" yet, but the yes vote is currently leading 57.25% to 42.75%. This measure will undoubtedly pass and become law in January, affecting sales starting in April. 

This transfer fee will impact sales. Sellers won't sell (less inventory for buyers to buy) or they'll try to negotiate to pass the fee to buyers. This measure presents an extra incentive for sellers to sell and close prior to April, so if $5M+ is your buying price range, Measure M is a lot of reason to buckle down and focus on your search right now.     

No matter what your price point is, there are a lot of reasons to be shopping right now. If you're ready to strategize your purchase, schedule time on my calendar or drop in on my digital office hours. Use this link to schedule or this link for more information about drop in digital office hours. 😎👊  

Rooting for you!
Tracy & Team Silicon Beach

Local Trendlines

The latest MLS data dropped recently and the stories are all starting to look similar - prices down, inventory up. See a couple of the charts below. All of this is discussed in our recent buyer blog post. Text the word TRENDLINE to 424.228.9969 to start a conversation or to request a custom trendline for any community, zip code or neighborhood. There are lots of ways to slice and dice the data.

You'll hear us talk a lot about trendlines. Why do we make a big deal about them? If the trend favors sellers, it's one negotiation strategy for buyers, and if the trend favors buyers, it's another. We regularly report on Venice, Westchester and Manhattan Beach, but are happy to accommodate requests for custom reports. Read more on GetTheTrendline.com.
 

Want a trendline report for another neighborhood or property type? Text the word TRENDLINE to 424.228.9969 and we'll get you fixed up. 
 

Real Estate Buyer News This Week

Here are links to a couple of news items we saw this week that might interest you as a property buyer in Silicon Beach:

• 7 Reasons To Be Thankful For This Crazy Housing Market

• Home Prices Not Expected To Decline Dramatically

• Right Priced Homes Are Still Snapped Up Quickly

• Who Are You Taking Your Real Estate Advice From?

• The Data You Need To Make Offers

• Lender Tracie Schmidt Explains Rate Buydowns

• Listings Are Starting To Mention Seller Financed Rate Buydowns

Some Fun Stuff

Here are a couple of links to lifestyle events and information to help you get to know our community better:

• LA Auto Show

• LA Zoo Lights

• Ice Skate In Santa Monica

• Lightscape At The Arboretum

• Venice Winter Fest

• Apres-Ski Dining Experience In The City Anybody?

Have a great week!
Tracy & Team Silicon Beach Properties

P.S. Do you know somebody else who wants to buy real estate? Please forward this 💯 buyer-focused newsletter. ❤❤

P.P.S. Listings information presented below is customizable on request. Interested in sold listings, for example, but not the for the city shown? Text the word HEY to 424-228-9969 and we'll get you what you need.
 

Trending in the right.

Happy Weekend! 

Are you ready for another blast of optimism in the recent sea of bad real estate news? The CPI numbers came in much lower than expected and the markets are responding positively, including mortgage rates, which pulled back a half percent. 😍💪 

So I'm back to pounding on my "buy now" message. If you wait until the news is even better, you'll have lots of company bidding against you. Right now is your early mover advantage. 

I know you're thinking about it because I've seen the uptick in interest and traffic to our website. What I'm not seeing is an uptick in people calling to strategize. Why not? This is your moment and you need to be taking steps to get ready.

Start by catching up on my recent blog posts outlining exactly why this is your light bulb moment. ⚡💰

If you're ready to strategize your purchase, schedule time on my calendar or drop in on my digital office hours. Use this link to schedule or this link for more information about drop in digital office hours. 😎👊  

Rooting for you!
Tracy & Team Silicon Beach

Local Trendlines

The latest MLS data dropped last week and the stories are all starting to look similar - prices down, inventory up. See a couple of the charts below. All of this is discussed in last week's buyer blog post. Text the word TRENDLINE to 424.228.9969 to start a conversation or to request a custom trendline for any community, zip code or neighborhood. There are lots of ways to slice and dice the data.

You'll hear us talk a lot about trendlines. Why do we make a big deal about them? If the trend favors sellers, it's one negotiation strategy for buyers, and if the trend favors buyers, it's another. We regularly report on Venice, Westchester and Manhattan Beach, but are happy to accommodate requests for custom reports. Read more on GetTheTrendline.com.
 

Want a trendline report for another neighborhood or property type? Text the word TRENDLINE to 424.228.9969 and we'll get you fixed up. 
 

Real Estate Buyer News This Week

Here are links to a couple of news items we saw this week that might interest you as a property buyer in Silicon Beach:

• The Data You Need To Make Offers

• Is Kentwood On Your Buyer Radar?

• What's Ahead For Mortgage Rates & Home Prices?

• Lender Tracie Schmidt Explains Rate Buydowns

• Is Investing In Real Estate A Terrible Idea Right Now?

• Real Estate Apocalypse?

• Listings Are Starting To Mention Seller Financed Rate Buydowns

Some Fun Stuff

Here are a couple of links to lifestyle events and information to help you get to know our community better:

• Inglewood Open Studios Art Walk

• Vulture Festival

• Making Memories Festival

• 20 Classic Restaurants Every Angeleno Needs To Try

• Casual Breakfast Joints

• GIve Me Some Cozy Ramen Please

Have a great week!
Tracy & Team Silicon Beach Properties

P.S. Do you know somebody else who wants to buy real estate? Please forward this 💯 buyer-focused newsletter. ❤❤

P.P.S. Listings information presented below is customizable on request. Interested in sold listings, for example, but not the for the city shown? Text the word HEY to 424-228-9969 and we'll get you what you need.
 

Trending in the rightction....

Happy Weekend! 

Are you ready for a blast of optimism in a sea of bad real estate news? Rates are up again and real estate agents are taking to youtube to tell you the sky is falling. But not me! I'm here to talk to you again about the advantages of buying right now.

Is this theme sounding familiar? This is my third week chiming in with the "buy now" message. I know there are people who understand the advantages because I'm seeing a big uptick in buyer inquiries. Still not convinced? Read this week's blog post and let me know if I've changed your mind.

If I haven't changed your mind, tell me that too, because I'm going to demand a refund on my law school tuition because my advocacy skills aren't what they should be.

All kidding aside, everything I write is researched and backed by untold hours every week educating myself on the economy and our local real estate trends. Have a read and tell me if I'm getting it right.

If you're ready to strategize your purchase, schedule time on my calendar or drop in on my digital office hours. Use this link to schedule or this link for more information about drop in digital office hours. 😎👊  

Rooting for you!
Tracy & Team Silicon Beach

Local Trendlines

The latest MLS data dropped this week and the stories are all starting to look similar - prices down, inventory up. See a couple of the charts below. All of this is discussed in this week's buyer blog post. Text the word TRENDLINE to 424.228.9969 to start a conversation or to request a custom trendline for any community, zip code or neighborhood. There are lots of ways to slice and dice the data.

You'll hear us talk a lot about trendlines. Why do we make a big deal about them? If the trend favors sellers, it's one negotiation strategy for buyers, and if the trend favors buyers, it's another. We regularly report on Venice, Westchester and Manhattan Beach, but are happy to accommodate requests for custom reports. Read more on GetTheTrendline.com.
 

Want a trendline report for another neighborhood or property type? Text the word TRENDLINE to 424.228.9969 and we'll get you fixed up. 
 

Real Estate Buyer News This Week

Here are links to a couple of news items we saw this week that might interest you as a property buyer in Silicon Beach:

• It's More Like Giving Back Some Crazy Gains

• Is Kentwood On Your Buyer Radar?

• 3 Key Tips For Buyers

• Lender Tracie Schmidt Explains Rate Buydowns

• Interest Rate Hikes Are A Good Thing

• Listings Are Starting To Mention Seller Financed Rate Buydowns

• 3 Trends That Are Good News For Today's Homebuyers

Some Fun Stuff

Here are a couple of links to lifestyle events and information to help you get to know our community better:

• 21 Pies For Your Holiday Parties

• Hotdog!

• For Your Next Staycation

• Henry Taylor Retrospective At MOCA

• Discover LA's Vinyl District

• Tips For Attending Live TV Tapings

• LA's Best Comic Book Stores

Have a great week!
Tracy & Team Silicon Beach Properties

P.S. Do you know somebody else who wants to buy real estate? Please forward this 💯 buyer-focused newsletter. ❤❤

P.P.S. Listings information presented below is customizable on request. Interested in sold listings, for example, but not the for the city shown? Text the word HEY to 424-228-9969 and we'll get you what you need.
 

An Aerial Tour of Venice We Can't Get Enoug✌🕶👙🚲🌞