Want To Buy A Silicon Beach Property? Do This First
So you’re following the news and interest rates and you know it’s time to buy your first home, next home, vacation home or rental property. What are the first three things you need to do? Hint! Looking at listings online is a distant fourth on our top three list!
1. Start Dialoguing With A Great Agent
Hmm, seems like you would start shopping first? I certainly understand the appeal of wanting to know what’s out there, but don’t assume you’re getting the whole story from a website.
And I don’t mean “find” an agent. I mean really, really start a conversation about your purchase goals. An agent with hyperlocal experience in your target area can fill you in on the trends, the on-market inventory, the off-market inventory and the likelihood of finding what you want at the price you want to pay.
A great agent can also advise on complications, like buying and selling at the same time. Think there is no point talking to a buyer’s agent before you even list? There is no such thing as dialoguing too early with a committed buyer’s agent. That person can walk you through likely scenarios on the buyer end and help you find a good seller’s agent if the buyer’s agent you found isn’t a candidate to list for you.
At a minimum, it’s very helpful for your listing agent and buyer’s agent to effectively communicate to serve all your best interests.
Do you think you have to sell first and move into a rental before you can start buying? You may not. The specifics of your situation can be discussed with a smart buyer’s agent and you may be able to juggle both at the same time. The secret is to work with agents on both ends who completely understand your selling and buying neighborhoods.
Pro tip! Do not make your offer through the listing agent or somebody on that agent’s team. How do your interests remain a priority in that scenario? And why do you think you’re the only buyer they offer to write for? No, you want to steer very clear of that kind of situation. At least if you care about somebody advocating for your best interests.
Actively dialoguing with a great buyer’s agent and signing a Buyer Broker Agreement is your ticket to solidifying your agent relationship in a dynamic and fast-paced market and having an agent dedicated to your best interests.
2. Get Your Financial “I’s” Dotted & “T’s” Crossed
Do you need a loan to buy? Getting hooked up with a lender is definitely your next stop on the home buying train. Lenders are so important in the buying equation that they almost should be rated a “first stop” because they will give you your price parameters, but I rank them a second stop because it will benefit you greatly to work with a lender who has a relationship with your buyer’s agent.
Why? Because in the current competitive market, it is critical for your agent to understand exactly how fast the loan can be funded so that the most attractive offer can be submitted.
For example, I’m working with one lender who is funding jumbo loans up to $2M with 10% down, closing in 21 days. Her company also offers to complete underwriting and appraisal within 10 days, so that buyers can write an offer using just one contingency - a 10-day inspection contingency. Closing in 21 days with one contingency is extremely competitive against cash buyers, but it’s a lot of plates juggling and a smooth, and preferably established, working relationship between your lender and buyer’s agent is critical.
Good agents have good lenders to recommend. Tap that resource.
Think that you’ll get a better rate with an online lender? Not necessarily and the downside is that online lenders are anything but nimble and sellers will choose similar offers with local lenders ahead of yours to increase the odds of closing on time. Mortgage brokers also have extremely competitive rates. You might be pleasantly surprised how a local mortgage broker stacks up against an online lender for cost.
If you are a cash buyer, you still need to think about where your money is parked, how you’re demonstrating your cash for the offer and how fast you can move it into escrow. Your only advantage as a cash buyer is if the seller thinks you are in a position to close on a quick timeline. Waiting until the last minute to organize your cash is a mistake.
3. Get Ready To Put Your Best Foot Forward Quickly & Dispassionately
You’ve got your trusted advisor and you’ve got your financial house in order. Now it’s time to shop, but it’s also time to move quickly if you find a home you like.
It’s no secret that most neighborhoods are experiencing very short “days on market” given the general inventory shortage. Houses move at lightning speed. When the time is right to pick a property, make sure your agent has everything he or she needs to make an offer on your behalf.
Also make sure you understand and are comfortable with electronic document signing, or make sure your agent understands you’re not. Signing without using electronic means slows down the process. It can be managed, but make your agent aware of your concerns.
Also make sure that you have at least 3% of your target price in liquid or near-liquid funds because the offer contract will require that you wire in 3% of your offer price within three days of opening escrow. Talk to your agent if there are going to be any challenges with this.
And most importantly, if you’re truly ready to go, see properties as soon as they hit the market. Don’t expect to make an appointment for “next week” and still have time to see, evaluate and make an offer on a property. By all means, see some practice properties, but let your agent know that “practicing” is your intent.
Finally, have your list of non-negotiable items for your property. Be ready to jump on any property that fits your requirements.
Last Thoughts
Easy, right? With the right team in place, buying a property in a hot market doesn’t have to burn you. Solid relationships and transparency are key. 💪
So who wants to kick off the list and talk strategy?? Book time on our calendar here or drop in during our online office hours - find us on siliconbeachzoom.com on Sundays from 10 am to 1 pm and Thursdays from 10 am to noon.
This post is from our “Buyer’s 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’s Edge program on our website. Want help buying real estate in Silicon Beach? Contact us. Need help beyond Silicon Beach? Reach out and let us help you find a Real Talk agent in your area.