What are some tips for average buyers to compete with investors in the LA market?

Asked by Trulia Los Angeles, Los Angeles, CA Wed Apr 17, 2013

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13
robbie sikora, Agent, Santa Monia, CA
Fri Apr 19, 2013
Great question and since most properties are getting multiple offers these things are important to know.
1. Have all your finances tight and ready to go. This includes liquidity of cash for your down payment as well as completing the pre-approval process with your lender. All cash doesn't always win but the seller will need to feel comfortable and confident that you are financially prepared if borrowing.

2. Tighten up your offer. Maybe forgive the seller from paying for a home warranty; Shorten your buyers contingency period and get through your inspections quickly; Shorter escrow period to close quicker if possible. These are things that may separate yourself from other offers.

3. Buyers should write a personal letter introducing themselves and informing the seller of how much they like the property and how they can see themselves living there. Add a picture of you and the family to really personalize it. this is a great added advantage and works very well with most sellers.

4. Ask your agent if he/she can get in front of the Seller to present your offer. Taking that extra step to show how much you want the property.

For additional tips please feel free to contact me directly (as long as you are not already working with another agent).

Best of luck,
robbie sikora
310.710.5214
Gibson International
1 vote
Sri Kesava, Agent, Venice, CA
Thu Apr 18, 2013
Kudos to the agents who actually gave advice and not just a self-promotion! The Golden Rule, well, rules!
1 vote
V Kumar, Agent, Pasadena, CA
Tue Jul 2, 2013
A lot of great points from my fellow realtors. Kudos to all of you.

Money talks and sellers listen. A 5 percent down payment is not as impressive when buying a house as a 10 or 20 percent down payment. Another concern of sellers is that a winning buyer may get cold feet and default on the home purchase contract, stranding him without a sale.

If you can put as much money as possible into the earnest money deposit (a month earlier than the down payment) you communicate your intentions to follow through with your home buying offer. After all, if you withdrew your offer, you'd lose this deposit. Other competing offers cannot contend with such diligence.

When buying a home in a context of multiple offers, try to create a connection between yourself and the seller. Selling a home can be an emotional experience, and you can get on the seller's side by communicating your appreciation for their home.

Show concern for the seller's situation by relaxing on the buyer possession aspect. Offer a post-occupancy agreement and give the seller a few days to move without expecting anything in return. Keep your connection positive by not requesting personal items from the house.

Forgo inquiring about the antique chandelier in the foyer - if he wanted to sell it, you would know about it. Lessen the seller's burden by picking up the tab for some of the seller's costs such as escrow fees, transfer fees, and title policies. Encourage your agent to befriend the listing agent and discover which seller's special requests will "seal the deal." Then try to arrange to meet those needs.

If you carefully consider and apply these ideas, you will surely be a step ahead of the competition.

Happy hunting.

Vinu Kumar

Work: 800.846.1619
Mobile: 949.887.2567
Fax: 626.628.1956
Email: emailvinukumar@gmail.com

http://www.linkedin.com/in/vinukumar1
0 votes
Kim & Kristi…, Agent, Santa Monica, CA
Thu May 2, 2013
Buyers can have a great competitive edge when they understand what each incremental $10,000 means in financing. Talking with a loan officer, and using a loan calculator for examples will help provide clarity.
To break it down, for example, if you are putting 20% down your deposit will increase $2,000. The remaining $8,000 will be financed over 30 years at 4%. What it translates to is an extra $28 per month for your mortgage payment. Part of that payment is covered by Uncle Sam as a write off of interest on your taxes. At a 35% tax bracket, it will be $18 per month. That is less than a cup of coffee per day. Most people move every 5 years, after 5 years you will have paid $1,080.

Adding it up, the $10,000 increase in an offer is approximately $3,080 over 5 years.
0 votes
Kris Kanan, Renter, Santa Monica, CA
Sun Apr 21, 2013
Looks like my fellow agents covered most of it and honestly, unless there is really some secret magic dust that I haven't discovered yet, it really comes down to the buyer's agent's skills and submitting the best offer. Investors will stay away from a sale that is close to market value because they need to make money. Cash buyers (non-investors) are usually the enemy for financed buyers because they are cash and can offer a short closing and little to no contingencies. I agree with the letter and photos, especially if it's a regular sale. My client won a deal that way. That was the only difference between us and the other offer.

Speed and having your ducks in a row (a complete package) is important. However, the new trend on the listing side seems to be offering 2 opens (broker's and Sunday), then having a due date/time on offers. When that happens, I always ask the listing agent if they will be responding to all offers or the top few. That is critical to know. If their strategy is to only respond to the top 1-3 (or whatever) offers, the buyer has to go in with their highest and best offer. If they are responding to all, they can hold back a little. However, that can change too. If the buyer LOVES the place, I say throw everything you have at them. They are all on a case by case basis.

Hopefully soon, we will have more inventory and when a buyer decides to buy a house, they will actually be able to do so without this much drama. I feel for all buyers. It is truly an emotional roller coaster.
0 votes
Dorene Slavi…, Agent, Torrance, CA
Thu Apr 18, 2013
The average buyer needs an excellent "Buyer's Agent" in order to choose the right property and to get the help you need to submit a competitive bid on a property. All cash is strong but there are ways to make your offer stand out as well.
0 votes
George Salaz…, Agent, Santa Monica, CA
Wed Apr 17, 2013
Work with a Buyer's Agent that has experience getting his Buyers into properties. We know how to get your offers accepted.

George Salazar
Prudential Berkshire Hathaway HS
3130 Wilshire Blvd
310.400.6756
0 votes
SERGEY FEDNOV…, Agent, Beverly Hills, CA
Wed Apr 17, 2013
First and foremost is to have a great agent to help buyer(s) with purchase of real estate.

Have money ready and/or Bering pre-approved.

Able and willing to execute quickly.



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0 votes
Cheri Bright, Agent, Santa Monica, CA
Wed Apr 17, 2013
The average buyer needs to know 4 vital tips when competing with investors:

1) Know exactly what property you want
2) Be ready and able to buy property
3) Move fast and don't hesitate when you do find the right property
4) It's a sellers market, be ready to go against other offers so be aggressive

The biggest loss to newer buyers in this market is that time is not on their side. Opportunities are on and off the market in as little as a week. If you are not ready take the steps you need to get ready.

I can help with any issues and I am happy to assist any buyer that needs some guidance or insight to get as prepared and as comfortable as possible with the home buying process.

Cheri Bright
310 562 1984
cheri.bright@evusa.com
0 votes
Elizabeth Sa…, , Fort Collins, CO
Wed Apr 17, 2013
Great question... The difference could possibly be cash. I've sold my listings to both cash investors and 'average' buyers. Not all investors have won the bidding war though. Just have your loan qualified and be ready to jump on submitting an offer. Feel free to contact me directly if you'd like assistance with the purchase of your home and winning the bidding war.

Elizabeth Sorgen
310-469-0500
0 votes
Jodi Summers, Agent, Pacific Palisades, CA
Wed Apr 17, 2013
You need to position yourself as strong as possible.We have an arsenal secrets that we use that are working for our buyers...but we're not sharing that information in a public forum. We keep it for client negotiations. Become our client and watch us work our magic.

Best….

Jodi Summers
The SoCal Investment Real Estate Group
Sotheby’s International Realty
jodi@jodisummers.com
http://www.SoCalInvestmentRealEstate.com
License # - 01343854
**
You rarely achieve finality. If you did, life would be over, but as you strive new visions open before you, new possibilities for the satisfaction of living - Eleanor Roosevelt
0 votes
James Sanchez, Agent, Burbank, CA
Wed Apr 17, 2013
They really can't compete.... it is sad to say but it really comes down to the listing agent. You see way to many short sales or REO's, or even beat up regular sales that the listing agent double pops and the investor buys it. Sometimes they do a small rehab job and throw it back on market 2 months later for 100k more. What I have learned is look and see who the listing agent is or company.... You soon start to realize who is really marketing a property to sell and who just puts it on the MLS to get the short sale approved but never has the intention of accepting an outside buyers offer. But as prices keep rising it seems that there are less and less investors out there trying to sweep up everything.
0 votes
Sri Kesava, Agent, Venice, CA
Wed Apr 17, 2013
It sounds old-fashioned... but a heartfelt letter to the Seller when making an offer, including pics of your e.g. "lovely family," and how they are looking forward to caring for and enjoying the home can help. Sometimes also explaining how you will maintain the charm of the property, and not tear it down for a new development can also help. Believe it or not, some Sellers do very much care what happens to their home and the integrity of the neighborhood's history. These may win Seller over in a relative difference in offer price between you and investor, but if the investor is much higher in price or all-cash, (as we are seeing a lot these days) it may not be enough.

Having a local Realtor represent you can be key. We have pre-existing relationships with each other, and that can also help the Seller's Realtor feel confident about entering into escrow, and perhaps championing your offer. I do, however, think it's important for Buyer and Seller to have their own/separate representation.
0 votes
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