If you’re a buyer, there are two particular mistakes you need to avoid that I’ve seen other buyers make plenty of times over the course of my career.
What are the two biggest mistakes I’ve seen buyers make over the course of my career that you need to avoid?
The first is working with the listing agent. A lot of buyers assume they’ll get a better deal by doing this, but the problem is that the listing agent already has a fiduciary responsibility to their seller client. How are they going to be able to get the highest sale price for their seller and the lowest sale price for you? They can’t—that’s a conflict of interest.
As a buyer, you’re better off hiring an agent who works for you specifically and knows all of your wants and needs so they can negotiate the best deal possible. In the end, having a buyer’s agent negotiate a $20,000 discount is better than a listing agent offering you a $5,000 rebate.
The second mistake is fighting too hard for the best deal. When you purchase a home, timing matters more than price. Why? Let’s say you bought a house in San Diego County in August 2006 for 2% less than what was the average sale price at the time: $599,378. That means you would’ve paid about $590,000 for it. But if you would’ve sold that house five years later in August 2011, when the average sales price was $402,878, getting that extra $10,000 wouldn’t have made any difference.
Conversely, let’s say you bought a home in August 2011, and you and your agent didn’t do a great job of negotiating. As a result, you paid $10,000 over the average sale price of $402,878. If you would’ve sold it five years later in August 2016, when the average sales price was $601,534, that extra $10,000 you paid wouldn’t have mattered either.
I always advise my buyers to treat their house as their home—not as an investment. If you save $10,000 buying a house where your kids have to cross a busy street to get to school for the next seven years, is that worth it? If you’re buying a home for your family, there are more important things to think about than saving $10,000.
If you have any more real estate questions, or you’re thinking of buying or selling a home soon, don’t hesitate to reach out to me. I’d be happy to help you.