Mistakes made by Sellers and Buyers
Land has always been the most desirable asset to the human race. They aren’t making it anymore! The human brain wants to possess, and hence, has forever been after land on the planet. Everyone wishes to accomplish and achieve as much as one can in one’s lifetime. This is why the real estate business has seen a huge boost in present times all around the globe. Although, the field is greener in the real estate domain, yet there are several tricks missing and some pretty common mistakes committed by both sellers and buyers that pull down the efficiency of a deal.
Here we shall discuss a few major mistakes that are committed and should be avoided both at the end of a buyer and a seller:-
Mistakes as a Seller or Buyer:-
– Avoiding hiring/working with a Agent or Broker: – Its quite common misconception that as a Buyer, you wouldn’t want to work with a Buyer’s agent, in hopes to find a property and work the deal direct with the Listing Agent in hopes to get a better a deal. Here’s why that tactic doesn’t work;
1) The Listing agent has a Listing Agreement with their Seller. The Listing agreement typically states that the Listing Agent will get paid whether or not there is a Buyer’s Agent involved. So instead of splitting that 6% commission between a Buyer’s Agent and Seller’s Agent, than the Seller’s Agent will retain all of it!
2) There is a lot more clout, when a Buyer is represented professionally. The Seller will soon realize that he/she is working with a professional on the other side. The negotiations, and process in generally should run smoother because everyone has a particular goal in mind. One side wants to sell, the other side wants to buy. Now its just a matter of creating a win-win situation for all parties involved.
3) Conflict of interest. The Listing Agent job is help his Seller to obtain the highest offer price on his clients property. Therefore if he also represents a Buyer, than that Buyer will want the lowest price to purchase the subject property. How can one party represent both sides without being in conflict?
– Refurbishing the property: – The property up for sale often needs upgrades or repairs that are not actually entertained by the seller before they show off the property to a potential buyer. This is where the seller loses a chance of getting a higher bid for the property.
– Over the market value: – Another mistake that sellers commit is listing a property that is over the market value. The right property value comes with a flexibility of -3% or +3% of the market value. Any amount too higher than the market value is creating a potentially disastrous marketability. Overpriced properties sit on the market, then there’s a “stigma” that all Buyer’s believe there’s something wrong with the subject property. Usually there will be an eventual price reduction, but its too late. Studies show that if the Seller had placed the property on the market at the correct evaluation instead of over-pricing, than the Seller would have received more money at the end of the day in a shorter period of time (time is money too!)
Mistakes at the buyer’s end:-
– Hurrying up: – Buying property or real estate takes a considerable investment, and hence, should only be processed after going through all the probable options and confirming the best price for you. Hurrying up in such matters is a mistake committed by buyers that can cost them way too much at times.
– Fear of negotiation: – Buyers have a fear of negotiating with the seller or the agent. This is basically because they lack the knowledge of the exact market value and trends and think that they might sound unrealistic or novice or might make an offer that would be too ridiculous to be accepted. This is where they lose a lot of opportunities in getting the property at a price that they desire.
– Loan terms: – Buying a property on loan is an interesting prospect for all. Leveraging is one of the greatest tools we have as real estate investors. It is a mistake at the end of the buyers when they do not look for a favorable loan terms that will be suitable for the acquisition.
Having considered the major mistakes committed at the end of both buyers and sellers, you are now equipped to grab the best deal for yourself whether you are selling or buying a property. If you need assistance in the Los Angeles market, please call us, we are here to help (818)501-5518