The relationship between a Buyer and Seller is complex and always evolving—much like a Dating Relationship.
Buying a house is much more complicated than just getting a loan, and luckily, there are a million unwritten rules for dating that translate pretty easily into real estate which can help us navigate these pitfalls. Pitfalls?
Let me put it this way, we all know people who are great at being in a relationship, and we know others who are destined to remain a bachelor forever. Which type of person do you want to be?
When it comes to buying or selling real estate, if you want a smooth process and a good deal, don’t act like a Bachelor!
Buying and Selling real estate is an art form, and it doesn't just apply to Buyers and Sellers. This applies to Agents, too! I've seen agents kill a deal by making these dangerous missteps that could have easily been avoided. For that reason, it’s important that everyone involved to know about these relationship dynamics. In fact, knowing about them might help you get what you want. Here are a few things to consider when dealing with a Buyer or Seller...
The Follow-Up Call
How soon after writing an offer should you call? You don’t want to appear too needy, even though you’re jumping out of your skin to know if they will accept. Every move the Buyer makes before they open escrow will be judged, and Sellers will fly in experts to interpret their meaning.
Translation: The Sellers want to know what kind of a Buyer you'll be, so put your best foot forward. Don’t be pushy. Don’t be needy. Give enough information right at the start, but also a reason for them to want to call you back!
Just because you bought the Seller a few drinks doesn’t mean they owe you anything in return. Yes, you offered a price over asking, but don’t expect a big Seller Credit just because you gave them a good price.
In case you were wondering, this is How to Buy a House, not How to rip-off the Sellers.
Translation: The name of the game is fairness. Offer a fair price, and negotiate fairly throughout the process. You never know when the tides will turn, and you need something from the Seller. For that reason, you always leave a little left on the table just in case you need it. (Pro Tip: You almost ALWAYS need it!)
The Cheerleader Dynamic
You were lucky enough to take the cheerleader to the dance, but there’s no guarantee she’s going home with you. There are a lot of people out there who would love to be in your position, so don’t take it for granted. While this is mostly geared towards Buyers, Sellers should listen up, too.
Even though there is a shortage of good houses, you’re not the only one out there, and people will only put up with so much. In the Los Angeles real estate market, roughly 1 in 4 escrows will be cancelled for one reason or another. If you want to do business, it’s time to get serious. Just one wrong move, they’ll kick you right out of escrow, and you’ll be sitting at the IHOP after the dance with your friends coming up with excuses.
Translation: Treat your counterpart well, and realize just how delicate this process is.
Before you’re in the relationship, you have to be careful with too many phone calls. But once you’re in a relationship, you have to call and check in. The Seller wants to know your every move: How are your inspections coming along? Is the loan approved yet? Do you have a copy of the Appraisal? When are we closing? It’s always best to be proactive and make the call before they have to reach out and make the call. You don’t want a "Nag" as your counterpart. That makes for a very long process!
Translation: Play it cool at first so you don't look too needy, but then make the effort to keep them in the loop once things get moving. Make sure everyone is happy and confident in their decision to pick you.
A girl is not going to waste her "prime years" in a relationship that isn't going anywhere. Similarly, A Seller isn't going to wait around forever either. Once you're “All In”, it’s time to physically commit and let them know you’re serious about closing. Why is that important? Before the Buyer physically commits, the Seller can continue to market the property for sale which is the last thing you want as a Buyer, OTHER buyers sniffing around YOUR house!
Translation: Put a ring on it! Start talking about closing specifics, discuss removing contingencies, etc.
Final Thoughts on How to Buy a House
In dating and real estate, people say, “The good ones are always taken”. That’s because they’re stuck dealing with people who make their lives more difficult than it needs to be. Be someone that people will fight over to work with you. This is what I have been referring to as "the obvious choice".
Being the Obvious Choice in real estate means being Prince Charming, Johnny-on-the-Spot, and "Fonzie" all rolled together.
Honestly, you don't need a manual on How to Buy a House because these concepts are pretty simple and intuitive. But unfortunately, being the Obvious Choice isn't always so obvious. Things get complicated when our emotions cloud the situation and we're swimming in paperwork.
Before you dive into a real estate transaction, take a few minutes to think about both sides and what everyone really wants to accomplish. Before all the stress and the emotions, play the process through your head. It doesn't happen all by itself...
If you want to act like a gentleman and "get the girl" at the end of the movie, you have to PLAN on ACTING like one! For as much money as you're about to spend (or make on the sale), it's definitely worth considering, don't you think?
If you do make a conscious effort to work hard and act like a gentleman, you will be amazed what kind of house you can buy!