The Truth About Cash Buyers

We have been getting a lot of feedback from real estate agents on the difficulty of securing buyers for purchase transactions. So we decided to address this topic. Since there are more Buyers today than there are Sellers, the challenge of having an accepted offer can be rather difficult. This is not the norm on a national level but in Southern California, particularly Los Angeles, Orange and San Francisco Counties there have been an increase in double-digit offers for certain property types.

Having multiple-offers in a competitive market is not uncommon, in fact, it is almost a norm. When rates have been at an all-time low and home values have been hit due to our economic collapse, what you have is a perfect storm. This storm brings out investors, first-time home buyers and transitional buyers that are taking advantage of the market. There has been a great deal of cash buyers (mostly investors) that have been presenting offers on numerous homes. An all-cash offer does not mean you are presented with the best offer. This just means the buyer does not need remove the financing contingency in the purchase contract. There is still a due-diligence, inspection and discovery period that the buyer needs to perform. Typically, a full-cash offer is structured for a 15 Day escrow.

As an active lending professional, we face these challenges daily. However, we have competed against numerous cash-offers and have closed many transactions as a result. Not all cash-buyers will be loyal. Chances are they are making offers on other properties as they understand the competitive nature of the market. Also, lenders understand the value of the customer experience. There are plenty of lenders that can offer great rates and service. Some can even close loans in as little as 15 days. This competes against many full-cash offers. It’s important to remember as a consumer that there are properties out there and professionals who are willing to make it easier to get your offer accepted.

The Challenge Of Being A Successful Real Estate Professional

In one word: Reputation. Our industry is changing and evolving so quickly, that people often forget that this is still a business that involves human interaction. It’s great we can access inventory, statistics and information through the wonders of technology. However, our business is based on credibility. Listings, referrals, web-presence and signage can promote credibility based on market presence. Every successful professional whether you are a real estate agent, broker, loan officer, title rep or escrow officer will tell you they are successful because of one thing: They always prospect for new business. That means we have to be consistent in our marketing and branding.

Since technology offers different ways to promote you, we often forget this is just a tool and not a means to close a deal. You still have to go out there and promote yourself. After all, 99% of clients do business with you based on two factors:

     1. They like you.

     2.  They trust you.

As a real estate professional, I have built up my business by being consistent. I rarely turn away clients, even when I know I am already at capacity. This just makes me work harder. Because of this, I have been fortunate enough to have business year round. However, building your name and reputation takes time just with anything. Being consistent gets you there but execution is what stands you a part from your competition. This is what creates your brand. Every day we face competition, losing a listing, gaining a buyer and so forth. Real estate is not for everyone and not everyone can make a good living at it. We face tremendous amounts of strain and sometimes the payoff might not be worth it. But it is the mindset to continue with this process and be better that leads us to becoming successful in our profession.

Southern California Real Estate Is Going To Be Hot!

It’s an early start to the fire season. The fires that started a couple of days ago near Camarillo, California remind us that we need to be prepared for the upcoming hot months. With the dry weather and lack of rainfall this year we are definitely prone to more fires.

Every year, I get a postcard from the LA County Fire Department reminding me of the annual brush clearance deadline. This means any vegetation, brush, tree or shrubbery that is not properly kept will need to be trimmed. The physical residence needs to be clear of anything that may be considered a “contributing factor”. The point is, as residents, we need to “fire-proof” our homes as best we can.

When it gets to this time, here are some tips I follow:

1. Cut and remove all vegetation (grass included) to the ground.
2. “Lollipop” all trees, bushes and shrubs.
3.  Clear rain gutters of debris.
4.  Clear perimeter of any dead vegetation.
5.  Buy first aid kit (I do this every year).
6. Create a “survival” package.

This is a nutshell version of what I do to prepare for the fire season. As a worse-case scenario precaution, the first aid and survival kits are included in case I were to separate indefinitely from my home. Let’s hope that the Southern California housing market stays hot on a figurative basis and not on a literal one.