7 Tips for Handling the Stress of a Real Estate Transaction

The process of buying or selling a home can be one of the most stressful events in a person’s life.  All transactions involve the unknown and this more than any factor can drive both buyers and sellers into a state of heightened emotional chaos.

Throughout  the real estate transaction there are points where the stress is heightened for both buyers & sellers.  For buyers the stress really begins with deciding to make an offer and at what price.  Especially in a seller’s market this decision can feel rushed and lead to second thoughts.  Are there better houses? Am I paying too much? These questions haunt the buyer as they approach the decision to write an offer.  At the same time the seller is stressed over which offer to accept? Will this buyer perform?  Of if we hold out will a better offer come along?

Both sides of the same event are stressful due to the unknowns. The mind races through all the possibilities, filling in worst case scenarios where facts are missing. Dealing with these thoughts and sorting out what is a reasonable concern versus the imagining the worst is difficult absent good information.  That is a key reason why having a real estate agent who is a good communicator is essential.  Rather than running through all the possibilities in your mind, ask your agent questions and listen to her as she walks you through the uncertainties.  For buyers posed to make an offer, this means reviewing the comparative properties, understanding the prices houses are going for in the area and why the list price or the offer price is what it is.  This is real data, trust it, and it should assuage concerns about the price.  For sellers the agent can walk through all of the offers and explain the positive and negatives of each as well as provide comparative sales data to justify the offered price or what to counter.  A decent agent will not tell you what to do in either case but guide you through the decision making process so that you can put the demon questions to rest allowing you to make a decision.

They key to reducing stress is to keep in mind that once a decision is made the process moves along on a predictable path and although things arise that are unexpected, you now are being guided by a clear agenda and experienced professionals.  When things come up and the unknowns rear their ugly heads, try these tactics to reduce stress:

  • Are the thoughts and concerns I have reasonable?
  • What is the worst case scenario? Imagine it then put it in perspective and understand that you cannot control most outcomes. Once you do this, don’t continue to dwell on it.
  • Take care of the here and now. Do the things required of you and realize that most of what needs to happen will be handled by professionals.
  • Put yourself in the other side’s shoes. Are their concerns and requests reasonable from their perspective.
  • Ask the experts! If you worry about what the inspection reveals, talk to experts to get perspective on the information you receive.
  • Focus on the ultimate goal. You are moving and whether you are buying or selling the end result will be a new home and the goal you set when you began the process.
  • Go about your life; keep to your routine and continue to focus on the things that preoccupied you before you began this journey.

As a real estate agent I share the stress that’s involved in buying or selling a home.  I too am on pins & needles during the offer process.  Rather than spend the day worrying about what will happen next, I focus on the fact the decision is completely up to the sellers and I have done the best I can do to position the buyers offer in the best possible light.  I know that if we don’t get this one we will find a house that is just as good or better.  When unexpected hurdles come up during escrow, I focus on what I need to do to deal with it and remind myself that this is a learning process that will make me a better agent regardless of the outcome.  So despite doing this day in and day out, when my head hits the pillow, I am asleep before I have the time to fret over the problems of the day (most of the time!).

Contact me at http://www.LAandymay.com

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Is it better to buy or sell your home first?

page cut out from a vintage 1956 issue of an architectural magazine etsy

When selling your home in order to buy another home, the question of which to do first comes up immediately.  Should I sell my current home first or should I buy my next home then sell?  This can be a tough decision to make.  If you currently own a home and are considering a move, you need to first examine the reasons you are moving.  Are you relocating for a new job? Have you out grown your current home?  Are you downsizing empty nesters?  Having a clear goal in mind will help make the decision of what to do first easier.  For example, if you own your home outright with no mortgage, it’s much easier to buy first as you do not have to pay two mortgages and you will be in a better position to decide which of your belongings fit in the new place and which need to be tossed out.

Pros of Selling First

Not paying mortgages on two house

You know exactly how much you have to spend on your new home.

You’re not tempted to take a lower offer because you are not the under pressure of multiple mortgages and the desire to get into your new home

 

Pros of Buying First

You don’t have to move twice, once to a temporary rental after your current home sells, then again to your new home.

You will be less likely to rush to choose your new home and possibly miss out on a better deal.

Not stuck in a temporary situation like a rental that could add stress to your daily life.

 

But right now, in Los Angeles and many other sought after urban areas, it’s a seller’s market, and that almost necessitates selling first. Unless you have a boat load of cash, or access to a bridge loan, you have to sell your home before you buy your new one in order to compete for the property of your dreams.   If you make your offer on the new home contingent upon the sale of your current home, you will likely find your offer at the bottom of the pile.

So if you really want to sell your home to buy a new one in the current hot  LA property market, keep in mind  that although you will benefit as a seller,  you will join all the other buyers competing for the low inventory of homes for sale at this time.

One way to work the seller’s market in your favor is to have the buyer agree to make the closing contingent upon finding and closing on your new home.  Buyers may be reluctant to agree to an open ended closing but might agree to an extended closing of 60 or 90 days.

Another tactic is to close on the house you are selling but rent back from the buyer until you have found your new home.  Again there are buyers who might find this option appealing especially if they have to sell their home as well.

As a final resort, you can always put you stuff in storage, and move to a short term rental.  It may be disruptive to your daily routine but it could also be viewed as a vacation, especially if you pick a place with a pool!

As soon as you feel you’re ready to get serious about moving, begin talking to a real estate agent.  You need an agent who will work with you on the best course of action, at your pace with your interests in mind (like me!).  Have the agent prepare a comparative market analysis for your home to give you a professional estimation of what your home will sell for and what you will net from the sale.  Then reach out to a Mortgage lender to discuss your financing options and how much new home you can afford.  Have your real estate agent set up searches based on your search criteria & start looking for your dream home.  Once you have found something you feel you would make an offer on, you know it’s time to put your house on the market and begin the search in earnest.

Know your motives, your desires and your personality type, hire a good realtor, and jump into the process.  It will be stressful, but it can be fun and exciting and in the end you can make your dreams come true.

www.LAandymay.com

Contact Me at: andymay@yahoo.com or txt or call 213-713-0385

Top 5 home buying myths in LA

The truth: it IS a seller’s market right now and that poses real challenges to buyers looking for a home.  But whether you are a first time buyer with limited funds or a seasoned pro looking for your dream estate, you need to keep in mind, not all common knowledge is 100% accurate

  1. I cannot afford to buy a house in this market: While it may be true you cannot afford the exact house in the exact neighborhood you have been dreaming about, sometimes close enough works.  Look outside your ideal location to find the house you can afford.  Can’t afford Silver Lake, try Altadena…  Consider condos, fixer-uppers or short sales… Work with an agent who can help you think outside the box and provide advice on locations and alternatives that will allow you to get the most for your money.

 

  1. I will get a better deal if I don’t use a buyer’s agent, its best to approach the listing agent and let her represent me in the transaction.  The thinking is, if the seller’s agent accepts the buyer as a client, he makes the full commission and is more likely to cut a deal with the buyer.  But keep in mind the buyer does not pay the agents, the seller does.  The listing agent is hired by the seller and has a fiduciary duty to the seller.  The half of the commission they would traditionally split with the buyer’s agent is not going to be handed over to the buyer.  It’s more likely the agent will keep the full commission and walk away happy to have found another misinformed buyer.

 

  1. It’s a housing bubble in LA and I should wait until the next downturn to buy. The truth is the signs present in the last bubble are not present today.  Pricing is at historic highs, but you could be waiting quite some time to catch the market on the downside. Your home is an investment you can live in.  Trying to time the market could leave you wasting more money on rent and loosing potential appreciation, than the possible future gain from buying when everyone else is selling.

 

  1. You need to have 20% for the down payment. There are a variety of ways buyers can reduce the amount of money required for the down payment; qualified borrowers can make down payments as low as 3% with private mortgage insurance, or the FHA offers a low-down option payment of 3.5% for people with imperfect credit histories.  In addition to these and other loan programs, there are sources of monies you may not have considered such as taking a loan from your retirement plan or you may also withdraw cash from an IRA for a home purchase.  Working with a real estate agent and loan officer early in the process will put folks on your side who want to help you make your home buying dreams happen.

 

  1. El Sereno is the next Highland Park. There are a number of locales that are being pushed as the next hot neighborhood but there is no one specific neighborhood that everyone agrees will become the next place the hipsters are moving to.  You can get great deals in “up and coming” neighborhoods throughout LA and with the guidance of an experienced real estate agent you should not find yourself in a place you are unhappy living.