I’ll let you in on a real estate secret: the best realtors don’t want to work with buyers! There are several good reasons for this, which I’ll explain, but I found out recently that I love working with buyers!
Many people get attracted to a career in real estate because TV shows can make it seem glamorous. You wear fancy clothes, drive a luxury car, show people beautiful homes, and most importantly, make huge commissions! But then reality sets in that every step of the process is more difficult than you expected. And finally, when you do earn a commission, the net amount you earn after broker splits and expenses is far lower than you would want.
Let’s review the basic process for buying a home:
- Get pre-approved for a mortgage. You can’t go shopping for a house until you know you can get a loan to buy one!
- Select an agent to be your guide – typically people pick a friend/family/neighbor that you want to “help out.” Maybe they just started and you want to support their new career.
- Tour 20-100+ houses to find one that could live with.
- Submit 10+ offers and pray yours gets accepted. Get upset and disappointed when you lose homes.
If you’re the lucky agent, this is an extraordinarily tedious process. Showing houses all weekend long and writing offers takes a lot of time. I remember meeting a woman who was interested in being a part time agent because she thought that it could be a fun and lucrative career, while balancing time with her family. I asked her to tell me about the process when she bought her current house. She told me a story of how their agent showed them over 100 houses and they wrote over 10 offers before they finally got an accepted offer. Then they proceeded to beat up the agent to reduce her commission.
“How much time do you think your agent spent working with you?” I asked.
“Oh, at least 200 hours!” she replied.
“You said she netted $6,000 after broker splits and expenses? That comes to about $30/hour.”
She responded, “Oh, now I feel bad about squeezing her on the commission!”
When you’re an inexperienced agent, you’ll work with buyers to start learning the business. Experienced agents prefer to focus on listings because they take less time to sell.
After my most recent buyer transaction, I realized that maybe I’ve been avoiding buyer clients and that is a major error on my part! I looked up all the transactions I’ve had in the past few years and found an incredible trend: I was able to get all my buyers the house they wanted on their very first offer on the first house they wanted!
This was an incredible discovery. I dug into each transaction, racked my memory on how each one went down and was shocked to find this out. I’m writing this blog to elaborate on what I did differently to ensure a better result for the client, with a lot less stress, and a lot less wasted time.
- Prepare the buyer: Getting a pre-approval from their lender is an absolute 1st step. When we find your perfect house, we’re going to need to move quickly. If you’re not ready financially, you’re not going to get an accepted contract.
- Set up expectations with the buyer clearly so they know all the timelines and various contingencies.
- Prior to viewing any homes, I work hard to nail down the buyer’s location preferences. I know I’ve saved a lot of time because I know San Diego well enough to know if a home is located on a busy street, under the airplane flight path, or any other negative factors.
- I have the buyer get a “love letter” ready to customize for the home they want. In many cases, sellers do want to pick a buyer they like to take over their cherished home, knowing a great family will be moving in and will be a good fit for the neighborhood and their neighbors.
- Once the buyer has identified a listed property they want to view (or I get them an off-market lead), we take a very close look at the property. Because I often buy homes with no contingencies, I’m comfortable advising my clients regarding the condition of a home. Many times, we can limit the contingencies to just 7-10 days for financing. This gives the seller more confidence to choose our offer knowing they won’t waste time with a buyer that may cancel.
- Once the buyer confirms that this is the house they want to buy, I immediately contact the listing agent. There are several things I make sure to relay during the initial call.
- If we know each other, we may make some small chit chat and catch up. If I don’t know them, often agents in San Diego do know me, either from prior business, word of mouth, reputationally, or maybe even from social media. I find that often listing agents prefer to work with agents they know.
- I congratulate them on their listing and ask them how they got the deal (just creating more rapport).
- I state that the buyers are good friends of mine and I need them to get this house.
- I ask if there are any special considerations the seller would like us to include in our offer. This may range from a lease back after close of escrow, or something like the leaving furniture and other unwanted personal items in the house.
- I ask how many other offers are on the home and what we need to offer to be selected. I’ll also ask if they will accept an “escalation clause” on the offer (if needed). I rarely offer the highest amount on the offer and a smart listing agent knows that the highest offer could have problems with a “bait and switch” buyer.
- I’ll try to get any seller disclosures or prior inspection reports for us to review before we submit our offer. I make it clear to the listing agent and my buyers that we can’t/won’t renegotiate on items that have been disclosed to us in advance.
- I make it clear that I have excellent client control and we won’t play any games when negotiating any request for repairs and may only potentially request repairs when it involves health or safety concerns.
- I’ll warn the listing agent that there are a lot of fake or wholesaler offers, and to be cautious about accepting “cash” offers on homes that are in good condition. Oftentimes, the buyer will request a huge $200k+ price reduction weeks into escrow, wasting the sellers time and reducing the desirability of the home for the next potential buyer. I’ll offer to help the listing agent screen for bogus buyers since I’m familiar with many of those companies and the strategies they use.
- I’ll thank them for their time and communicate again that we will make this a smooth transaction with excellent communication throughout the process.
- When we write the offer, we make sure we follow all the instructions that the listing agent may have buried within the property listing. They may want us to review disclosures or offer specific terms that the seller has requested. By ensuring that we follow instructions from the beginning, we set the tone that we are professional and diligent agents.
- We include everything in one organized email, including the offer, pre-approval, proof of funds and often, a property love letter.
- By the time we’ve done all these things, the listing agent will often advise the seller to choose our offer. The listing agent wants to make the best deal for their seller, and many times there are more factors than just the net proceeds to consider. All the extra steps we follow ensure that the transaction will also result in the lowest amount of stress for the selling party.
- There is some more nuance in this process, but I can’t share all the details of my secret sauce of getting buyer offers accepted.
Below are some stories of several home buyers that have trusted me with getting their offer accepted and how much easier of a process I made it for them, verses using another agent.
Buyer deals:
SP –Pacific Beach Dr. – 2016 – 1st property he wanted. Shawn was my neighbor. He knew he wanted an investment property, and he found this one just one block from Sail Bay in Pacific Beach. It was in a complex that allowed short-term rentals and we were able to negotiate all personal items/furniture to stay with the unit. The listing agent knew me reputationally, so he choose our offer in a multiple-offer scenario. First property, first offer.
MS: Loukelton Way 2017 – This family is one of my oldest friends in San Diego. I’ve known the husband since 2007! Incredibly, one of our mutual friends lived in Allied Gardens and found out his next-door neighbor was going to sell. I was able to make a persuasive case to the listing agent that the buyer and the next-door neighbor were literally roommates 10 years prior and it would be a dream come true for them to have houses next door to each other! Plus, the seller was friends with the neighbor and wanted him to be happy to have his friend move into the house. We didn’t have the highest offer, but in this case, it was the best! The first and only house we offered on.
JG – Mission Center Rd – 2018 – These buyers were friends of my neighbors. They wisely asked me to help them buy a house. We toured very few houses before we found this property. Incredibly the seller had hired our construction company to do a full remodel of the property before he listed it for sale with another agent. The project came out beautifully, and of course it got multiple offers. Fortunately, the seller was persuaded to sell to my buyers because he knew me from working with our construction company!
AG – Caminito Formby – 2018. This buyer is my real estate attorney. He knows most of the top agents in town and I was grateful he chose me to find his home. He had been renting in this community for the past few years, loved it and wanted to find a model match unit. Unfortunately, by the time he got his mortgage approval together, there were no units available for sale on the MLS. The owner of the unit they were renting was moving back in, so they had to find another place to live pronto. He said his wife started working with a discount rebate agent to look at listed units in other nearby communities. That was a bummer for me, because I really wanted to help him find his ideal home. I asked AG if I could still find a unit in the community he wanted, could still help with his purchase? He said he didn’t know how I would do that, but yes, if I found a unit, he would use me to buy.
I immediately spent the next few hours finding the owners of every model match unit in his complex and proceeded to call all of them to see if they would sell. I made over 100 calls in 2 hours, left a lot of voicemails and didn’t get any hits. About 2 hours later, a woman called me back. Once she confirmed I wasn’t just fishing for a listing, we set up a meeting later that same night and signed a purchase contract for my buyer’s ideal unit, in a great location, in the community he had been living in. The seller had been renting out her unit but was tired of dealing with renters. I got a lucky with contacting her while she was between tenants! My client still lives in this unit and is happy to share this incredible story of how I was able to find him his ideal home off-market, direct to seller!
SP – Grand Ave – 2018 – This couple came to me as a referral from an agent friend in Las Vegas. They wanted to buy a home in San Diego, and we found a new unit for sale in a great location in Pacific Beach. This was a straightforward purchase, but once again, it was the first house they wanted, and we got our offer accepted on the first try. We didn’t have to view multiple homes, write multiple offers, or go through all the stress of that tedious process.
JS – Cass St. – off market purchase 2018- This buyer was a friend of a friend, who became my friend. She was looking for a place that she could customize as her own since she had significant interior design experience. This condo in PB was pitched to me to flip from a wholesaler I know. It wasn’t a good fit for me, but I thought of this buyer. We toured the property, she loved the location and the building, and the price was right for her to spend the money she wanted to do a full remodel. The buyer now has a beautifully remodeled new condo and still loves living in this incredible building in beautiful Pacific Beach. No touring multiple homes and writing multiple offers.
AH – Longbranch – 2019 – This buyer is another one of my oldest friends in San Diego. When he was ready to buy a house, he saw this one that he liked on the market. Small house, big lot, great location in Ocean Beach. The listing agent was a new friend from a recent prior transaction. It went smoothly, so she chose our offer in a multiple offer situation, and we got the house! First offer, first house!
FG – Seacoast – 2021 – I rarely use online lead generation services, but my team was insistent that we try the company that referred me to this buyer. It took a few calls to connect, but ultimately, the buyer was happy to connect with me since, per his impression of me, “You seem to know what you are doing.” He was an experienced buyer and was ready to spend $2m to buy an ocean front property in Imperial Beach. The property he wanted was already in escrow, but I knew there’s a chance that a buyer will fail to perform. In this case, I was tenacious, yet polite and kept in contact with the listing agent. Sure enough, a few weeks later I was informed that the buyer failed to perform. We got our offer in and closed on a dream ocean front retirement property for my savvy buyer! First offer, first property, just like all these other examples. A few months later, another agent I know called and asked if my client would sell the property for $4m!!! He declined.
MR – Cass St. – 2020 – After this sale, I had sold 3 contiguous units in this building! 201, 202 and 203! We looked at a few units with these out-of-town buyers. A couple of the tours I did via video call. Ultimately, I found this unit in this building I know so well, and it was a perfect fit for them. The unit needed work and the clients were happy to hire my construction company for a full remodel. First offer we wrote on the first property they wanted, and we got it accepted. We were able to do a beautiful remodel and here are the pictures.
VJ – Nicole Ridge – 2020 – This client had hired me to sell his current home and buy this incredible property that was featured in a design magazine. It took a few weeks to sell his current home, but we were able to get his offer accepted on this home, contingent on the sale of his current home. The listing agent is a popular, very good agent who you have likely seen on billboards and public buses. Fortunately, he knew me too and was happy to work with me and accept our offer in a multiple offer situation. Even though it was contingent on the sale of the buyer’s current home, he knew the house we were selling was in good condition, great location and priced right – and knew it would sell quickly. We were able to get the buyers house sold and purchase the new home with no issues. The first home they wanted, only offer they had to write!
BH –Fuerte Hills Dr. – 2021 – We had to get ours accepted over 16 offers. And my buyer, nor I, were willing to pay the highest price. This buyer is also co-owner of my construction company. I made it clear to the listing agent that because of our experience, we wouldn’t give the sellers any hassle about repairs on the house. We also said we would accommodate getting rid of any personal items left at the house, since the sellers were downsizing. The agent stated we weren’t the highest offer, but because of the other points, the sellers chose our offer! My buyer couldn’t believe he had his first offer accepted. When I dug in to ask why, he said he lost count at over 60 offers he had to write when he bought his prior property with another agent! The listing agent was so happy with the transaction she had with us, she sold me a fixer as a flip in the same neighborhood a few months later. Here are pics of that house.
DJ –Ballinger – 2021 – This is a two-part story. DJ is also one of my best friends. He was getting sick of his townhouse in Chula Vista, and he wanted to get a bigger place with a yard and most importantly, no HOA! So, we did a staging consultation, cleaned up his house a bit, put it on the market and got it sold for way more than he thought. The first place he liked was a nice house with a pool and a large lot in Lemon Grove. Multiple offer situation, but fortunately again, the listing agent was a friend, and she was happy to convince the seller to accept our offer. I’m usually good at spotting major issues before we submit an offer, but this one had a major hidden issue. Fortunately, that’s why we use trusted home inspectors to take a closer look at it! 2 hours into the inspection, we went into the attic and immediately saw major structural issues with the framing in the roof. The current seller bought the home from a shady flipper a few years ago. I’m not sure why her inspector didn’t catch these issues. It seems the flipper removed some major framing components to make it an “open concept” home. But that resulted in a major structural defect that would ultimately prevent us from moving forward with this purchase. The listing agent and the seller understood that. In fact, they dug in and decided to go after the flipper that sold the home with the legal system. The judge that heard the case found that the flipper had worked on over 80 homes in San Diego, so he immediately requested all those homes get inspected for major defects too. I just called the listing agent to see how that case was resolved: the flipper was forced to buy back the house and the seller was ultimately awarded damages that made her whole on the lost equity. Moral of the story – be careful when buying a house that has been flipped! At least get a proper home inspection.
On to the next house. DJ found a house in San Carlos next to Cowles Mountain. But it was already in escrow. I called the listing agent to get the scoop. As usual, I made the case to be a backup buyer if the current buyer failed to perform. Sure enough, the agent called me back saying her buyer wasn’t performing. We swooped right in! Two for two on offers with this buyer! This house was a dream setup for my buyer. The garage was already converted into a 2-bedroom separate unit. There was also a 700SF pool house with its own kitchen and bathroom, so he could rent that out too. The main house was 1,400SF 3 bed/2 bath, in pretty good condition. This was a dream setup for my single friend. He plans to travel a lot, so he is renting out all three units at this property to give him a lot of supplemental income! When he wants to come home, he just reserves the house, and stays in his own property.
CS – Via Palabra – 2023 – This was a tricky one. I knew this buyer for years, but he also told me plainly that he had family members that are realtors that he “had to use.” I can appreciate that. The listing agent is a beach volleyball buddy and he told me a story of how he had some issues dealing with the multiple offers on this listing of his. When I dug into the details, I found out I knew the buyer! I messaged this buyer and asked him how his housing search was going. We got on the phone, and he told me how frustrated he was losing offers for the past 2 years and still not getting a new house for his family. He mentioned he was working with a family member Realtor that is newer in the business and he wanted to use him to “help him out.” Uh oh. Helping a family member is always important. Buying a house is also important. But if the agent you are using isn’t experienced, he/she should partner with an agent that is experienced, so they can get some practice executing transactions! Just having your real estate license does not make you proficient in buying and selling properties. It takes years of experience, and the more properties you have sold, the better you get at the job. Plus, as my track record proves, I seem to have a pretty good knack for getting buyer offers accepted!
I asked this buyer: “Do you want to help your family? Or do you want to buy a house? Because they are two separate things.” He agreed that it was more important to get this house, and his family realtor had repeatedly proved not to be able to get the job done.
By this point in the transaction, the seller and buyer had issues with each other, and the seller did not want to work with the buyer. I asked the buyer if he wanted me to get him this house and he said, “yes!” I offered to pay his original family realtor a generous referral fee when (not if) I got the transaction done. The original agent reluctantly agreed, and we pushed forward. In this case, the original buyer was a “cash investor” that asked for a mega price reduction the day before closing. So, they canceled that buyer. Since the listing agent was a friend, I told him I would be writing up a new offer for this buyer and that I would ensure it would be a smooth, drama-free transaction. With a little persuasion, the seller agreed to work with us! Finally, with my help, the buyer was able to get his dream house in a perfect location that he plans will be his “forever house!”
My buyer was extremely happy and learned the difference between using someone that is just an agent, versus someone that is a very good agent.
GV – Scimitar – 2023 – GV has worked on my construction team for the last 4 years. One day last year I was touring a fixer property to consider buying as a flip. It was an open house and there were a lot of people there. I bumped into GV! Then he introduced me to his realtor. Seemed like a nice enough guy, he looked a little young, but that’s fine. A couple days later, I saw GV at our office.
I said, “Hey what’s going on? Are you trying to buy a house?”
GV said, “Yeah. But it’s frustrating.”
I asked, “Who’s the agent you’re working with? You know I do this right?”
He responded, “He’s a friend of friend, that’s just starting out and I wanted to help him out.”
Uh oh. Helping a friend is one thing. Trusting a new agent to get you a house for your family is a totally different thing. He confirmed that he had been looking for over a year, they had written many offers, and none were accepted. I’ve heard this story so many times now. Think about how much equity you lost from not getting your first offer accepted, months or even years ago! I asked GV if he was committed to using this realtor friend and if he wanted a house, I would get him a house. He agreed that getting the house was more important.
Within a week I found an off-market property that was being sold by a wholesaler I knew. GV checked out the home, liked it, liked the price point, and we put in an offer. I pulled some strings and asked the wholesaler to please take my offer. And I called his attorney, who’s also an attorney I use, to push to get our offer accepted. In fact, GV couldn’t put in the offer directly since they needed cash and a quick closing. I was going to buy the house first, knowing that GV would be able to buy it from me. Guess what? They got multiple offers and they accepted ours! Within 30 days of me closing, GV got his financing squared away and bought the house from me at a very small premium. GV and his family couldn’t have been happier! The first house they wanted when they were using me as a realtor, they got the house!
This story gets better. While I was in escrow, I got a call from an investor I know who said he tried to buy that house since a new ADU law just passed that would allow us to build up to 24 ADUs on the property!!! So now GV and I are working to get plans to turn his single-family home on 0.75 acres into a large multi-unit property worth over $10m! Needless to say, he’s very excited about this opportunity.
My personal home – Emerald St. 2019 – In 2019 my family just had our 3rd kid. Our 1,200SF condo with 2 bedrooms wasn’t going to fit us anymore. We needed to get a house. We were adamant on getting a house in Pacific Beach, where I had lived for the past 10 years. They passed the beach alcohol ban years ago and PB was getting progressively more family friendly. The first house we toured was on Emerald St. It was big enough, already had an ADU, was in an awesome location and we could see our family living there for a long time. Oddly enough, it had been on the market for 6 months, with the original price at $1.95m. We didn’t view it until the original agent was fired and a new one was hired. This agent was with Harcourts and was planning to use their auction strategy to sell it. It was listed at $1.275m to attract buyer attention. It caught my attention. Like most buyers, we thought we should check out a few more houses. We saw 5 more houses in the next couple days and kept coming back to this house on Emerald. This was the one we liked the best. I contacted the listing agent and let him represent me on the purchase. We offered $1.35m to start. The seller countered at $1.4m. The house was being used as a vacation rental, so it was full of furniture, TVs and more. I agreed on the condition that I get everything in the house too, which would save me $20k in buying new furniture when I moved in. The seller accepted and the rest is history! So even on my own house purchase, we were able to get the first house we wanted with our first offer.
A couple interesting points came up during escrow. During the initial listing when this house was priced at $1.95m, they received an offer at $1.8m and the seller rejected it! The day after my offer was accepted at $1.4m, was when the auction for Harcourts was supposed to start. And right after my offer was accepted, they received another offer at $1.5m! We were lucky to get into that house but potentially it was some of my skill to get it accepted! We pulled out all the tricks, including the personal family letter. When I mentioned to my wife earlier this year that this may not be our forever home, she said that if it’s not, it needs to be within one block of where we currently live! That’s how much we love our location.
BZ – Malcolm – BZ works on my construction team. He’s doing great with us and got ready to buy a house a month ago. Like most people, he knows a lot of realtors, even some good ones. But the two other guys on my construction team that used me for a purchase made it clear that he would be crazy not to work with me. From all the stories he’s heard over the years from his friends that have bought (or tried to buy), he expected to write multiple offers, get multiple rejections, fall in love with houses and be disappointed that he didn’t get his offers accepted.
That’s typically the story that most people have experienced over the last few years. Fortunately, he chose wisely to work with a pro! BZ had already been scouring the listings online and checking out some open houses. When he saw the house on Malcolm, he called me and said, “this is the one. Can we try to get it?” Well, I follow the Yoda philosophy, “Do. Or do not. There is no try.”
We started the process. He nailed down his mortgage approval. He also got a chance to meet the seller at the open house and made a good impression on her. He mentioned my name to the listing agent, and fortunately he knew who I was. We got the personal family letter ready. I called the agent to get details on number of showings, interest, and other offers. Then we submitted the offer. A couple rounds of counters for negotiations, and we had an accepted offer! BZ couldn’t believe it. It was the first offer on the first home he wanted. What was the issue all his friends were having? I made it seem so easy, why was everyone else having such a hard time?
I’m really happy for BZ and his family. I’m glad I was able to make the process easy and low stress for this buyer and all the buyers that I’ve helped over the years. Putting these stories together made me realize that I should help more regular home buyers purchase houses! If I had the same experience of writing many offers, touring many houses, having to deal with disappointed buyers as is so common in our market, I wouldn’t think the same way! Bring on the buyers, I’m going to get them their house!!!