Top Five Buyer Mistakes

1. Selecting a loan officer that's not proven or located in California - From my personal experience working with buyers, the majority of the issues in my real estate transactions were caused by inexperienced, incompetent and/or unethical loan officers.  Also, loan officers not located in California seem to be unfamiliar with standard underwriting guidelines specific to California properties.  Once you've found your home, it's up to the loan officer to satisfy the underwriting conditions and fund the loan so you can close escrow.  If your loan officer is unable to complete (fund) the home loan, then you'll lose the property.  Ideally, you'll want to use a loan officer that's located in California, a loan officer that someone you trust has used RECENTLY or the Realtor's loan officer.  The benefit of using the Realtor's loan officer is that the loan officer is "proven," that is the Realtor has worked with the loan officer to help past and current clients successfully obtain a home loan.  Also, the Realtor's loan officer is motivated to do a good job so the Realtor continues to refer him/her future clients.  Please note, my knowledge of the lending process is more advanced than the average Realtor because I was a mortgage broker for six years.  

2. Not selecting a loan officer before you start escrow and not disclosing all of your information - I've observed that loan issues usually arise when buyers do not commit to one lender before they start their search process and they do not fully disclose all of their financial, personal and employment information to the lender upfront.  Ideally, you'll want your lender to identify as many potential underwriting issues upfront and discuss these issues with you to see if they can be resolved, rather than discussing them after you've started the escrow process.  The escrow process starts after you have a fully executed (buyer and seller signed) purchase agreement (contract).  The real estate purchase process moves very quickly and you'll be given a lot of information to review and digest, so eliminating as many potential issues before you start the process will make your home buying experience much more pleasant.   

3. Selecting an inexperienced and/or part-time agent - You'll want to select an experienced and full-time agent.  Why experienced and full-time?  For example, many buyer's agents tend to steer their clients away from short sales, as a result they don't have much experience with making an offer on a short sale listing and what the short sale seller want in an offer.  Short sale offers are much different than offers on traditional listings (listings that have equity and don't need lender approval).  On my short sale listings, I've seen buyers miss opportunities to get homes they really wanted because their buyer's agent did not know how to put together a "clean" short sale offer.  Another example, if the buyer's agent is new and has not completed many transactions at all, the buyer's agent will most likely not be familiar with what a bank owned property seller wants.  Bank addendum terms are much different than standard CAR purchase agreements and you must know what's normal practice in a bank addendum and what is not.  The majority of the issues that I've had on my listings with buyer's agents come from agents that are part-time agents.  Many part-time agents are not responsive because they have to work their primary job during the day and they are not up-to-date with new disclosures and protocols.  For more information, click here.

4. Not understanding the current real estate market conditions - The real estate market is changing on a daily basis influenced by local and national economic trends.  As a result, I believe the faster a buyer can match his/her preconceptions about the real estate market with what is actually going on in the real estate market, the more successful the buyer will be in obtaining his/her goals.  How does a buyer learn about what's going on in the current real estate market...ask a buyer's agent that you trust that is actively helping other buyers to purchase a home.  The more the buyer relies on his/her own ideas/preconceptions about the real estate market, the longer it will take the buyer to find a suitable home (the buyer may never obtain a suitable home).  

5. Not doing your homework - I've observed that some buyers mistakenly believe that purchasing a home does not involve any effort on the part of the buyer.  Buyers will be given a lot of documentation to review, such as seller disclosures, reports and disclosures required by law, inspection reports, title insurance policies, CCR's (Conditions, Covenants, and Restrictions), homeowner association disclosures, etc.  A buyer must be ready to review all real estate documentation and investigate any concerns during the contingency period.  The more effort the buyer puts into the purchase transaction, the better the result will be from the long term investment of purchasing a home.