Jeff’s Carlsbad Blog for First Time Home Buyers


What do I do When the Seller Makes a Counter-Offer?

Posted in House Hunting,Offers,Psychological Stuff by Jeff Dowler on May 15, 2007

shaking-hands.gifThere is a very good chance that the seller will make a counter offer to your offer, unless you decide to make a full-price offer. Not too common in this market these days.

I have had a number of buyers ask me – what do I do when the seller makes a counter offer?

  • Don’t take it personally. This is part of the negotiation process. You want to pay as little as possible and the seller wants as much as possible, so you both need to find a middle ground. Unless you give them what they want, a counter-offer is normal and expected.

  • It’s good news…the seller did NOT reject your offer outright, refuse to talk further, or simply ignore your offer. So you are in the game.

  • Keep in mind that when a counter offer is made the original offer is no longer valid – the terms have been changed by the counter (although it might only be price, or closing date).

  • You have a choice to respond – with a counter offer of your own, or not. You can choose to walk away if you wish. You can accept the counter offer. Or you may accept some portion of it but make other revisions, say price.

  • In some states counter-offers must be done in writing(e.g., California has a form for counter-offers, number sequentially for each counter; in MA they typically do this verbally, at least where I worked in the Boston area).  So find out the standard protocol for your area.

  • The negotiation goes back and forth until there is a “meeting of the minds” or one or the other party backs out.

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What is MOST Important to You in Your Search?

Posted in House Hunting,Neighborhoods,Psychological Stuff,What do I Buy? by Jeff Dowler on May 9, 2007

If you haven’t figured this out yet, or given it much thought in your search, you really should.

I find that lots of buyers, when starting a search, do not have a good idea of what they want, but more importantly don’t have a list of priorities. How are you going to know that a certain community or neighborhood is right if you don’t have some idea of what is most important to you in your search?

Certainly, for most, price will be the big determining factor, and there isn’t much you can do about this. You can afford what you can. And depending on the market in your area, some communities will offer lots of options and others may offer nothing. But apart from that, what IS important?

  • Schools
  • Community Services (parks, seniors services, recreational activities)
  • Housing density (e.g., large lots, houses all line up next to each other, neighbors looking into you yard)
  • An area that is growing and changing vs a stable area
  • Access to amenities like shopping and restaurants
  • Rural vs suburban vs urban – do you want a purely residential area or a mix of commercialand residential
  • New housing vs older
  • Views – hills, ocean, greenbelts, panoramic
  • Diversity of housing vs not (e.g, tract homes)
  • Detached vs attached (e.g., townhomes, mid-rise or high-rise buildings)
  • Access to public transportation, freeways, major thoroughfares

The list could go on and on, but I urge you to give this some serious consideration before you look and buy. Some things may be more important than others, but you don’t want to not pay attention to those things that REALLY matter to you. Once you buy it’s too late.

Why Do You Bother with Open Houses?

Posted in House Hunting,Open Houses,Psychological Stuff by Jeff Dowler on April 27, 2007

This is a serious question – why do you bother with open houses?

For those of you who are not committed to buying or are not serious buyers, for whatever reason (financially not ready, haven’t made the decision, don’t know what you want, have no real interest in buying a home), I am wondering why you are bothering to go to Open Houses? Are you finding it helpful to crystallize your thinking about what you would like to buy? Are you going because you feel it’s the right thing to do? Bored and nothing else better to do? Checking out decor? Getting home decorating ideas?  Or do you just enjoy looking at houses?

I’m not suggesting that you stop going if you really want to continue, but I do wonder about your reasons and the time you are spending doing so. I would recommend a bit of self-reflection here to consider this further.

If you are serious about buying, then you SHOULD bother with open houses, if you are not doing so.There are plenty of them out there, at least in my area of San Diego, and it’s a good chance to learn as much as you can about the market. The more education you have, the better your decision making will be when the right house comes along.

If you are already committed to an agent…great. Just be courteous and show them the loyalty they are extending you, and let the agent at the OH know you are already working with someone, and provide YOUR agent’s name. It will prevent some confusion should you decide you want to make an offer. Better yet, if you know in advance about the OHs you want to attend, your agent can call the OH host and let them know you will be by. And keep your agent informed of the homes you see and what you think about them.

So, why do YOU bother with open houses?

Have a great weekend!

Are You a Lookey Loo?

Posted in House Hunting,Psychological Stuff,What do I Buy? by Jeff Dowler on April 20, 2007

open-house-sign-and-house.jpgI’m wondering…are you a lookey loo (or “lookey lou” if your prefer)? You have probably heard this moniker, but if not, it is a common one in our business. Agents, and others in the business, refer to folks who are “just  looking” and not serious about buying as lookey loos.

Lookey Loos like to come to open houses just to, well, look – perhaps they are interested in checking out how homes are designed, decorated and furnished. Maybe they are seeking ideas for their own remodeling. Some appear to be dreaming about a new and more expensive home but are not really serious – they truly don’t want to buy or are not in a financial position to afford the kind of homes they are looking at. Neighbors, of course, are always curious, too – either they haven’t been in the home or they are comparing to their own. And there are likely other reasons too. Seems like some folks have nothing better to do on the weekend so they go to open houses. Maybe it’s a hobby?

Being a lookey loo is fine. If that’s what floats your boat, that’s cool. If you enjoy spending time exploring homes for sale, go right ahead. It’s nice to let others know you are “just looking” so you don’t mislead them, however. But usually it’s pretty obvious.

My question, however, is are you acting like a lookey loo but are actually serious about buying? Are you finding it hard making a decision? Are you trying to see every possible home in or near your price range, but finding that you cannot commit to making a decision on a home that suits your personal and financial needs? Are your actions saying “lookey loo” but are you telling your agent, or yourself, that you ARE a serious buyer.

Just something to think about. If you are really interested in making a home purchase, but not making the decisions you need to, I simply suggest that you consider why this might be so. Are you wasting your time right now? Perhaps you are mentally not ready? Or are scared to make the big decision(that’s common, especially for first time buyers). Acting like a lookie loo when you ARE serious  is a waste of time. And you convey a message to others that tells them “I’m just looking” so they won’t be as helpful to you as they could. So you might not get the help you actually need.

Before you head out this weekend to look at open houses….again…ask yourself. Are you a lookey loo?

Have a terrific weekend!

Submitting a Buyer Letter with your Offer

Posted in House Hunting,Offers,Psychological Stuff by Jeff Dowler on April 12, 2007

Buyers often ask me if they should submit a personal letter with their offer, as a way of personalizing the proposal to the sellers. This is a good question, and it really depends on the situation.

I have done this successfully in a number of situations, especially when there are multiple offers being considered. While sellers are, naturally, concerned about the offer itself (especially the dollar amount), they may be drawn to a buyer whose offer is very competitive but who also submits a letter describing why they love the house, why it works for the family’s needs, and so on. Many sellers are very attached to their homes; have fond memories of loiving there, and feel a personal loss in selling. So someone who comes along that appears to love the home as much as them tends to be appealing, even if the offer is not the highest amount or full price. There is a definite psychological and emotional component of a sale for many sellers, and a letter can appeal for those reasons.

In cases where money IS the only real issue, or the home is a rental and owned as an investment, then a letter is probably not going to make a difference, since the seller only is worried about how much, rather than who.

Even if yours is the only offer, a personal letter MAY make a difference, or at least make the seller feel more comfortable about a less-than-full price offer, and therefore open to negotiation.

But if your offer is quite low, it is doubtful that any letter is going to make a difference. Money still speaks loud and clear to sellers, especially in this market. Submitting a letter could have the opposite effect – after all, if you love the home THAT MUCH, why are you submitting such a low offer?

Take a Break if You Need To

Posted in House Hunting,Psychological Stuff by Jeff Dowler on April 10, 2007

open-house-sign-and-house.jpgHouse hunting is tough, as I’m sure you are finding out.

There are lots of decisions to make, as we have already discussed – what to buy, how much to spend, what loan to use, the whole loan process itself.

And it’s very emotional. You get excited about buying, you spend countless hours on the Internet looking at homes for sale, you peruse the newspaper (perhaps), and take hours driving around a zillion neighborhoods, visit more open houses than you can count, and, hopefully, spend time looking at homes with an agent. It really IS time consuming and tiring, especially if there is a lot of inventory OR you take the approach that you need to see EVERYTHING in your price range (I do not recommend that).

If you reach a point where the process is getting tedious and you have not found the right property, it’s OK to take a break if you need to. Really, it is. Now, if you have  a deadline for some reason, such as the end of your rental or because you need to get settled before that first baby arrives, you may not be able to take the time off. But otherwise it could be a good idea for your personal situation. It helps to clear the head and sometimes a little incubation gives yourenewed energy and enthusiasm. And sometimes everything becomes very clear and you can refocus and find what you want right away.

If you do take a little time off, or slow down the process, I recommend you continue to watch the local housing market on-line in case things shift in some way, or the perfect house comes along. It happens!

So don’t feel quilty. It is feels right to continue on, then do so. But a short break may be right for you, too. You decide.

Looking and Not Finding the Right Home?

Posted in Homeownership,House Hunting,Psychological Stuff,What do I Buy? by Jeff Dowler on March 13, 2007

man-thinking.jpgHave you found that you are looking and not finding the right home? Are you getting frustrated? How many homes have you seen so far – 20? 30 ? 50 or more?

There are a number of reasons why you may not be finding the right home:

  • You are unclear about what you want – make a list of what really is important
  • You keep changing your mind – focus on what is important question-mark.gif(number of bedrooms), not the minor stuff
  • You are nervous about making a decision – this is common, it’s a big decision
  • you can find the perfect house – it doesn’t exist so stop trying to find it
  • You are being too fussy and particular – keep in mind you can change paint color, carpet and those sorts of things easily
  • You really are NOT ready to buy, psychologically and emotionally
  • The market inventory really does not match with your budget – unfortunately true for many new buyers in many areas
  • You are waiting too long to make a decision and missing out – when you delay making your decision, someone else will
  • You are being too rigid – be willing to trade off come things in order to get the features that are most important
  • You keep thinking a better home will come along, even when you find a property you really like – sort of the kid in a candy store phenomenon, but keep it up long enough and you will never get what you want

Does any of this sound like you?

If so, give some careful thought as to what is going on. Talk about these issues with your partner or spouse, or someone else who is already a homeowner. Your agent can be a good sounding board too. They can look at the situation objectively, give you some feedback, and help you get off first base.

What Are You Afraid Of?

As a first time buyer, you very likely have some fears about the home buying process, or perhaps are afraid to even take the big plunge. It may feel a bit overwhelming.

I just posted an article about the kinds of things buyers are afraid of. What are YOU afraid of? Read it here.

How Many Homes Should I See?

Posted in House Hunting,Psychological Stuff,What do I Buy? by Jeff Dowler on March 2, 2007

clouds-in-my-yard.jpgHow many homes should I see? I get asked this question fairly regularly by first time buyers.  My response is…it depends.

Well, what does it depend on? Too many houses CLOUDING your decision making?

  • How sure you are about what you want and don’t want
  • How good you are at searching on-line and ruling out homes
  • Your overall confidence in the buying process
  • What your budget is (there may be many or few choices in your price range)
  • Where you want to live (again, an inventory issue)
  • How flexible you are (what will you trade off, if anything) – or conversely, how PICKY you are
  • Your ability and comfort level with making decisions (this varies – some people are very decisive, and others need to take a lot of time before they can decide)
  • Your level of patience…or ability to tolerate frustration

There really is no right or wrong answer. I have had buyers who bought the first or second home they saw, and others who needed to see 30 or more, and it took months. The real truth is what is right for YOU.

One caveat, however. If you just keep looking and looking, and hoping the perfect house will come along, and you go on for months and months, you MIGHT want consider how serious you really are? Are you just wasting time? Are you missing out on good deals because you can’t decide? Are prices going up? Are rates going up? Don’t end up spending MORE because you took too long and the market changed.

Knowing When to Call it Quits

Posted in Financial,House Hunting,Psychological Stuff by Jeff Dowler on February 19, 2007

thumbs-down.gifAt some time in your home purchasing career (yes, there will be more than one, I can assure you), if not this time, you will need to be in a position of knowing when to call it quits.

I don’t mean to stop looking, but knowing when to say no in an offer negotiation. This is really important. It may not happen, if you make a full price offer or one that is close to asking, but in short sales, foreclosures and other situations where the seller’s price is high, or is above your budget, you need to say no sometimes. Just do it. Don’t feel badly, or quilty. But don’t get sucked into paying more than you should, or can afford. You will regret it, as so many sellers are finding now that the market has shifted.

If you are real close, then perhaps there are creative ways to reach agreement. But if not, it’s better to simply say “next” and move along.  After all, the sellers are willing to say no to your offer, or counter, or counter to their counter, so you should do the same if it’s the right thing to do. Yes, it can be heart breaking if it’s a home you love, but don’t let the emotions carry you away from reality.

Knowing when to call it quits can be a challenge. But not doing so has worse consequences. Trust me on this.

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