10 Mistakes that Buyers and Sellers Are Making in 2022

10 Mistakes that Buyers and Sellers Are Making in 2022

Hi, welcome to Living in El Paso, Texas. In this episode, we're going to talk about the 10 most common mistakes that buyers and sellers are making in El Paso, Texas, 2022. Hi, my name is John Peña. I am the founder of Peña, El Paso Realty Group. If you are

looking to buy, sell, invest in El Paso, please consider reaching out. And in this episode, we're going to talk about, basically, the housing market in El Paso, but we're going to put a little bit of a spin on it, and we're going to talk about, basically, the top five mistakes that buyers are making and then the top five mistakes

that sellers are making. So let's go ahead and jump right into it. So, buyer mistake number one, not being prepared, not understanding the market. And what this basically boils down to is, it is a somewhat of a volatile market. I mean, let's be honest, supply and demand are totally out of whack. Supply, the number

of homes available, are pretty low. Demand is very high. There are still a lot of buyers out there. And if a buyer, or at least their real estate agent, doesn't understand the state of the market, you do not stand a very good chance of being successful in that market. For instance, on some of our listings, we will have

agents reach out and say, hey, what could we have done better to make our offer more competitive? And one, you know, they might have, for an example, the buyer might have asked for closing costs for the seller to pay. This is never going to happen in this market. I mean, that shows that the agent for the buyer just has no

conception of what the reality of our market is. You know, it's very, very important if you're a buyer to have a real estate agent who understands the market. And it's also very important that you are prepared as well. Seller mistake that I see. Okay, this is a good one. Right now, it is, of course, the

seller's market. A lot of sellers think, and they make the assumption, that their house is going to sell no matter what. They don't have to do any kind of, like, deferred maintenance. They don't necessarily have to price it right. They can just price it through the roof, and it's going to magically sell. They don't

have to take good pictures, so their listing agent will come in with their phone and just snap some terrible pictures. They may not clean it up, the landscaping to make it look nice. And then people go into the home, and it's a very underwhelming experience. And guess what? Not all homes are selling, right? You,

as a seller, should not assume that your home is going to magically sell in this market. You still, your listing agent still, has to do the necessary work up front. You might have to invest a little bit of money, kind of polishing everything up, and then, of course, your home is going to sell for top dollar. But

you should not make the assumption that you can just throw your home up the way it is, ask for some crazy price, and expect that it's going to sell, because that is that is a huge mistake. So let's go back to buyers. This mistake, not working with a good lender, okay? If you're especially a first-time home buyer, you need

the advice, the guidance, and the expertise that a lender is going to give you. This is a huge part of the puzzle, because your real estate agent can't answer questions that relate to specifics of your financial situation, because we don't have a window into that world. Your lender, they've pulled your

credit, they know your debt-to-income ratio, all of these things, they know your financial position. They are in a position to make sure that you make educated and informed decisions, and that you're not caught off guard later down the road. Now, another thing with lenders is you have to be careful, because

appraisals are very, very important right now, and a bad lender is going to hire the cheapest appraiser out there, and guess what? If you get a cheap or bad appraisal, then you're going to be on the hook for potentially a bigger appraisal gap. You need to find yourself a solid lender, somebody who has great

communication skills, of course gives you good terms and an interest rate, but you really need somebody who's an expert, especially if you're a home-time buyer. Find yourself a fantastic lender. If you're looking in El Paso, I know several, so very, very important. Seller mistake. If you are not

familiar with iBuyers, iBuyers stands for instant buyers. Now, Zillow had an iBuyer program, but it failed miserably. However, there are still other iBuyer programs out there. Offerpad, to name one. There are several. Knock. These are basically corporations that will buy your house so that you don't have to even put the home

on the market, right? You avoid showings, and they say you're going to get top dollar. You have to be very, very careful. In future episodes, we're going to talk about this, but you're going to pay a lot in fees, okay? Now, one of the reasons to go with an iBuyer, people think, is because they don't have to

use a real estate agent, and they're going to save themselves a commission, which we can totally understand. However, if an iBuyer charges you more than what that commission would be, you're still on the hook. You're not going to make as much money. We've heard horror stories of iBuyers basically

demanding that an astronomical amount of money be paid for repairs, and so we will do future episodes on this, but if you're going to go with an iBuyer, make sure you really understand what those fees are, and a lot of those fees are challenging to find. They're in the fine print, so to speak. So, let's go back to

buyers. Some buyers think that they can reach out directly to the listing agent on a listing, and somehow have an advantage. Now, maybe 5-10 years ago, when it was more of a buyer's market, and listing agents were in a disadvantageous place, that was the case. We're in the opposite place now. You are, one, this is a

terrible idea. One, a listing agent cannot represent both sides. A listing agent can only represent the seller, and because of that, they are only looking out for the seller's best interest. If you, as a buyer, try to call a listing agent and say, hey, I'm not going to use an agent, maybe you think

that you're somehow going to save the seller money, but the listing agent is not going to want to work with somebody who isn't represented by an agent, because you're not going to know what you are doing. You are going to stumble through this process, and you are going to make it very challenging on the

listing agent, and there's a high probability that you won't get to the finish line, and the listing agent knows this. The listing agent wants to work with a buyer's agent who is competent, informed, and on the ball to ensure that their seller does close on the property. So, let's keep going.

Seller mistake. Oh, this is a good one. All right, not making a decision by, not waiting for the weekend to go by until you make a decision. This is insane, and I've had this happen on buyers that I've represented. This is what the normal real estate cycle is right now. A good listing agent is going to put

your home on during the week. Let's say Monday, Tuesday, Wednesday. Maybe if you don't want the home on there that long, maybe even Thursday, you could wait till. All right, so let's say you wait till Thursday, because you don't want to mess with a lot of showings. You just want to get this thing done. Put the home on the

market Thursday, get the hype going, have an open house on the weekend, and at least say you're going to wait until Sunday evening to collect all of the incoming offers. Why? Because the more offers you receive, the more chance you're going to have a fantastic offer to choose from. I've seen, I just have this,

I've seen people put a house on the market on Thursday, and then on, you know, by Saturday morning, I've reached out to confirm, hey is this home still active? What are we looking like? Oh, we executed an offer Friday night. I mean, it doesn't make any sense. Now, if a gangbusters offer came in on Friday

night, cash offer, $50,000 over, okay, yeah, that makes sense. But that typically doesn't happen, quite honestly. The the listing agent just did a big disservice to that seller by not letting that home be on the market through the weekend. The weekend is when most buyers have off from work. That's when they're

going to be excited. They're going to go around to the open houses. You're going to get more buzz. You're going to get that competition going, and you're going to get better offers. So, huge mistake. Sellers let the home be on the market through the weekend. Buyer mistake. Okay, some buyers are writing multiple offers.

Now, I can understand this because it's really challenging for buyers to get offers accepted. If you're going to write multiple offers, buyers, you need to be very, very careful because there's a chance that you could get under contract on more than one home at a time. In which case, you're going to need to deposit

earnest and option money on two homes, okay, which is going to be thousands of dollars, and it's just kind of a riskier position to be in. The next one, this is kind of for buyers and sellers both because it's very important for both buyers and sellers to know what's going to convey with the home and know what

isn't going to convey with the home. So, the rule of thumb here in the state of Texas is that if it is attached to the home, it stays with the home. For instance, let's say that a microwave is built into the cabinetry. It's physically attached to the home. It's going to stay. Curtains, they are physically attached to the home.

A water filtration unit, it is physically attached to the home. Security systems, TV mounts, right? Now, sellers, if you want to take something with you, let's say that you love the chandelier in the entryway and you are taking it with you, you need to tell your listing agent that up front so that we can

include that in the exclusions, right? And then we're cool. Buyers, you need to make sure that your real estate agent is competently filling out that non-realty addendum that says this is going to convey, this is going to convey, so that there's no confusion. We do see this sometimes. We haven't because we

don't make these mistakes, but we have heard of horror stories where, you know, a buyer purchased a home, went into the home, and all of a sudden something they thought was going to be in the home had been taken. This is not a position you want to find yourself in, so that's very important. All right, we've got two more

here. Sellers, know your payoffs. This means that you need to know exactly, your agent needs to do what's called a seller net sheet, and it's going to tell you after these fees and commissions and paying your property taxes and this and this and this, you're going to net such-and-such. Let's say that you're

going to, you believe you're going to net $80,000, right? A lot of this has to do with how much equity you have on the home, how much is left to pay on the home, but you need to understand that any liens you have on the property, whether these are tax liens, home equity, lines of credit, anything that is connected to the

home, those have to be paid off. The title company is not going to let you sell a home with a lien still on it. They're going to demand that you pay that lien off. So, you know, if you weren't aware that there was like a $50,000 lien on your property, you think you're getting $80,000 at closing, but you're going to

get $40,000. So it's very, very important for sellers to know, you know, exactly what your payoffs are. Are there any liens on the property? You need to be very honest and very upfront about all of those. And, all right, this is a good one too. Last one for the buyers. Now, there are a lot of first-time home

buyers wading into the real estate market, which is fantastic. Real estate remains one of the strongest ways to build financial wealth over time. A big mistake that first-time buyers are making, and not just first-time buyers, but maybe tentative buyers, is they're not making offers that stand any chance

of being accepted. For instance, in our market in El Paso, end of March 2022, the majority of homes that are selling for $20,000 to $30,000 over. This is a fact. Bottom line, homes in El Paso, the majority of homes, are selling for $20,000 to $30,000 over the asking price. Now, I've had several buyers that have

been making offers on homes for a long time, but they haven't been going in. Maybe they've been going $5,000, $10,000 over. Even as we try to guide them to, you know, it's very unlikely that this offer has a chance. And guess what? Over the span of a couple of months, if you just would have gone in at our

suggested recommendation of $20,000 to $30,000 over, you would have had a home several months ago. Within these months that have passed, guess what? Interest rates have raised. Home prices are rising. So, you're essentially, you know, shooting yourself in the foot, so to speak. Your goal as a home buyer is to

purchase a home. Our role in this is to guide you, to give you direction, tools, resources to do so. And playing it too sheepishly, so to speak, is not going to get you that home. And honestly, in the long run, you're losing out. You're going to pay even more. So, if the goal is to buy the

house, listen to your real estate agent, take their advice, understand, be prepared. Like we said in the first mistake that people were making, be prepared, understand the market, rule the day, get that house, live happily ever after, right? So, thank you so much. I do hope that this was useful. A lot of these

ideas, honestly, they translate nationally. So, whether you're in Austin, El Paso, you know, Sacramento, these are mistakes that are pretty uniform. And so, we just wanted to talk about it a little bit. And other than that, we hope everybody is doing well. And we will talk to you next time.

Thank you.