In my experience, the mistake buyers make in this kind of market is waiting too long.
My mentor, Leslie (who owned 60 houses in Silver Lake), always said, “Don’t wait for the average price to come down—be the buyer who pulls down the average.”
In other words, make the great deal, don't wait for it.
Our clients are buying below-market homes, and typically how they do it falls within the below three scenarios.
The first is where the listing agent just fumbles the rollout:
- Bad or no staging
- Poor presentation (bad photos, no pre-listing upgrades to the home)
- Hard to show (no opens, no lockbox, agent who doesn’t answer their phone, etc.)
- No offer deadline, the house is underpriced, sellers accept the first offer they get
The dead giveaways here are bad pictures and spelling mistakes in the description. When you see those things and there’s a weird smell, don’t worry, that’s the smell of money.
The second is when the agent approaches the price from the wrong direction (i.e., from above).
We just saw a house in our neighborhood sell for under $4mil. It had been shopped off-market for $7mil, listed for over $5mil, then reduced twice. Buyers swooped in after it had been on the market for months and got it for less than the reduced price.
If the sellers had listed at the lower price originally, they would have had a bidding war.
The third is “back on market” homes, meaning, the house was in escrow and the buyers cancelled. That's when people start asking “what's wrong with it?” and unwisely passing.
In all these cases, you'll likely find you are the only buyer. This is good!
Don't get worried that no one else wants it - it's a sign of the market, not the house.
The trick is to get there FIRST. Buyers are just waiting on the sidelines to see if anyone else makes a move - big mistake. Get in early and get a deal.
Remember when multiple buyers are in the deal, you’re not negotiating…you’re competing.
After all, it’s hard to drive the price down when you just won a bidding war and there are three back-up offers.
