Your Buyer Has the Down Payment but NOT the Closing Costs • Alex Maldonado

Keeping It Real Podcast • Secrets Of Top 1% REALTORS ® • Interviews With Real Estate Brokers & Agents

In this episode, host DJ Paris interviews Los Angeles realtor Alex Maldonado about navigating the challenges of first-time homebuyers who ha

Key takeaways

• Use seller and lender credits strategically to cover closing costs without making offers uncompetitive.
• Optimize Google Business Profiles by ensuring the DRE name matches exactly and using SEO-optimized keywords in titles.

Main topics

• Closing cost strategies for first-time buyers
• Google Business Profile optimization

Notable quotes

People don't care about you as a realtor or as a person. They care about themselves. What can you give them?

Conclusion

The episode serves as a practical guide for real estate professionals

Transcript preview

Speaker 1 (0:00) Your first time buyer saved the down payment, then closing costs come up and the whole deal stalls. Today's guest is a Los Angeles agent who gets those buyers to the closing table anyway by writing seller credits into offers without sinking the deal. He's also spent 10 years building lead gen for law firms, and he's going to show you what's broken on your Google business profile. Stay tuned. This episode of Keeping It Real is brought to you by Real Geeks. How many homes are you going to sell this year? Do you have the right tools? Is your website turning soft leads into interested buyers? Are you spending money on leads that aren't converting? Well, RealGeeks is your solution. Find out why agents across the country choose RealGeeks as their technology partner. RealGeeks was created by an agent for agents. They pride themselves on delivering a sales and marketing solution so that you can easily generate more business. Their agent websites are fast and build- for lead conversion with a smooth search experience for your visitors. Real Geeks also includes an easy-to-use agent CRM. So once a lead signs up on your website, you can track their interest and have great follow-up conversations. Real Geeks is loaded with a ton of marketing tools to nurture your leads and increase brand awareness. Visit realgeeks.com forward slash keepingitrealpod and find out why realtors come to Real Geeks to generate more business. Again, visit realgeeks.com forward slash keepingitrealpod. And now, on to our show. Today's episode is brought to you by Corded.io. Are you looking for agents to join your brokerage or team? Now, as a real estate recruiter, I can tell you the answer is always yes. but most agents aren't looking to move right now. So how do you know who to contact? Well, what if I were to tell you there's a recruiting and retention tool powered by artificial intelligence that shows you exactly which agents in your local market are looking to leave their brokerage right now and which agents at your own firm are also looking to leave you. Now, I've been recruiting realtors for 15 years and I've hired over 2,000 agents. I can tell you with no exaggeration, this is the tool I've been waiting. for. Corded's AI looks for trends across dozens of variables for each agent in your market and shows you which agents they believe are likely to move. Not only does it do that, but Corded's AI went and visited my recruiting website and read everything I offer. So now when I'm recruiting, Corded's AI tells me exactly what to say. based on that agent's needs and what my brokerage can offer. It even writes emails for me. I've never seen anything like it, and I use it every single day. Now, if you are looking to grow your brokerage, Corded.io is the best tool out there. Visit Corded.io to schedule a demo. Again, that's Corded.io. And now, on to the show. Speaker 1 (3:10) Welcome to Keeping It Real, the largest podcast made by real estate agents and for real estate agents. My name is DJ Paris. I am your guide and host through the show. And today is my guest is Alex Maldonado from Los Angeles. We're going to speak to Alex in just a moment. And I want to tell you more about his background before he comes on. A little bit about him. So he is a Los Angeles realtor with Circle Real Estate. He serves the South LA, East LA, Northeast LA, and Long Beach. He works closely with the Hispanic community, first-time and first-generation buyers, and also professionals looking to build wealth through real estate. And a lot of his work is helping buyers who have the down payment saved, but not the closing. the deal closed. So real estate, Alex also owns Maldonado Marketing. We have a special gift for our listeners, first come first serve, which I'll talk about in a second. But his marketing agency is an agency that builds marketing and lead generation systems for law firms. He also has more than 10 years of marketing experience. He's Speaker 2 (4:15) a Speaker 1 (4:15) UCLA grad, works with clients in both English and Spanish. And his goal is very simple, get more LA families from renting to owning without any surprises along the way. So I'd like everybody to follow Alex on Instagram, which is yourrealestateman.alex. So yourrealestateman.alex, link to that in the show notes. And then we also have a giveaway that I'd like, again, it's first come first serve. Not everyone will be able to do this, but... I want you to go to maldonatomarketing.com forward slash agents. It's specifically for listeners of our show. Check it out. And he's going to be able to give you an audit on some of your Google business and just other things that you want to know about your brand. He's going to take care of that for you. So again, limited, but first come, first serve. So maldonatomarketing.com forward slash agents. Alex, welcome. Welcome to Keeping It Real. Speaker 2 (5:13) Of course. Thank you for having me, DJ Paris. Speaker 1 (5:16) All right, sir. All right, let's jump in. So I was checking out your website, which I really like, by the way. And it talks about how you watched your own family navigate through the LA market really without much guidance. And what did that look like from your vantage point? And what's the one thing you wish somebody would have been able to help them do? Speaker 2 (5:42) Yeah, so regarding my family, I'm just going to give a little background, but my family moved here around like the 90s to Los Angeles. And regarding moving here, they've been here all this time, and they had the ability to be able to purchase home very early on. They got paid well, they had the income, but they never had the resources for someone to actually be able to help them to do so. So it wasn't until actually 2016 that they purchased their first home, which, you know. it's probably like 20, let's say 26 years, they would have already been able to pay off their home if they had purchased back in the 90s. But they never had that resource for them. And that's the main reason I got into real estate because I want to be that resource for other people. I want to help other people achieve home ownership very early on so that they can achieve patrimony for their family and build wealth. Speaker 1 (6:37) Yeah, I think that's so true. I know for me personally, I was in a similar position as your family and so many people are where they actually do have the resources to purchase much earlier than they realize. And I think as real estate agents, we sort of forget that, that sometimes people just don't know until they know. And often it's much later than they could have been told. So I couldn't agree with you more. I could have bought several years before I did. I had no idea I could. this is, I think, a really important point to our audience is that we think everybody knows things because we're in the business all day long. And the reality of it is everybody renting should really have a conversation or somebody should approach them to have a conversation about, hey, what are your plans? Would you like to buy? And then let's help you figure out a plan. And I know you do that. So I really am glad that you mentioned that because I think it's an easy thing for us to forget. Now, I want to very specifically I know you work with a lot of buyers because you are obviously helping people transition from renting to buying. And the down payment, they oftentimes have that saved. But as I said in your intro earlier, that the closing costs sometimes are the big surprise. And most people, we don't talk about that ever. We talk about down payment. I hear that all the time. But we don't talk about closing costs. And that is a really important topic. Maybe it's the first time in our history of our show that we're ever talking about it. So I'm super grateful that you talk about it. So how do you find out with one of these first time buyers sort of where they're at? How do you assess their down payment versus closing costs scenario? Speaker 2 (8:24) Yeah, so whenever I meet with a client, you know, I ask them like, what is your motivation for wanting to buy? I first get to the root cause of it because everyone has a different motivation for wanting to be a homeowner. After that, you know, after a while of talking and building some trust, I asked them regarding their finances because it is going to play an important role into the purchase of a home. So just one buyer that I'm working with right now, she has enough for the down payment and probably let's say around $4,000 more. And she has nothing for closing costs. So I work with a lender that, you know, she offers like lender credits when working with different lenders. And what we're doing is we're getting them lender credits while at the same time writing into the contract that the seller gives the seller credits. And that's basically what we do to get them covered. And every situation is different. But, you know, if as long as they have the three and a half percent or can get it from family members or other resources, we're able to help them achieve homeownership. Speaker 1 (9:27) It is crazy how, and look, I'm lucky enough to be a beneficiary when I bought my first condo that my parents were able to assist me with the down payment. And we forget that people like 30 some percent of all first time home buyers, and that number might even be low, get assistance from their family. So we tend to look at somebody's individual, you know, assets and forget that like, oftentimes, as you say, you know, they're, if they're lucky enough to have family members that are willing to contribute or are able to contribute, then that often helps. And I wanted to really quickly go back to rentals just for a moment, because I'm curious, I don't have this in my normal questions, but I know living in Chicago, you're in LA rentals are, if you're not buying, you're renting, obviously. And most realtors, often tend to not want to work with renters. I mean, if you want to do a luxury rental for 10 grand a month, everybody wants to do that. But for people, you know, normal working class people who aren't spending a fortune in rent, but realtors often ignore them. And I always think what a missed opportunity. Not that you should work with everybody. You should obviously have your niche, know who's, you know, you know. sort of the amount of money you want to make and does this fit in. But these are people that if you educate them correctly like you're doing, these are people that no matter what their circumstances, they were going to be buying at some point in the future. So I'm curious, do you help people while they're renting or do you tend to catch them right at the tail end of that when they're ready to start buying? Speaker 2 (11:06) Yeah, that's a good question. And regarding that, so I've built a referral network where people refer me, people that essentially are in different stages of the home buying process. Some might just be wanting to ask questions. Others might be already willing to want to purchase. So they're at different stages. But what I do is that I follow up with them. I build a relationship and I continue building that relationship. And once they're ready. then I help them with home ownership. And the people that are ready, you know, I sit them down, I explain the process, and I let them know exactly how things are going to go down. And that's very helpful for them because, you know, sometimes they lack that education or like that information to be able to assess whether they actually can afford home ownership and just being able to answer their questions and answer their questions simply and effectively it's very important because you know a lot of the times they have questions that we as agents like we know the answers to and we think it's very simple but they are not in the industry they do different things they might be a nanny they might like work in the auto industry or in some capacity they might be work in the service industry so they're not very much well informed when it comes to real estate and we see these things as simple things but for them they don't know the answers to these questions and it's just about informing the public and the community regarding this Speaker 1 (12:35) and i imagine too it probably happens where some of these people takes years for them to get into the right financial position to be able to buy and you're the guy because you've been helping them this entire way Speaker 2 (12:49) Yeah, of course. So what I do is like, you know, I also offer like a budgeting course for the people that don't have the money for it. So I sit them down. I look at their finances if they're willing to share it, of course. That's the stipulation for the budgeting course. You have to be willing to speak openly about it. But I said I helped them set a budget for saving to be able to achieve homeownership within two to three years. And if they follow that plan, then they should be able to afford it within that timeline. Speaker 1 (13:19) Yeah. I want to talk also about managing expectations for first-time buyers, because again, they don't know what they don't know and it's not any fault of theirs. But you had a story that I thought this is a very common sort of story where we have a buyer that has slightly unrealistic expectations. Their heart's in the right place. They want to do all this cool stuff and maybe their situation just doesn't allow for that. So you had a buyer really was set on one neighborhood that she couldn't afford. And every listing she sent you was cash only, but she was an FHA loan buyer. So at what point did you tell her, hey, this is the reality? And what did you actually say? How did you actually break that news? Speaker 2 (14:03) Yeah, so, you know, I broke that news slowly over time. It has to be done slowly. You can't just like rip the bandaid out because, you know, they're in a very difficult situation for them to understand. But what I started with the process is that whenever I sent her listings, I would send her the closed listings for that specific neighborhood, which was Lakewood. And properties were closing at like... $850,000, $900,000, and her budget was around $750,000. That's what her budget was. So just letting her know what the properties were closing for was really important. So she was able to assess her situation. And every offer, every property that she would send was a property that was over her budget, and it was all cash. So I had to make her aware that like a lot of these properties that are under valued, they're undervalued because they're wanting out cash offers. Speaker 1 (15:02) Right. Speaker 1 (15:06) Well, that's, I'm glad that you mentioned that you do it slowly and over time and not to shock their system, you know, really being empathic towards, hey, this is something that's going to land pretty heavy. So I need to figure out how to, you know, say it in a way that she's able to digest and understand without being, you know, completely. disillusioned, right? So I want to talk about FHA loans just for a moment. So on an FHA loan, seller can cover up to 6%, I believe, of closing costs, something like that. With a conventional, with under 10 % down, it's only 3 % they can cover. So in a market like LA, where you are competing on price, how do you go about asking for a credit without your offer, like just getting pushed to the bottom of the offer pile? Speaker 2 (15:56) Of course. So basically what's important to the seller of the property, it's always going to be the net money they make on the property. So if the net money isn't at the highest and if the terms aren't the best, then they might not want to pursue accepting that offer. So what I do is that regarding credits, I always build it into the contract and the offer. So essentially, if we know we're going to need $6,000 in credits. then we would know that we have to come in a little higher in order to offset those credit costs and also um what we also do is set like um good terms so if we know that um the offer is maybe not the strongest we put three percent um earnest money deposit to make it more show more willingness and more interest on