A day at the office is really more like a day at the beach for Josh Altman, star of Bravo's "Million Dollar Listing" and one of the leading real estate agents in the industry, moving luxury properties at Hilton & Ryland Real Estate in Beverly Hills, Calif.
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Specializing in high-end properties, his clientele consists mostly of entertainers, athletes and high net worth individuals from around the world. A few of Altman's recognizable clients include Paris Hilton and Kim Kardashian, whose closed deals have helped put Altman on track to hit the unimaginable pinnacle of $100 million in sales in 2012.
He's been heavily involved in all aspects of real estate since graduating college a decade ago, flipping over 10 homes and running his own real estate finance company before teaming up with his brother, Matthew, at Hilton & Ryland Real Estate.
Altman's high-octane career has given him an inside look at real estate trends and the costly mistakes homebuyers make. So we sat down with him to pick his brain. Here's what he had to say:
CreditCards.com: What role are you seeing credit scores playing in the homebuying market these days?
Altman: They're so important. It's unbelievable, but credit scores still hold as much weight as they always have. In general, banks seems to be loosening a little from their stance of a year or so ago, but buyers still need a "7" in front of their score or they can't get what they should get [in terms of a good interest rate on a home loan]. When I was in the mortgage business, buyers could get away with a score of 660 or 680 and still get decent loan rates. Now you can't. You can get away with having a score that low and may still get a mortgage, but it's going to cost you greatly.
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CreditCards.com: How important would you say it is for people considering a new home purchase within the next year to keep an eye on their credit report and score?
Altman: Very important. Something I really wish would be taught in high school is the importance of your credit score. People don't realize how important credit is until they're ready to buy their first car or piece of real estate and pay more for loans because of poor credit.
CreditCards.com: Since that's not often taught in school, where did you learn the importance of caring for your credit?
Altman: I was lucky that at a young age my dad sat me down and explained how this three-digit number makes the world go round. He stressed that one little mistake like paying bills late or not at all can get you for two or three years at least.
CreditCards.com: Are you finding it is still hard for people to qualify for home loans these days?
Altman: In general, if a buyer has good credit, that will help them get the house. But in the past few years, deals aren't really coming down to credit scores; it's more about the price. It's a competitive market, so a good property will go fast if it's priced correctly.
CreditCards.com: What financial issues or stumbling blocks do you see facing first-time homebuyers?
Altman: Having eyes bigger than their wallets. People always think they can afford more than they can qualify for. And when they can't qualify for the huge mortgage, they're typically surprised at the amount they do get qualified for. Many first-time buyers just don't know about or understand the equations the banks use, like the debt-to-income ratio, to determine how much a person can qualify for. They think because they make X a month, or have X money left over after credit payments and car loans each month, that's the amount of a mortgage they'll qualify for.
CreditCards.com: Of course, not everyone can afford the listings you have, so what should people just starting to search for their dream house do -- even if it isn't a million dollar listing on the ocean?
Altman: I think the most important step is getting prequalified immediately before searching. That way you won't search for a house that's out of your price range or fall in love with a house that you later learn you can't get a mortgage for. That's very disappointing for everyone.
It's also important to not to buy emotionally, buy for the investment. Typically, first-timers are so excited when see a house they love, they tend to pay a little more because of the emotional connection. They're excited, it's their first house. It's usually their biggest investment to date. When you fall in love with a house, you lose the chance to have the upper hand in the negotiation process.
And last, don't be afraid to lowball a property. Sellers shouldn't take offense to a lowball offer and neither should the buyer. It's all business.
CreditCards.com: What are some tips to negotiate and get a house at your price?
Altman: Do as much research as possible. Know the history of the property, what's it been bought and sold for, what upgrades have been done, how much is owed on the house and why it is on the market -- are the owners divorcing or relocating? That all comes into play and can dictate how willing an owner is to negotiate.
I live by "everything is negotiable." What we're seeing in the industry is, because of the economy, nothing is set in stone. All rules are out, so it can't hurt to ask a seller to pay for the inspection, closing costs, etc. The worst they can do is say no.
CreditCards.com: What mistakes did you make buying your first house?
Altman: I think I've bought eight houses in eight years and made profits on all except the last one. That last one, not the first one, is the one I made a mistake on.
I bought that house emotionally. When I walked in, I thought it was the coolest thing ever and lost everything I had learned about keeping your emotions in check when I walked through the front door. As a result, I found myself overextended where I typically wouldn't be -- all because I had to have that house no matter what. Because I let my emotions get the best of me, I ended up selling the house a year later that I had to take a loss on. That's proof that even the experts pay too much for a property if emotions aren't kept in control.
CreditCards.com: How do you advise clients to keep their emotions in control when negotiating on or shopping for a new home?
Altman: To use a poker phrase, don't show your cards. You'll look desperate if you show your cards and let the seller know you're in love with the property.
You have to remember that in the moment, even though you might think it's your dream home, there are 10 other dream homes out there. Dream homes are like a bus, if you miss one, another comes by 10 minutes later. There are many to choose from, so you should continue looking even after you've found your dream. And don't get too attached to a house until you've closed on a deal you can afford -- that's one sure way to pay too much because you get into a 'I've got to have this house or else...' thought pattern. That can get costly