Nearly every dollar a homebuyer overpays traces back to the same root cause: a generic assumption standing in for a specific fact that was available the whole time. Buyers accept the average mortgage rate, instead of shopping for the negotiated one. They read the market from national headlines, instead of the absorption rate in their actual zip code, and make an offer to an assumed seller, instead of researching the real one.
Justin Santolaya, a San Diego realtor with 15 years in the business, has watched the same pattern repeat across hundreds of transactions. The buyers who pay the least are rarely the ones with the most negotiating leverage. They are the ones who replace assumptions with specifics at every stage of the purchase, because each generic assumption a buyer accepts is a place money quietly leaves the table.
A Lender Is Not a Commodity, and Treating It Like One Costs Money
Many buyers select a lender the way they select a gas station, whichever one is closest or most familiar, assuming rates and closing costs are roughly the same everywhere. They are not. Rate and closing cost structures vary substantially from one lender to the next, and a buyer who skips the comparison is accepting whatever number the first lender quotes as though it were the market rate, rather than one lender’s opening offer.
Santolaya’s first move is to interview and qualify multiple lenders before committing to one. Direct lenders such as major banks operate on their own fixed rate and cost structures. A mortgage broker, by contrast, shops a buyer’s loan across multiple banks and can move to whichever is offering the best terms at that moment.
“My recommendation is always going with a mortgage broker,” Santolaya explains, because a broker preserves the flexibility to chase the best deal even as rates shift or a buyer’s financial situation changes. Having that relationship established before house hunting begins is what turns financing from a fixed cost into a negotiated one.
“The Market” Is a National Average. Your Purchase Happens in One Zip Code
Buyers routinely absorb national headlines about whether it is a buyer’s or seller’s market and apply that broad narrative to a specific offer, without realizing the national picture can diverge sharply from conditions a few miles away. A hyper-competitive seller’s market in one zip code can sit beside a genuine buyer’s market in the next, and an offer strategy built on the wrong one of those two realities either loses the house or overpays to win it.
The specific fact that resolves this is something Santolaya calls the ‘absorption rate’, or months of supply of inventory. This is a number he says gets overlooked by a lot of agents despite being the clearest read on a hyper-local market. It reveals how tilted a given zip code is toward buyers or sellers, and by how much. In a genuine seller’s market, offers need to be substantially more competitive, structured with terms that give a buyer a real edge.
In a genuine buyer’s market, there is room to negotiate down on price or request credits toward interest rate buydowns or closing costs. Neither strategy works applied to the wrong market, which is exactly why the national narrative is the wrong input and the zip-code-level number is the right one.
The Seller’s Situation Is Discoverable, and Discovering It Is Where the Real Savings Live
The final and most overlooked source of overpaying is treating the seller as an anonymous party rather than a specific person with a specific set of circumstances. Why is the seller actually selling? How much do they still owe on the property? How long has it been sitting on the market? Is there real equity, and is there real motivation to close quickly? Each of these questions is a discoverable fact, not a guess, and each one changes what a winning offer should look like.
A seller under time pressure or carrying a low remaining balance has room to negotiate that a seller with neither does not, and an offer written without knowing which situation applies is built on a guess rather than the actual leverage available. Santolaya is direct about the payoff. The more a buyer understands about the seller’s circumstances and the property itself, the better positioned they are to formulate an offer that saves real money on the purchase.
Overpaying is rarely a failure of budget or negotiating skill. It is a failure to replace an assumption with a fact that was findable all along, in the lender’s actual rate, the zip code’s actual absorption rate, and the seller’s actual situation. Buyers who do that consistently build a real advantage. The rest simply settle for whatever the average happens to be.
If you have questions about buying strategies or want to talk through your next home purchase, reach out to Justin Santolaya on LinkedIn for guidance built on 15 years in the San Diego market.
