With the interest rates at all time lows, the San Diego County housing market for homes in the $400,000 and below is hot. Unless the house is ready to be leveled, Buyers should not waste their time with low ball offers. Even though the economy is still sluggish, signs of recovery are on the horizon. The number of homes in San Diego County dropped to its lowest level in nearly 3 years combined with a 21.5% increase in the home sales from a year ago May. In addition, the number of Foreclosures and Short Sales fell 44.8% in SoCal, the lowest level in four years. When the supply of homes is down and the demand is up, it is time to get serious with your offers.
Investors and first time home buyers are competing for the chance buy in. If you love a house, write a good solid offer that will beat out others. Even investors are competing for fixer uppers that can only be sold using cash. If the home is priced appropriately for the condition, multiple offers are to be expected. How can you make an offer stand out?
Offer a fair, reasonable price. Now is not the time to low ball the seller. You will begin to see more variable price ranges looking for a little higher than the most recent sales. The price still has to be within a reasonable range for it to appraise for the loan.
To avoid having the seller counter your offer, this is a good time for the Buyers' Realtor to contact the listing agents to ask if there is anything special they should know before writing an offer i.e. How long of an escrow would the sellers want? (30 days is the standard, but quite often sellers need longer); What title and escrow companies would the seller like to use? Make sure that all appliances, listed in the multiple listings, are to indeed remain and only ask for those items. Often houses have furnishings and potted plants that really work with the house, but this is not the time to negotiate furnishings. These can be discussed at a later time once you have your offer accepted. At the worst, you may have to find another piece of furniture or new plants, but at least you have the house.
In most standard traditional sales the seller pays for the inspection and work. Sometimes in short sales, the termite report and work are covered and other times, like most Bank Owned Foreclosures, they are not paid for by the bank.
The standard contract calls for all contingencies to be removed within 17 days. You will definitely need the 17 days for appraisal and loans. If the full loan approvals takes longer than 17 days, you can always ask for an extension. However, it is not recommended that you request the loan contingency extends until the loan funds. With no time limit on the loan approval, the lender may not feel the urgency to complete the approval in a timely manner and extend out the escrow. Although, the contingency for the physical inspections and disclosures, can be shortened 10 days. You will want to do the physical inspection as soon as possible to know if you want to proceed with the sale.
GETTING TO KNOW YOU
Quite often, in a market such as this, you will get identical offers. How are sellers to choose? Selling and buying a home is very emotional. Since the sellers have a lot of memories tied in the home, they want to like the people they are selling it to. You may want to write up a positive short biography about yourself including a photo and anything that will make you stand out from the next buyer.
Now is the time to step up and take your swing.
ABR, CRS, E-Pro, GRI, SFR
Coldwell Banker Residential Brokerage