How to BUY LOW! Winter/spring 2017
When prospective homebuyers warn me, “We’re only buying if we can get a great deal,” I want them to know: I AGREE!
Deals CAN be made, but the overall climate is a Seller’s Market, or a “Neutral” market, depending on price, location and condition of the home. Good-quality homes in the low-to-mid price range sell very fast.
Back in 2012, the Buyer’s Market ended and the greater Sacramento region has enjoyed a robust rebound. In recent years, we’re consistently in the Top Ten “Recovering” markets.
Housing inventory is low. Zillow and other home-value websites predict that home values will increase in the Foothills (Auburn-Meadow Vista-Colfax) area by 3% to 7% over the coming year.
LOW offers are best when they’re STRONG in other ways - - - raising the odds of acceptance. This means:
- Time is of the essence. If a new listing is well-priced, ACT FAST ahead of other buyers. Sellers with multiple offers tend to respond as if they are in the driver’s seat, but this doesn’t mean “don’t bother!”
- "Cash is King." If you have access to cash, you have leverage. Do you have a HELOC (home-equity line of credit) on another property? Consider using it to buy fast, and obtain a mortgage later if necessary.
- Most homes are bought with a mortgage, of course. Be sure to have your lender pre-qualify you . . . or better yet, get fully pre-approved by completing the application process prior to finding "The House." We can introduce you to several excellent lenders who give our clients consistently great service . . . and when we submit your offer, this approval from a proven local lender can boost a seller’s confidence.
- Put forth a meaningful deposit (at least 1% to 3% of the total offer price). Remember that this "good-faith" deposit must be refunded if a buyer cancels during your initial "inspection contingency" period, the first 17-days in the standard California purchase agreement . . . but keep reading!
- Offer a short closing date (30 days or less). If you're buying with cash (or your lender has pre-approved you), a powerful strategy is to offer a close of escrow in 10-20 days! This is most effective when buying a vacant home. For an occupied home, consider closing fast while offering a “rent back” agreement with protections to avoid post-closing hassles for YOU, the short-term landlord (ask for details).
- The hardest-charging negotiators ask for NO repairs or cleanup! While I strongly encourage all buyers to thoroughly inspect their purchase using suitable professionals, sellers want an “As Is” buyer and will usually favor such offers.
- Offer an inspection contingency period shorter than the standard 17 days. I know and recommend multiple responsive professionals who often provide through inspections in just a few days.
- When buying a bank-owned or “REO” home, ask to see my article, “How to buy a bank-owned property” to help manage your expectations and WIN in that game. Realize that banks do not behave like desperate sellers! It’s true: they have no desire to hold a property any longer than necessary…but if you try to circumvent the “REO Rules of the Road,” you’ll probably come up empty-handed.
All of these strength-builders can sweeten the taste of your "lowball" offer. Call me when you’re ready to deal!