The market started heating up about 100 days ago and at this time the chances of overbidding a 100%
The salesman need to be honest - but of course they want to play it down.
The typical overbid for "real single family homes" - not condos and town homes - in what you are looking for is at least $50,000.
In some cases it is slightly less but in those cases you will find many of the deals are "all cash" and often from a contractor / flipper who waves the conditions.
If the home has any possibility of transforming a basement or large garage into a rentable space the overbidding may hit $75,000 or more.
In most cases the appraisal of the home - particularly real detached older homes (most homes in Alameda) will be 10 to 25% less than the original asking price.
In order to be successful in your bid you should be prepared to have your deposit, the cash gap between the appraisal and the asking price, and then the cash gap above the asking price.
EG: home selling for 485k sells for 535k
Appraisal value: 435k
You will need 5-20% deposit on the 435 which the bank will loan you based on the appraised value and an additional 100k in cash.
Typically you just have to keep active and keep trying. But what you've been told about the market is happening in Oakland and Berkeley as well.
The other problem that buyers are facing is the influx of all cash offers. There is just a lot of cash out there. If you work with a seasoned buyers agent they should be able to help you in developing a strategy that involves timing. E.g. historical slow trends throughout the year regardless of the market conditions.
But Quinn and Jean are both right. We are all local Realtors and are all going through the same experiences.
2 posts to read:
Current Bay Area Market NOT A Bubble: Top 5 Buyer Recommendations
Tough Year Ahead: Top 10 Issues Facing Bay Area Buyers
Like many Alameda County Realtors, I spend time almost every day writing offers. Each offer represents a clientâ€™s hopes, dreams and aspirations and, in many cases, their frustrations as offer after offer meets with rejection. While itâ€™s true that we ARE getting offers accepted, when you have one property and thirty hopefuls, at the end of the day, only one gets the keys. The remaining twenty-nine go off to the succeeding round of open houses hoping to get lucky the next go-round. While some buyers may fade away in defeat, others join in the dance bringing new energy and hope to the melee.
While house after house comes on the market only to disappear just a few days later, one constant remains: multiple offers. Itâ€™s been so long since weâ€™ve experienced a â€œnormal market in the Bay Area â€“ either we have a down market with multiple houses and one offer â€¦ or todayâ€™s red-hot market with one house receiving multiple offers. The trick is to figure out what type of market you are currently in and leverage that market to your advantage.
Since weâ€™re currently in a sellerâ€™s market and multiple offers are a given, itâ€™s important to understand the existing market metrics. In a recent meeting with Central County agents, Carole Rodoni,* President of Bamboo Consulting, outlined the following guidelines:
List Price Price per offer submitted
$200,000-$400,000: increase of $2,500-$5,000 for every offer including yours
$400,000-$800,000: increase of $7,500-$10,000 for every offer including yours
$800,000-$2,000,000: increase of $12,000-$15,000 for every offer including yours
$2,000,000 and above: increase of $20,000-$25,000 for every offer including yours
While itâ€™s obvious that there are no absolutes here â€“ every home receiving offers is different based on condition, amenities, location and a number of other factors â€“ these formulas at least provide a framework with which to begin. The fundamental key is determining whether or not any give propertyâ€™s list price is realistic â€“ if itâ€™s low, you have to adjust upwards; high, you tweak it down. Another key is trying to get feedback from the listing agent as to how many offers are either already in hand or anticipated.
Thinking of simply writing an offer at list price? Your chances in the current market closely resemble those of a snowball in a very hot place â€¦ it may look pretty for a few seconds, but will quickly disappear in a burst of steam.
*Carole Rodoni was formerly President of Fox and Carskadon Real Estate, Chief Operating Officer of Cornish and Carey Real Estate, and President of Alain Pinel Realtors.
It really depends on the property, location, condition, type of sale. We've had properties that sat on the market and the listings had to be refreshed. So no, there's no overbidding 100% of the time. And not all of them sell for over list price either.
Although inventory is still considered low, we are seeing more listings come up. A week ago, we had 35 active listings. As of this writing, we have 55. And 14 of them have been on the market longer than the three weeks, and still waiting for offers.
Take a look at this link to see the list and the sold prices of these properties. Perhaps this will give you an idea.