Home Buying in 94110>Question Details

Carmen, Home Buyer in 94110

Bid Strategy...What percentage above the asking price will ensure that I will get the dream house I want? How much is too high/low?

Asked by Carmen, 94110 Fri Apr 2, 2010

The perfect house for me just popped up on the market. What bid should I make to ensure that I can secure the deed? It seems like buying is all about strategy, and the house I have my eye on seems low, so there will probably be a bidding war. The location is between St. Mary's Terrace Bernal heights and glen park, so not as popular as Bernal but great for me. If the house is at about 575 how much higher should I go?

Help the community by answering this question:

Answers

14
Carmen,

Asking price or marketing price is never a percentage of market value. You the buyer will set the value of the property when you make your offer.
When the market was really crazy and we'd get 40 offers for a property to win I'd tell my clients to offer what they thought it was worth to them. Pick a number that they could live with if they got it. If they wern't the winning bid they needed to be comfortable with what they offered. In othere owrds they would not have wanted it if they had to pay more.
Your agent can help you by getting information and if they don't know how to do that then too bad, wrong agent. Comparable prices for recent sales can help but only so far as to tell you what everyone else sees. Knowing what your competition is can help, but again only so far.
My observation of the market right now is that sometime the buyers are not coming out to play against each other anymore. I've heard of many properties with offer dates that had up to ten packages out an were expected to generate multiple offers but when the day came it went with no offers. Buyer's agents repeort that the client didn't want to compete.
There are other thinigs that can be done that involve selling you as the best buyer. It doesn't always mean money. Sometimes the best buyer is the one that will close and isn't the highest price.
1 vote Thank Flag Link Sat Apr 3, 2010
Jed Lane; Fog…, Real Estate Pro in San Francisco, CA
MVP'08
Contact
Carmen,

There is no magic formula to use when pricing. In today's market pricing is more art than science on both ends, and bidding over asking price can be a really bad idea unless you are prepared to lose money on resale or stay there for the rest of your life.

Pricing is all over the place right now, not in small part because of sellers who are unrealistic about pricing and agents/brokers who are unable or unwilling to get them to reality. What this means to you as a buyer is that some asking prices are set low to create interest, some high to allow for negotiations/price reductions, and everything in between.

Also remember that the highest price is not always the determining factor. There was one property we had some buyers for that we found out it was really important to the sellers that a family bought the house, so we brought the husband, wife, and their new twins around to see the property when the owner was there. Their bid won in large part because we addressed the seller's emotional need. There are a number of other factors that determine which offers get accept such as the agent/broker's presentation of the offer, ability to present you as the best choice, and making sure you have an approval from a credible lender (out of area lenders is a major reason we will advise to choose one buyer over another).

What you need is a good agent/Broker who has experience to know what things should sell for, knows how to find out as much information as possible to hone in on how many offers might come in and where they are on pricing, and how to do all the things mentioned above. Part of our program when advising buyer clients is also to discuss your exit plan if things change in your life so you don't get stuck somewhere you no longer want or can afford to be.

From your question it would seem you don't have an agent/broker yet. My best advice to you is if that is true is to find the best one you can. We are always ready to go to war for our clients and can deliver the goods, and there are many other reputable expereince agents/broker who regularly contribute here as well.

Best Regards,

Lance King/Managing Broker
lance@fixedrateproperties.com
415.722.5549
DRE# 01384425
1 vote Thank Flag Link Sat Apr 3, 2010
Good Advice.

Sine I asked the question, the bids are going out this week. There have been 15 requests for packets of disclosure, and my relator told me to bid up to 750K in order to secure it. In this economy are people really bidding up to 200 K over the asking price?
0 votes Thank Flag Link Tue Apr 13, 2010
Carmen,

I'm wondering how many buyers like yourself who post questions on Bid Strategy are working with agents who don't know the area? I certainly understand the desire of DIY (Do-It-Yourself) buyers or those who sign up with Clicks & Tricks agencies who send stats and contracts to save a buck or two. You need to ask yourself what the saving might be when you can't complete the transaction? Honestly, if you don't trust your agent's advice - You should ask yourself why you are working with them?

Ask a competent agent who knows the area, viewing many homes each. Many local SF agents are online and know Bernal very well, viewing almost every Sunday and Tuesday. Please feel free to give Eileen, Jed, Rob, Cheryl etc. or even myself a call. However If you've already signed a Broker Agent agreement - We CANNOT interfere, advise or otherwise. *(You'd have to fire your current agent first.)

Wish you much luck! Check out the link for some good neighborhood stats!

Mike Ackerman, CRS
Zephyr Real Estate - 24th Street Office
http://www.zephyrsf.com/buy/neighborhood/bernal-heights
0 votes Thank Flag Link Mon Apr 5, 2010
When purchasing any home, your best bet is to assess what that home is worth in todays market. A good buyer broker can assist you or you can do your own research. You cant base a purchase by teh asking price as you dont know if they placed a price on that property that is already at market value, way lower than market value and might sell above asking price or way above market value. Good luck with your purchase.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Sat Apr 3, 2010
Your agent should be in close connection with the seller's agent to find out as much information as he/she can get; such as how many disclosure packets have been requested or how many offers do they anticipate.
Besides looking at comparables in the area and with the information gathered from the sellers agent, you can get a determination as to where you should be with your offer.
There is no set amount up or down you should go because every transaction is different but gathering information is key plus many times it is how the offer is written.
Let me know if I can be of help.
Good Luck.
Michael Liffmann
Cashin Company
(650)307-5100
0 votes Thank Flag Link Fri Apr 2, 2010
Yes, absolutely there are strategies to getting your offer accepted. Some have hinted at what else matters besides price. But there's more you can do than just get pre-approved and write up good terms. Another huge goal is to develop trust with the Seller and Listing agent. If they trust you and your agent, and trust your intention in that you will follow through as promised, you'll bypass many who don't go the extra mile in instilling trust. So hire a great negotiator who has a plan just for you and this home, analyze all recent sales, get pre-approved for a loan (unless you have all cash) and you'll be in great shape to get your dream home.
Web Reference: http://Blog.SFisHOME.com
0 votes Thank Flag Link Fri Apr 2, 2010
Hi Carmen,

If you are working with a Realtor these are questions that he/she can guide you with. If not, then where to come in with your offer price really depends on the comps & where you feel the value is.

There is always the possibility of over bidding and getting the property vs. losing the property over stronger offers. I leave it up to my clients to make the final decision as to where they want to come in at when we are dealing with a multiple offer situation after we’ve reviewed comps (comparable sales), disclosures, pest report, etc.

Strength of an offer isn’t always just based on offer price; inspection & loan contingency time frames as well as type of loan and down payment amount also can play a role.

Seller motivation can also come into play. I’ve had buyers who came in slightly lower than higher & stronger down payment offers selected as a result of including a personal intro letter to the seller.

Lots of variables to consider which an experienced agent will help you with.

Best wishes,


Cheryl Bower, Realtor , GRI, ABR
Cell 415.999.3450
Zephyr Real Estate
Cheryl@cbower.com

http://twitter.com/SFBungalow

http://www.cbower.com
DRE#: 01505551
Web Reference: http://www.sfbungalow.com/
0 votes Thank Flag Link Fri Apr 2, 2010
Hello Carmen,

Does the property you are interested in happen to be on Bonview Ave? If so, the listing agent happens to be an agent in my office and I am very familiar with it. This particular property is a probate sale and there are some unique strategies that you can employ.

As for a bidding strategy. Like everyone has mentioned, there is no set answer. Do remember, that the home is most likely going to sell for the market value. If a particular buyer puts in an offer above asking price and has a financing contingency, there is a possibility that the appraisal will be below the offer price and prevent a loan acceptance at that price.

Feel free to contact me at peter_brunton@yahoo.com or call 415 728 5580 if you would like to discuss.

Regards,
Peter Brunton
Prudential CA Realty
One Daniel Burnham Ct. #260C
San Francisco, CA 94109
DRE 01789498
0 votes Thank Flag Link Fri Apr 2, 2010
Your agent will be the person person to advise you on this. Fair market value is still going to win out. There is little irrational exuberance left in the marketplace, to borrow a term from Mr. Greenspan. But, we can sometimes see homes still sell for 1 or 2% above what they really should sell for.

Though, there are no longer bidding wars in which a $575k home sells for $675k, unless it's grossly underpriced in order to attract a bidding war and a $675k price.

I would have your agent look for recently sold homes in the area and put together an intelligent offer. If it's truly your dream home and you'd be maddened at the thought of someone else purchasing it, maybe go 2% above what you and your agent think will be the highest bid.

But remember, it's not always the highest bid that wins. It's generally the strongest, in this market. Meaning, make sure your financing is set up, your cover letter is well drafted, and your make it clear that your intention is to follow through with the transaction, assuming the home checks out to your satisfaction during the contingency period.

I wouldn't advise going crazy, and keep in mind if this home doesn't work, there will be others, and the next one may even be less expensive, better equipped, and you may be happy this one did not pan out. Nonetheless, work with your agent to find out.

There is no standard or ideal percentage. Each real estate transaction is unique and is based upon many factors, such as the location, the market conditions, the home's condition, the amount of interest others show in the property, etc., etc.

All the best, good luck, and congrats on finding a home that will work for you. I truly hope it's becomes a reality for you!

Cheers,
Eric
Web Reference: http://www.ericmabrams.com
0 votes Thank Flag Link Fri Apr 2, 2010
Dear Carmen,

I understand your situation. I have been there, done that, lost it to a higher bitter, and quess what I ended up with my dream house. If you are not in a bitting war situation pay the asking price and lock in with a strong offer. Higher a Realtor that can assist you and guide you through this process. Find a Realtor that is familiar in the area you are interested and let their expertise work for you. Best of luck and hope it all goes well.
0 votes Thank Flag Link Fri Apr 2, 2010
Carmen--I hate to say this, but if you are not working with Realtor who knows the Glen Park/Bernal area, you should get connected with one. That individual could help strategize with you on this property. Your agent should have good working relationships with the other agents in the neighborhood, and should walk you through the offer process.

How much you offer depends on many variables; it sometimes does not mean bidding way over asking. I live about five-minutes away from the area you are mentioning, so please contact me if you'd like to talk further. Getting random advice from multiple agents on Trulia may not be your best bet in this situation. You need to have your agent find out the key information for the particular property, and go from there. Best wishes.--Eileen
Web Reference: http://insidesfre.com
0 votes Thank Flag Link Fri Apr 2, 2010
What is your agent advising--you need to be aware of recently sold similar properties in the immediate area, review the data and make your determination as to what will be a winning offer.
0 votes Thank Flag Link Fri Apr 2, 2010
It's a case by case, house by house analysis to answer your question. You should select an agent to see the house you intend to bid on. That agent should know the neighborhood and have seen most of the recent sales. The recent comparable sales will guide you to determine what the house is worth. I just closed a sale in Glen Park this week. Feel free to contact me about that. Good luck!

Shaban Shakoori
TRI Coldwell Banker, SF's #1 Office
0 votes Thank Flag Link Fri Apr 2, 2010
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer