Ascent Real Estate, Inc.
cell (858) 405-7702
There have been a lot of good responses from my fellow agents. Good to hear.
I have to say that your friend should make the cleanest offer possible. Banks aren't stupid (although they try really hard to prove me wrong). They want the highest Net possible. That means if you friends can pay for their closing costs they should. They also need to offer above asking. In fact sometimes they need to offer well above asking. Their agent can assist them in this.
Please tell your friends to not give up. I always tell my clients that I am bound and determined to get them a a home and that I will not stop until I do. I don't care how many offers we have to write or how many rejections we get....we will not stop.
Tell your friends to stay strong and Fight, Fight, Fight...= )
Two tips that have improved my chances are:
1) Offer more than the asking price but include 3 - 4% towards closing costs in the contingencies. It looks like you are offering a lot more than you really are.
2) Don't give the buyer any time to think about it. When a house goes on the market, I try to see it that day and if I like it, make an offer immediately. I only give the seller 24 - 36 hours to think about the offer. Hopefully they take the offer before they know a cash investor will pay them more.
The reason it is so hard right now is that there are more people trying to buy homes then there is active inventory on the market, so many homes are seeing multiple offers, and yes when cash investors come in they obviously have an advantage.
DON'T GET FRUSTRATED!!! with all of the opportunities out there right now, there is going to be competition. There has never been a quick and easy way to make money without have to work for it...Find the right agent....and let us do the hard work, but it takes patience.
Feel free to contact me anytime to answer your questions HONESTLY: Justin@middletonteam.com
I'm happy to see such articulate & appropriate responses from my fellow agents!! They took the words right out of my mouth =)
The only thing I don't see mentioned here is having an agent who is willing to go above and beyond to make the transaction happen...and sometimes that means face-to-face contact. My partner, Brent, and I have been having some good luck with traveling to hand-deliver offers to the listing agent. That way, the other agent can meet us, see how professional we are, and we can start a dialogue about what it will take to get our client's offer accepted. (This applies more to short sales than bank-owneds.)
There is no doubt that today's market is a "skills-based" market. That is to say that your agent should have good, old-fashioned sales skills....and be willing to use them!
Let me know if I can assist in any way!
Kimberly Schmidt, CBR, REALTOR
Prudential California Realty
2365 Northside Drive, San Diego, CA 92108
1) The Buyer needs to be financially pre-qualified and better yet pre-approved. The pre-qualification letter that many lenders provide to the Buyer is just the first step. If the Buyerâ€™s lender can do "Desktop Underwriting" on the Buyer, this is another layer of strength for your offer. Many foreclosed properties will require the Buyer to be pre-approved by their preferred lender. This is the Sellerâ€™s way of determining if the financed deal will go through.
2) The Buyer should be willing to make a serious initial deposit on the property. I have heard of an initial deposit of $50,000 recently. It got the Sellers attention. Now not every Buyer can make that financial commitment to a property but an initial deposit check of $500 or $1,000 is not a serious down payment. The initial deposit should be 1-2% of the purchase price or more.
3) The offer paperwork should be clean, complete and perfect. All of the items the Seller is asking for should be included in the initial package. All offer documents should be typed, not hand written.
4) Dave mentioned rapport with the Listing agent and this leads me to suggest that Buyers should work with Realtors, not just real estate agents. There is a difference. Realtors are committed to the profession and are held to a higher standard of practice and ethics. It builds a great deal of confidence with my Buyers when I tell them that I have worked with the listing agent in the past on a property they are interested in. This alone will not ensure an offer is accepted but it helps.
5) Keep the offer simple. Don't ask for the sky. Especially on short sales and foreclosures the decision makers behind the scenes want to see simple basic uncomplicated offers and they will tend to accept those offers more often than an offer that has a lot of requests in it.
I hope some of these points are helpful to everyone out there interested in San Diego homes. The real estate market in San Diego is quite active right now. As of 7/15 we had just 2.2 months of inventory under $500,000. So itâ€™s not surprising that there are few choices out there. FYI... less than 6 months worth of inventory in a market area is generally considered a Sellers market. Its no wonder Buyers are having a tough time finding homes.
Mark W. Miller, Realtor
Keller Williams San Diego Metro
I would have to agree that there is a challenge in getting offers accepted, especially in situations where the listing price is well below market value, and a bidding war is being created. I have heard more than a few stories about investors swooping in on properties with all cash offers, and essentially are a "slam dunk" offer. It is really hard for anyone who is using a financing option to compete with that. Here are a few tips that I think might help.
1. With the properties up to about $425,000, anticipate that there will be multiple offers placed within a very short amount of time of that property coming onto the MLS. The agent should make every effort to show the property as soon as possible. If the property is one that the buyer wants to put an offer in on, both the buyer and the agent need to be prepared to move quick.
2. Make the offer rock solid. A lot of what is happening right now is that buyers/agents are putting out 10-15 offers on different properties and then seeing what gets accepted. In a short sale situation, the seller may accept the offer, but the bank still has to approve the purchase price and an appraisal needs to be done. This lag between seller acceptance and bank approval allows these buyers a lot of time to pull the plug before they are required to deposit money and commit to the purchase of the property. This is VERY frustrating for the listing agent, when a buyer backs out. Her agent should write a cover letter expressing her intent to see the deal through to the end, and offer a non-refundable deposit placed into an escrow account upon seller acceptance, solidifying her commitment to her offer. A listing agent will typically view this offer as a serious contender.
3. Building rapport with the listing agent, is necessary! Your offer is just another offer if there is no relationship between the buyers agent and listing agent. If the groundwork has been put in place by her agent, she should stand a better chance of having the offer taken seriously.
4. An educated and reasonable offer is necessary. As I mentioned before, there are situations where bidding wars are pushing the highest offers 10% or more over the asking price. Specifically in a short sale situation, the listing agent knows that if the offer is too high, it is not going to appraise at that high bid. Making a strong, educated, and realistic offer will catch the attention of the listing agent, as they are not necessarily looking for the super high bid, but the offer that is strong, and will most likely to complete the deal. Again, this is more specific to short sales.
I hope that these tips were helpful, and I completely understand the trouble your friend and her agent may be having. The expectation and analogy that I have used with my clients is comparing the market to a "Day-After- Thanksgiving" Sale when everyone is rushing through the doors to get one of the limited hot new products that is on sale.....ie the newest playstation or nintendo wii system...you have to be swift, you have to have a plan, and you have to be aggressive. If I can help in any way, please do not hesitate to contact me. Good luck!
Yes, the market is very competitive in the San Diego area. Mutiple agents I'm friends with who work in that market have mentioned very low inventory coupled with many buyers looking to buy. This is making it a challenge when buying properties. In other areas of California you have many buyers looking in the $300k and under price range. Homes in this range are typically either in very bad shape and no one looking to buy them, or you have homes that are well taken care of, or have even received extensive upgrades and the buyers are fighting over them. So it is very common to see multiple offers in these cases. My best advice for your friend is to find an agent with experience working with Short Sales & Bank Owned (REO) properties in the area. If the agent has several bank contracts themselves that would be even better since that would open your friend up to many properties directly. If I can be of further help with referrals or answering any further questions please let me know. Make it a great afternoon!