Making an offer

Asked by Joan, San Mateo, CA Sun Nov 4, 2012

What's the best strategy on making an offer on a bank owned, short sale, or regular sale house in San Mateo, CA? Is it true you almost have to offer at the listing price in today's market?

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Maria Cipoll…, Agent, Coral Springs, FL
Mon Nov 5, 2012
A real estate agent can be a real resource when you are looking to submitt an offer on a property that you like. He/she can write a reasonable offer, based on the comparables prices of houses recently sold in that community. He/she can provide the right advice on the terms and conditions of the offer.
For example, he/she can write an offer contingent to an Inspeccion (this help you to cancel the deal if the Inspector find major problems in the property)
Contingent to Appraisal ( If the house does not appraised at the price that you offer, you can cancel the transaction).
Contingent to Financing ( If the Lender does not give you a mortgage loan, you have the right to cancel the deal and get your deposit back).

Best of Luck,

Maria Cipollone

Century 21 Tenace

2 votes
Juliana Lee, Agent, Palo Alto, CA
Mon Nov 5, 2012
A regular sale house in San Mateo has an average sales price of about 2% over asking price.

Another broad generaliztion is that the top end houses are more likely to sell below asking price than a median priced house.

Every house needs to be considered separately though. Making an offer on a house takes more "art" than math. You need to guage how other home buyers are acting, how the agent typically prices her listings, and to understand the seller.

Bank owned and short sales are different. The "seller" is almost strictly bottom line. The time to approve the sale generally works in the seller's favor. If prices fall they won't suddenly start considering a lower offer from you. If prices rise and your offer is low, they will likely ask for more money.

Juliana Lee, MBA LLB
cell: 650-857-1000
Top 3 agent nationwide at Keller Williams

Over 1,000 homes sold in San Mateo and Santa Clara Counties
Over 20 years experience
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1 vote
Philip Cabral, Agent, San Jose, CA
Fri Nov 9, 2012
Regular sale, bank owned, or short sale homes each have their own specific situation.

The three things you would have to consider most are the current market condition, the condition of the home (outdated, half updated, or fully updated), and how many offers are on the table. It is often best to have the highest offer. This is true for multiple offers as well as having the only offer.

In the last 2-3 months I have found more often than not that even offering the listing price is not adequate.
0 votes
Joan, Home Buyer, San Mateo, CA
Tue Nov 6, 2012
Thank you all for your insightful responses. You are all very helpful and I will take these into account in making an offer on a place.

Cheers America!

0 votes
Cindy Davis, Agent, San Diego, CA
Mon Nov 5, 2012
I don't know your market well enough to advise - so please do yourself, and get an agent. That said, low inventory levels have been prevalent throughout California and buyers have to write strong offers to compete.

Find out how many offers have been received on any property you are considering making an offer on...use that information to help impact your bidding price. A strong, neighborhood Realtor will make the process of bidding far easier - so again, I urge you to find someone you like.

Good luck.
0 votes
Vicki Moore, Agent, San Carlos, CA
Mon Nov 5, 2012
That's a great question.

There's a different strategy for each type of sale. Each seller is likely looking for something different. There's a lot that goes into an offer, other than price. Some of those might be terms, the relationship between the agents or reputation of your agent, the completeness of your offer and accompanying documentation. Tailoring your offer to those needs will help you get your offer accepted.

Regarding offering listing price, that depends not only on the current price of the property and how long it's been for sale but what you're offering in the way of the other items mentioned above.

Good luck!
0 votes
The Medford…, Agent, Fremont, CA
Mon Nov 5, 2012
In the current market you have to decide if you want a home OR a deal … if you are looking for a deal, then you may have missed the boat – at least for now. Those days are temporarily gone – regardless if you are looking for a short sale, REO or normal sale. Since there is so little inventory, everything decent and properly priced is being drive over asking by multiple offers.

Find a great buyer’s agent, have them run the comps (Comparative Market Analysis – CMA) on homes in which you are interested, and then be prepared to pay the going market rate. Which, in most cases, is over asking price. In some cases, WAY over.
0 votes
David Tapper, Agent, Burlingame, CA
Mon Nov 5, 2012
The market is smoking hot with inventory very low. With regards to what you should offer, it all depends on the pricing strategy by the lising agent.

If the home is worth $700K and the listing agent prices the homes for $679,000 there are going to be at least 4-6 offer and if you offer full price, you won't have a chance.

Find a knowledgeable Realtor who knows the area.


0 votes
Lance King, Agent, San Francisco, CA
Mon Nov 5, 2012
The first thing you need to understand is that process is different on each of the types of sale you've mentioned, and there are nuances within each type as well. With a regular sale there are a lot more factors that affect pricing:

seller equity position
seller motivation
do they need time to find another place
do they need to find a replacement as contingency on the deal
any emotional component - selling their long term family home, etc...

with short sales and foreclosures it's all about the money, although with any type of sale terms and positioning of your offer come into play as well, more so with a regular sale

In today's market where price lands all depends on where it starts. If priced aggressively or just under market value it will likely sell for more than ask. If priced high it will likely sit on the market and there may be opportunities there for bargains.

Your best bet is to find a reputable experienced broker/agent who is familiar with all these kinds of transactions. As the owner I've my company I've seen it all and me and my team would be happy to help.

Best Regards,

Lance King/Owner-Managing Broker
DRE# 01384425
0 votes
Diane Mcauley, Agent, CA,
Mon Nov 5, 2012
Good Question. Yes you did answer your own question, THe way market has changed you almost have to offer the listing price. Now if the property has alot of problems and you really want the property. YOu see alot of repairs, you have to decide to either ask for asking price with no repairs, or ask mabe one or two thousand below asking and then ask for some repairs. So you have to decide either lower the price with no repairs, or asking price then ask for repairs. Also you have take inconseration if you are going FHA, or Conv. Or cash. So you make sure you have good representation, and she or he knows how to negotiate on your behalf. Good Luck Diane 714 618-8031
0 votes
Bill Eckler, Agent, Venice, FL
Mon Nov 5, 2012
The best offers are those that are based on recent comparison information from the same general location as the subject property. Simply stated, nothing is accomplished by submitting an offer that is so low that it upsets the seller, resulting in them not being willing to present a counter offer.

Offers that are submitted with paperwork containing rationale supporting your offer may not always get you the response you want but it communicates the real facts to the seller, something that may be foreign to them.

Having an agent that is a strong negotiator and is familiar with your market would be a valuable asset.

Good luck,

0 votes
Tammy Hayes, Agent, Port Charlotte, FL
Mon Nov 5, 2012
Find a Realtor to work with. Have the Realtor prepare a market analysis on the home you are intersted in purchasing to see what other comparable homes have sold for within the past 3-6 months as well as what other homes are currently listed for. This will give you a better idea of what purchase price you should offer for the home.

Tammy Hayes, Realtor
Green Lion Realty
0 votes
Phil Rotondo, Agent, Melbourne, FL
Mon Nov 5, 2012
Present an offer which you believe would be accepted if you were the owner.
0 votes
Elena Talis, Broker, Palo Alto, CA
Sun Nov 4, 2012
It really depends on a large number of factors. The rules that apply to 2-bedroom condos will not be the same as 6-bedroom home on 1/2 acre. You may have better luck getting the property you want by working with an experienced local professional.
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0 votes
Taj Weldon, Agent, Tracy, CA
Sun Nov 4, 2012
Hi Joan,

Your REALTOR should advise you on each house that you are interested in.
There are definitely more buyers than there is inventory on the homes under 400k.Above 400k it gets easier to make an acceptable offer an obtain acceptance.
Foreclosures and Regular Sales are very similar when it comes to pricing and offering strategies.

My advice is to our your best foot forward when making an offer in this market .

Because of the amount of offers that properties ate receiving , you may not get a second chance to come in with your best offer

Taj Weldon
DRE 01816152
0 votes
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