How to buy LOW!!!
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:
1.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!”
2. “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.
3. 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.
4. 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!
5. 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).
6. 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.
7. 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.
8. 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.