5 Must Do’s Before Writing an Offer in this Competitive Market (Coastal Housing Talk)

This market has changed a lot over the last couple years. Inventory is slim, and buyer demand is very high. This is creating multiple offer situations and bidding wars with many listings that come on the market. Follow these 5 steps to prepare and give yourself the best shot at getting your offer accepted.

1. Talk to a lender – get prequalified at the least. Better yet, get pre-approved. This will make less work for you and your lender down the road. And it will give you a very clear sense of your affordability, monthly payments, etc. You will also know the strongest offer you can comfortably make in a multiple offer situation.

2. Know the Inventory. Follow listings on a web portal - ask your agent for access to the MLS portal so you can follow listings in your price range. The more houses you see, the better informed your decision when writing an offer. Because these listings are selling fast, you’ll feel more comfortable and confident writing a quick offer if you’ve been keeping tabs on the market. You’ll also educate yourself on values. Some agents are drastically under-pricing listings (i.e. seller is facing imminent foreclosure), which will ultimately create a bidding war and the accepted offer will be well above the listed price. This can be disconcerting for buyers who don’t understand why a full asking price offer won’t get it done. If you follow the market and inventory, then you will know yourself when a listing is under-priced, over-priced, or correctly priced. Sites like Zillow and Trulia can be used to follow listings; however, they tend to not be 100% accurate. If you’re gonna use these sites, use them in conjunction with a MLS portal account to check accuracy of data.

3. Review the Purchase Contract even before finding a property to write an offer on - spend some time with your agent and review the contract because in many cases you will need to get an offer together quickly. I’ve been with clients showing them property at 3 PM and find out the seller is reviewing offers at 5PM that evening. It’s much easier to stomach putting an offer together quickly if you’ve already familiarized yourself with a contract.

4. Don’t just focus on new listings - look at listings that have been sitting on the market, or that have just fallen out of escrow. You’ll eliminate the frenzy, and might be able to negotiate with a motivated seller.

5. Find out the details of the listing - who is the seller? how are they handling offers? what terms are they looking for? In a competitive situation, you will want to cater your offer to the seller’s preferences as much as you can, so they look at your offer more favorably than the others.

 

CHC Santa Barbara Housing Conference!

On April 10th, join me for an exciting day at the CHC Santa Barbara Housing Conference! I’m honored to be speaking on a panel discussing the opportunities and needs for millennials in our local housing market, so don’t miss out on this valuable information! ‪#‎SantaBarbara‬ ‪#‎RealEstate‬ ‪#‎Realtor‬‪#‎Millenials‬

Click HERE for more details!

Santa Barbara Weekly Market Update (7/8 – 7/15)

Housing Stats for South Santa Barbara County Last Week:

54 – New Listings

27 – Price Changes

42 – Pending Sales (that’s 6 sales/day avg)

48 – Closed Sales

16 – Off the Market

18 – Back on Market

The surge of activity continues, with 42 properties going into escrow last week. The good news is that the pending sales are actually closing, which is noted from the 48 properties that closed escrow. We’re seeing a few more new listings and properties back on the market, which actually isn’t so bad considering the slim inventory we’ve seen most of the summer.

Highest Priced Sale of the Week:

14+ acres on Roble Dr in Hope Ranch sold for $18,101,063

 

Best Buy of the Week:

3095 Eucalyptus Hill RD, listed at $1,895,000 with Village Properties

Updated and classy 3 bedroom and 3 bathroom home on over ¾ acre in Montecito. High-end and quality finishes throughout the home, with a sprawling back yard ideal for entertaining.

 

What To Do in SB this Week:

Check out the California Wine Festival down at Chase Palm Park at the beach. Beachside Food & Wine Fest on Saturday 1-4pm (VIPs 11:30am). Wine tasting on the beach is very Santa Barbara… Get the scoop here.

 

What is Shadow Inventory? (VIDEO)

Shadow inventory is a newer concept – a product of the recent financial crisis and housing crash. It’s a concept we all (in the real estate industry) have had to learn and understand. It actually affects everyone, because the shadow inventory will play a big role in the housing recovery. Depending on how the shadow inventory is handled will determine how quickly (or not) the housing market will rebound. Watch and see what all the fuss is about.

Pending Home Sales Up in March

The number of pending home sales (or homes under contract) in March is up both month-over-month and year-over-year. The Pending Home Sales Index (forward looking indicator based on contract signings) rose 4.1% to 101.4 in March. This index is at the highest level since April 2010 when it was at 111.3, and was also the height of the First Time Home Buyer Tax Credit. We’ll have to wait and see the number of sales closings in a couple of months, but so far the 1st Q closings for 2012 were at the highest levels for 1st Q closings in 5 years. We’re even seeing prices start to rise in certain areas.

Buying a Short Sale or REO Property (VIDEO)

I have so many clients and people telling me that they want to buy short sales and REO properties, because they want a “deal.” And I get that. Everyone wants a deal. But as I learned in ECON 101, there is no such thing as a free lunch. And the same holds true for these distressed properties. This video explains how the purchase process is different with short sales and REOs, and why it is important to know what to expect before writing offers on these types of properties.

 

What Would Warren Buffet Do? Load Up on Single Family Homes

In an interview on CNBC this morning, Warren Buffett took his usual stance of buying equities as an attractive investment right now. But what we don’t usually hear from Buffett (or anyone these days, really…) is his advocacy for buying single family homes as an attractive asset class. Buffett said about single family homes, “…I would load up on them and I would take mortgages out at very low rates.” His reason for not actually doing so is that it would be difficult to manage a couple hundred thousand single family homes. But his advice for young investors thinking of investing in stocks or buying a first home: “If I knew where I wanted to live the next five or ten years, I would buy a home and finance it with a 30-year mortgage. It’s a terrific deal.”

Watch from 5:08 – 6:45. Actually, the whole thing is good if you have 20 min.

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