The 2021 Conejo Valley real estate market was one of the most competitive markets in our history. For many homes, multiple offers above asking price were common. With inventory expected to remain low along with interest rates, 2022 is expected to be similar.
Avoid these 12 mistakes and you’ll be successful in 2022…
1. Having the wrong mindset going in
In other markets, buyers would look at the asking price and expect the the seller to come down. In today’s market, for the hot homes, it’s the opposite. The asking price is just the starting point. No one really knows what a house is worth until it’s on the open market. So if it took you offering $50k over to get your offer accepted, don’t look at it that you overpaid by $50k, look at it that the home was underpriced by $50k. The sooner you get comfortable with that notion, the sooner you will be successful purchasing a home.
2. Getting close to the finish line and not closing the deal
When you’re competing against a bunch of offers, goal #1 is to make it to the counter offer stage (not every offer gets that far). At that point, it’s up to your agent to contact the listing agent and find out if you’re really a contender and what it may take to get to the finish line. It’s not easy to make it this far. If you get this close and you love the house, go all in! I’ve had buyers get this close and lose by $5k and then kick themselves for not going all the way and end up paying even more for the next house.
3. Leaving the default contingency dates in the contract
In California, the default contingency dates are 17 days for inspections, 17 days for appraisal, and 21 days for loan. Ten days for the inspection has become customary so just write that in the offer. And shortening the appraisal and loan will depend on your lender and where you are in the underwriting process.
4. Not getting full underwriting approval
The standard 21 day loan contingency doesn’t cut it any more. Getting a fully underwritten approval allows you to reduce or eliminate your loan contingency with your offer. If you can’t remove it entirely, 10-12 days is a good number to shoot for. Consider waiving the appraisal contingency if possible. To a seller, this is one of the surest ways to show you are all in.
5. Trying too hard to time the offer
Sometimes buyers want to wait and see what other offers are coming in so they can try to outbid everyone. This can backfire. Sellers often appreciate the buyer who sees the house right away and immediately makes a great offer. Also, if you saw the house on Friday and didn’t make an offer until Monday, you look like you were unsure about the house. There’s a good chance they’ve already started to fall in love with another buyer and at that point it’s too late.
6. Not willing to offer over asking price or offering too low
Nobody wants to over pay. We all get that. But if the open house is swamped, or you find out there are several other offers already, there’s no point in writing full price. Your goal is to minimally get to the counter offer stage and if it’s already evident that it’s going to go over asking price, you might as well put your best foot forward and get ahead of the competition with a very strong offer.
7. Attempting to buy a home remotely
This will not work in today’s market. If you’re competing and you haven’t physically stepped in the house, you’re not going to get accepted. A facetime tour is great, but every listing agent knows that you’ll really decide if you want the house once you come out for the inspection.
8. Waiting too long to see the house
For the hot listings, the process is often this: The home goes live on the market mid-week and the home is open on the weekend. Offers get reviewed on Monday evening. Try to go see the home as soon as possible and make your visit memorable. If you miss the weekend, you’ll often be too late and they won’t accept any more offers at that point.
9. Criticizing the house in front of the listing agent
You want to show the agent that you are so excited about the house that you would never cancel the purchase. Show enthusiasm and try to make yourself memorable. It will help you get accepted!
10. Working with an inexperienced or out of area agent
I can’t stress this enough, experience and relationships are essential in getting your offer accepted. Listing agents want to work with agents they know and trust will get the job done. Plus, they want reciprocation when the situation is flipped and they’re representing a buyer on a colleague’s listing. If your agent is from out of the area, you won’t win if it’s close. If your agent is inexperienced in this market, you’ll both be learning together what it takes to win.
11. Cancelling the purchase over something minor
If you made it to escrow, you’ve already won the most important negotiation. Don’t forget that when it comes to your request for repairs. The inspection period is not the time to attempt to renegotiate price. In the unlikely scenario something major comes up during inspections, you could always back out. But if you beat out 10 other offers, the sellers know they have backup offers and tend to have a “sold as is” mindset. But if you’re reasonable with your repair requests, most of the time the seller will be reasonable too. Stay focused on the bigger picture. The long term cost of cancelling outweighs the few thousand dollars in repairs.
12. Giving up too easily
You might not get the first few houses you make an offer on. There’s often a learning curve for buyers to go through. I can educate you about the market and what it takes to win, but sometimes it takes first hand experience and losing out a few times before a buyer is willing to go all in. But don’t give up! If you’re qualified, well represented, and willing to go all in, you will eventually get your offer accepted.
Are you moving to the Conejo Valley?
Hi, I’m Michael.
I’d love to help you get to know the area and homes for sale. And as a local Realtor®, I can help you find and buy your new Conejo Valley home!