If you are looking for a home in the Conejo Valley and surrounding area under $1,000,000, expect to be competing against other buyers.
Truth is, it’s a Competitive Market
Over the last several years, we have seen the inventory of available homes plunge. When a well priced home hits the market, it often sells within days.
I say this not to discourage you, but to prepare you for how to win in a multiple offer situation.
Here are some tips:
1. Get Pre-approved for a loan – You absolutely have to have an iron clad pre-approval and all your ducks in a row to even be considered. Chances are you may be competing against all cash buyers or buyers with large down payments. You have to be ready to compete with a strong pre-approval and an offer presented by a well respected and knowledgeable agent to have a chance to win.
2. Be prepared to pay over asking price – This is not always the case, but quite often, homes with multiple offers sell above list price. Mentally prepare yourself for that. However, the purchase contract does protect you from over-paying. If the home does not appraise for the sales price, you can cancel the deal and get your deposit back. (Read: What Happens if my Home Doesn’t Appraise)
3. Most likely, you won’t know much about the other offers – The listing agent (who represents the seller) is under no obligation to let the other parties know any details about the offers. However a good and savvy buyer’s agent can often extract some critical information from the listing agent to guide you in your offer.
4. Appeal to the seller’s emotional side – Unless you’re buying a bank owned property, real estate transactions are based on emotion. Sellers want to know a little about your personal story and why you want the house. They also want to know that you really want the house and you’re unlikely to cancel. Use that to your advantage and have your agent include some personal insights on who you are and why the home is a perfect fit for you. It’s harder to say no to an offer from a real person versus other offers that are just names on a page.
5. Get Creative – Shorten your inspection period, pay for some items that the seller normally pays for, don’t ask for a home warranty policy, waive the appraisal contingency, shorten your loan contingency (see #1). You don’t have to do all of these things, but a couple of them (depending on what’s important to the seller) can really make your offer stand out.
6. Your agent is equally (if not more) important than you – I have beaten out higher and stronger offers many times simply because of how I presented my buyer and the offer. I’ve gotten my offer accepted because the agent that represented the seller preferred to work with me because she knew I would preform in a timely manner and I wouldn’t cause headaches for the seller. I’ve gotten my offer accepted because I’ve been doing this a long time and I had a relationship with the other agent.
You can have an all cash, non-contingent offer that can close escrow in 14 days, but if your agent is careless (doesn’t return calls right away, has errors in the purchase contract, etc) you will lose. This is not the type of market where you can afford to have a friend or family member who sells real estate on the side represent you. You will end up frustrated and homeless. (Read: Why You May Be Losing Out in Multiple Offer Situations)