offer to purchase

Multiple Offers ~ Make an Offer They Can’t Refuse            

With California property values being at the lowest in years, a First Time Buyer Tax Credit of $8000, a Move Up Credit of $6500 and low interest rates we have seen a market that has become quite competitive. Multiple offers on properties have become the norm in the San Diego Real Estate Market.

Frustration has hit many of the buyers that are anxious to get into a home as they make offer after offer; only to lose out. The competition is grueling. Many buyers are up against investors with all cash offers or are not moving quick enough to get in the game. 

So what does it take to get a deal done? First and foremost, work with a REALTOR®. An experienced REALTOR® can help you navigate through the market, provide you with the tools and knowledge to make a competitive decision and will provide strong negotiating skills.  Your REALTOR® has access to closed comparable sales and understands what it takes to write a competitive offer.   

In putting together a competitive offer, there are some things you will want to consider:

•  Loan Pre-approval~ By having a pre approval for a loan prior to writing your offer, you will be in the best position to know the highest amount you can make your offer. In addition, many sellers are requiring that a pre approval be submitted with your offer.

•  Purchase price~ Consider looking at homes with a purchase price below the amount you are pre approved for. This will open up a wider range of homes as well as provide some wiggle room to offer more than the asking price if need be. Prior to offering more than the asking price, consult your REALTOR® to confirm the comparable sales will support the increase in price.

•  Who is your competition? With many investors out there presenting all cash, no contingency offers, be prepared to present your highest and best offer from the beginning. Your REALTOR® will be able to assist you in determining how your offer should be written

•  Bank owned property ~ Don’t assume just because the property is owned by the bank it will be an easy property to acquire.  Often times these properties are listed below market value and many people want to get a good deal. Investors are watching these properties and move quickly in order to flip the property for a profit. Be prepared to make a strong offer. This may entail offering a larger down payment or no closing cost assistance. The more attractive your offer can be, the more competitive you will be in a multiple offer situation.

•  Short Sales ~ When making an offer on a Short Sale property, understand the process. In many instances if the seller’s lender is unaware the property has been listed and requiring a short sale. The seller and listing agent will prepare a package for the lender to review for short sale approval. Once the seller has accepted an offer, it will be contingent upon the lender (or lenders if the seller has more than one loan) approval. The time period for approval can range anywhere between 2 weeks and 6 months or longer. Be prepared to wait. Understand the lenders may come back with a counter, even after a long wait period. If there is more than one lender, the 2^nd lender may not agree with the amount offered by the first. This makes the negotiation period even longer. In working with Short Sales, you will want to work with a REALTOR® that is experienced in the process.

•  Low Ball Offers ~ Don’t assume that in the current market situation it is a good time to make low ball offers. Perhaps you have been watching a property that has had multiple price reductions. Remember, you are not the only one who has been watching this. There may be any number of reasons the property has had price reductions. Work with your REALTOR® to understand the situation and prepare a competitive, attractive offer.

The more prepared you are, the more you are educated, you will be able to work with your REALTOR® and make an offer they can’t refuse!