The Bidding Wars are Back!
Your Guide to Landing your Dream Home
The Long Beach area real estate market is sizzling and buyers have to beware or they may get burned… or burned out by unsuccessful bids. With very low inventory, the market is currently very favorable for sellers.
So as a buyer, how do you win the bidding war?
First of all, it’s important to know that the cards aren’t all stacked against buyers. Mortgage interest rates are currently at historic lows. Furthermore, it’s now possible to buy a home with a down payment of less than the 20% (or even 10%) that is typically considered standard. Though it’s still a strong sellers market, low interest rates mean that it is a good time to buy a home – if you can get your offer accepted.
How do you do that?
- Understand the Market & Offer Accordingly – This is not a time to come in and make a lowball offer on a property that just came on the market. Depending on pricing, a full-price offer may not even be competitive. Make sure you look carefully at comparable sales so you have an idea of what a home will realistically sell for – and appraise for. That being said, if a home is overpriced and has been sitting for a while, there are still opportunities for negotiation. How will you know? You need to…
- Work With a Local, Full-Time Experienced Agent – In a market where homes are moving quickly, you need – and deserve – a local agent who sells real estate full-time. You want someone who will package and present your offer professionally. Also, there is a benefit to working with an agent who is established in the area you want to live in. They may know of homes that are about to hit the market – and they may have relationships with listing agents on homes you’re interested in. Listing agents like working with another agent they know is professional and responsive.
- Have Your Ducks In A Row – You need to already know where your down payment is coming from and have it in the bank, along with “proof of funds” you can provide to the buyer. You need to already be pre-approved.
- Work With a Local, Reputable Lender – A loan officer who is established in your area may have worked with the listing agent in the past and that could help weigh in your favor. Out-of-area or out-of-state lenders may not understand area customs and time frames and certainly won’t have relationships with any of the other participants in the transaction. Getting pre-approved with a direct lender is a big plus.
- Understand That The Type of Financing Matters – Cash is king, but cash buyers may not want to pay top dollar so you do have a chance even if you need to get a loan. Conventional financing is usually a plus with sellers, with VA and FHA being less desirable from a seller’s standpoint. Why? That’s because these government-guaranteed loan programs may require that the seller take care of any property deficiencies, ie if there is a patch of peeling paint on the exterior. Additionally, sometimes sellers feel that buyers putting more money down have more “skin in the game” and there may not be as big an issue with the appraisal.
- Figure Out What Else Is Important to the Seller – Have your agent ask if there’s anything else that would help make your offer more attractive to the sellers. Do they want a long escrow? A short escrow? An opportunity to rent-back the property after escrow closes? If so, include that in your offer.
- Add a Personal Touch & Write A Letter – Look around the house while you are there for clues to the owner. No, you’re not going to open drawers or go through cabinets. But if there’s a diploma on the wall for your alma mater or a pennant from your favorite team or a picture of their wedding in Maui and you got married there, that’s a common bond. Write a letter to the sellers. Tell them a little bit about yourselves, why you love the house, and why you’d like to make it your own. If there is a common bond, mention it. Make the letter from the heart, not simply generic. People can tell the difference.
- Understand that Time is of the Essence – This is a market that’s moving quickly. If you see something you like, you may need to make a decision very quickly. A great way to stay on top of current listings is through our home search app. Unlike may home search tools, our app is 100% accurate and updates in real time so you no longer have to worry about looking at a home online that’s not actually for sale.
If you have any questions about the current market, please give us a call at 562-896-2456 or fill out the form below and we’d be happy to answer your questions.