Many buyers ready to purchase a home in the Bay Area learn very quickly that it is extremely competitive. What does this mean? It means that there are few homes for sale and many buyers who are interested in purchasing the same home. A house often receives multiple offers (and we've seen as many as 50 offers for the same house!!)
This is where many buyers get extremely discouraged. It is no secret that the sale price in the Bay Area is often far above the initial asking price (sometimes 100% over!! - how crazy is that!!), which means that prospective buyers routinely offer a much higher price for a home than the list price to "win" the home in a multiple offer situation. To add to the stress of a multiple-offer situation, homes often go into contract within days, so there is little time to make a life-altering decision. It is not surprising then that recent surveys indicate that over 50% of buyers have buyers remorse.
So, what can be done to a) be competitive in a multiple offer situation and b) still feel comfortable with the offer you're making?
Here are a few of things we always recommend:
Know the market! Yes, that's your realtor's job, but we need you to understand it as well. We will help educate you, but you cannot feel comfortable with a process you don't understand. We like to have our clients take their time. We want them to show us a home they could see themselves in and we then follow the progress of the home sale. How many offers were received. How many of them were non-contingent. How much over list price did it sell? All these data points help to understand the market better and to feel comfortable once you are ready to make an offer.
Know your comfort level. Buying a home is a big deal and it helps to know what you feel comfortable with. Don't spend more money than you feel makes sense. Don't compromise just to be done with the process. Stick to your guns and you will get a place that feels right to you in the long run (not just any home so you can close the home search chapter).
IF you are considering writing a non-contingent offer to be more competitive, opt for pre-inspections!! That way you can get an understanding of the home's condition AND you can make an offer with less or no contingencies. A pre-inspection means that you will have a home inspector walk you through the home to personally point out possible deficiencies. There is a fee for this, but it is 1000% worth it for your peace of mind.
There are so many more tips and tricks to the buying process. Just ask us to learn more.
