The Curve

 

 

It seems that I have a recurring experience with buyers as they enter markets like the one we’re in right now. They either have no idea what it takes to actually buy a home around here, or they’ve heard about what it’s taken others they know but somehow think that experience doesn’t apply to them. Folks typically understand that winning bids now-a-days are captured via going over the asking price but they’re often hesitant when it comes to actually writing that offer themselves. Seems natural to think like that though, doesn’t it?  Thus the fact of the matter is that there’s a learning curve when entering into this world.

One of the things I always tell buyers entering into this frenzy is that they have to expect that when they about to compete for a house in a multiple offer event it’s quite likely that they’re competing against buyers that have been doing this for 4 -6 months, have missed out on several properties and narrowed their criteria to make their offer as effortless and it can possibly be for the sellers. It’s not just the price…it’s the terms that you as a buyer are competing with. Recently, I had a listing where the buyer not only offered WELL over the asking price but also offered the following terms:

* Buyer’s took the property in “As Is” condition

* Buyer’s had 60% down payment

* Buyer’s had no contingencies of any kind

* Buyer’s had brought and inspector to the property prior to the offer date to satisfy themselves as to the condition of the house going in

* Buyer’s offered the sellers 1 months free rent after close of escrow to make sure the transition was easier for them

From a terms standpoint, that’s a VERY strong hand! When you ad in the large overbid…it’s darn near unbeatable. A very large percentage of sales now are ratifying with offers that are non-contingent. The presence of buyers with 30% down or more make the appraisal a non issue in most cases and buyers are entering into this world with plenty of confidence that they’ll get their loan with no problem. This is NOT the kind of information that folks making their first offer and prepared for in most cases. It takes losing a few homes to really take this kind of deep plunge. In the last 2 weeks I’ve seen homes in Foster City sell well over asking with no contingencies. If you’re looking here I would encourage you to take it at your own pace…but sooner or later you’ll very easily end up writing an offer like the one I mentioned above.

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