Today, I went to show a home in the over $700,000 range and for the last year, there have been multiple offers on most homes that averaged well below that price, so I was rather taken aback when I called the listing agent, to ask her the status of the property. In the competitive offer environment we've been having, it's become the norm to find out this kind of information before showing property. The home had only been on the market for 5 days.
Well, she didn't waste much time; she told me they were in a multiple offer situation and the sellers were getting ready to accept one of them. She still encouraged my client to submit a "back-up" offer if they so chose, after seeing it, but that revelation was an eye opening experience for all of us, regardless. They were thinking they could submit an offer contingent on selling their home. Now, the short of it is, no matter what you're looking at, one has to be prepared to make a strong offer with a substantial investment to compete, especially if the home happens to be well-located, priced right and is in move-in ready condition. It doesn't hurt to have your financial papers in order as well, just in case any listing agent insists on a pre-approval and a submitted application from you to their preferred lender, even if you've already been pre-approved with your own lender.
Traditionally, homes in the above $700,000 price range require a buyer's home be sold first, or the buyer usually has a substantial down payment ready to invest. In any event, the local market is not just stabilizing anymore, in addition to the "multiple" buyers that were looking at this home, I've been hearing there are also a good number of cash buyers out there searching for investment "bargains". It's already been established that there is less inventory available this year, maybe because homeowners are working on loan modifications, rather than taking the short sale route. Perhaps, it's just easier to keep what they have, instead of renting and short selling. Have you priced the rental market lately?
Now is a great time for "move up" buyers to sell - because many buyers do not want to wait for "short sale approvals" and the main reason why the home above had multiple offers, was because it was a "regular" sale vs. distressed property. There are still a number of bank owned homes and short sales available, but many are taking awhile to close escrow, although they are still drawing enough interest to tweak out an increase in sales.
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