When You Snooze, You Lose! And Even if You Don’t Snooze, You May Still Lose!

By
Real Estate Agent with eXp Realty of California, Inc. CA DRE #01490977

When You Snooze, You Lose!

And Even if You Don’t Snooze, You May Still Lose!

 

The shift in the market in our area has taken many by surprise.

 

It brings to mind the popular axiom “when you snooze you lose.” Wait too long to look at a great, well-priced property, or to make a strong offer, and you’ve lost your opportunity.

 

Are you really ready to jump through the buying-a-home hoop?And with dwindling, or at best stable, inventory, it’s not easy to walk away from a lost opportunity and feel comfort that there is lots to look at and more coming on the market…because there really isn’t.

 

While we have seen inventory gradually declining for some time, a more recent shift is increased demand. And with more competition and terrific interest rates we are seeing more and more multiple offers, often happening soon after a property hits the market.

 

And there are good number of cash buyers – an average of 30% of all San Diego property sales are cash transactions, with higher percentages in specific towns.

 

The problem some of you must confront is that even once you learn NOT to snooze and to move fast, you still might lose.

 

Why??

 

  • Offer price is important but it ain't everythingThe offer isn’t strong enough even at list price
  • There are many offers (sometimes 15 and more)
  • Cash buyers are too plentiful
  • Terms and conditions are too restrictive

 

Is this the case with all properties? Certainly not. But we are seeing more competing offers at many price points, and new listings moving more quickly than in the past.

 

This is not intended to scare you, and or make you feel that you cannot compete effectively.

 

BUT it is a dose of reality – the market has shifted in some significant ways and you need to be aware so you can react accordingly when you find a home you really like.

 

Some tips:

 

  • Be SURE to have an updated pre-approval letter in your hands or, better, on your computer
  • Be able to provide Proof of Funds (you will often see this abbreviated as POF) for your down-payment and earnest money deposit (EMD)
  • Know the comps – this will take some work with your REALTOR – for the home(s) you are interested in
  • Do not delay in making an appointment to see a new listing. New buyers are entering the market all the time
  • Do NOT assume a listing you like that has been languishing on the market will continue to sit there while you ponder. Remember…NEW BUYERS are hitting the market all the time and they might like the same house YOU do and be prepared to make a move
  • Know your budget (not just what you qualify to borrow) and make SURE you know what you are and are NOT willing to spend
  • Be ready to make an offer if you like the house and would like to own it. Taking a night or two to “think about it” might be the kiss of death. REMEMBER THE TITLE OF THIS POST?!
  • Don’t get caught up in the auction-like atmosphere that can happen with multiple bids
  • Know that the home still has to appraise if you are getting a loan. Just because you are willing to spend more does not mean the bank will.

 

Be ready to STOP if you are not ready to move ahead on a purchaseAnd by the way…if you aren’t ready to jump, then you shouldn’t.

 

Just because things have heated up and there are “bidding wars” does not mean you should get bent out of shape or move quickly on an offer when you are really not ready.

 

It’s a huge decision and an expensive one that shouldn’t be taken lightly. Make the decision that is right for you. And be prepared to live by it.

Comments (38)

Ann Nguyen
eXp Realty of California, Inc. - Truckee, CA
Lake Tahoe Truckee Homes For Sale
Jeff, I have seen this in the lower priced range of our market as well. So true! I hit "suggest". :-)
Jul 08, 2012 12:37 AM
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Hey, Jeff!  I included this post in Last Week's Favorites.  Have a great week.

Jul 08, 2012 03:32 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Great blog Jeff, I was over at Particia Kennedy blog and saw her tope 10 for the last week.  I will be watching for more sound advice.

Jul 08, 2012 03:49 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Kevin - and it's becoming more and more true and things heat up and competition increases

Pauline - yep, seeing the same thing here in many price points and communities. It's kinda frustrating for qualified buyers

Janis - that is great advice, too. I think it's too easy to get sucked into the bidding war mentality and overspend.

Thanks, Ann. We are seeing it in more and more price ranges.

Thanks, Pat. I am ALWAYS flattered to be included in your weekly list of posts.

Will - glad you stopped by. I keep trying to share but as I have gotten much busier it has been harder to find the time.

Jeff

Jul 08, 2012 12:10 PM
Wayne Zuhl
Remax First Realty II - Cranford, NJ
The Last Name You'll Ever Need in Real Estate

Good morning, Jeff - Great post that all buyers and potential buyers should read! Suggested and bookmarked for later reference!

Jul 08, 2012 08:51 PM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Same here. 

If a buyer is in the market one day and doesn't go back out for 2 weeks, the inventory has changed dramatically.

Jul 09, 2012 08:32 AM
Jean Hanley
Coldwell Banker Kivett Teeters - Hemet, CA
Specializing in Folks Who Want To Buy/Sell Homes

Jeff, great advice, as always.  Believe it or not.....I STILL get a buyer here and there, that has NOT seen a lender, and doesn't want to get pre-approved until they find something.  Bye-bye...

Jul 09, 2012 09:29 AM
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Hey, Jeff!  I'm so glad they featured this one!  What a terrific post.

Jul 09, 2012 10:38 AM
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

I've been really spoiled for the past 4 months because all of my listings (except for that one traditional) have been flying into escrow within days, if not hours, of hitting MLS. But you know, all good things come to an end sooner or later, and then there's something new to deal with -- the market is rarely unchangeable.

Jul 09, 2012 10:38 AM
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

Markets are always evolutionary in process.  I continue to be amazed over the years at how swiftly cycles change, and the market conditions with them.

Jul 09, 2012 11:50 AM
Ed Silva
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

Our market is still a very strong buyer's market, however when a clean listing properly priced appears it doesn't stay around long

Jul 09, 2012 12:21 PM
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Jeff -- we are seeing the same thing in Southern New Hampshire. The unfortunate thing is that is a shock to buyers and the media has no clue and is not reporting on the shift we are seeing according to numerous reports right here on Active Rain.

Jul 09, 2012 12:34 PM
Greg Miller
Ruoff Home Mortgage - Sarasota, FL
Florida Home Loans - Conventional,FHA,USDA,VA

Great post Jeff, I especially liked your point of being ready to make an offer. I've seen so many clients suffer from paralysis of analysis and think it over until it's gone.

Jul 09, 2012 01:01 PM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Wayne and Jean - thanks. I think there are a few good tips in there

Lenn - indeed. But our inventory is not growing, it's just being replaced

Jean - it's kinda shocking in this day and age, isn't it. There are clearly new buyers who just do not know about the process. And that's fine. It's the one who do not want to do what necessary and right that are the issue.

Thanks, Pat.

So true, Elizabeth. And not only do WE have to be prepared but there's some educating to do with buyers, and sellers. Glad to here things are going well up there in Sacramento

Myrl - this most recent change seemed to happen pretty quickly

Jeff

Jul 09, 2012 02:14 PM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M
Jeff - The market has shifted! There are homes at all prices that I have listed that are getting multiple offers, even homes that are a few million dollars.
Jul 09, 2012 03:28 PM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Ours isn't growing either.  In fact, the inventory is quite small compared to the buyers, especially first time buyers, that are out looking. 

We still have a huge overhang of upside down owners.

Jul 09, 2012 07:29 PM
Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation

We have a shrinking inventory, and a growing supply of buyers in our area.  That can only mean one thing... SOLD! (to the highest bidder).  Good for sellers, bad for buyers.  'Like your list of buyer's tips, Jeff!

Jul 09, 2012 09:31 PM
Amanda Christiansen
Christiansen Group Realty (260)704-0843 - Fort Wayne, IN
Christiansen Group Realty

Excellent post Jeff.  Many people should read this first before deciding to make an offer.  Congrats on the feature!!                         

Jul 09, 2012 10:57 PM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Ed - and that's good news for sellers

Joan - I think we are similar similar trends in many parts of the country. I have seen a few articles on-line from the press about bidding wars, though.

Greg - and that happens in other businesses as well. Being too analytical is not always in someone's best interest, at elast if they want to buy.

Jeff

Jul 10, 2012 12:08 AM
Glenn Freezman
Family Abstract, Inc. - Horsham, PA

Jeff, well written peice, as always.  Glad to hear your area is back to bidding wars, here... Not so much!

Jul 10, 2012 03:12 AM

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