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.
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.
- The 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.
- 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.
And 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.