Don't let anybody fool you; it's hard for some first-time home buyers to buy their first home. It's not as easy as some people make it sound. Oh, sure, sometimes buyers can get lucky and score a home right away -- especially if location and condition aren't that important, but the odds are it will take a while in Sacramento in the $200,000 - $250,000 market.
I am working with a wonderful young couple right now who have just submitted their 10th offer on a home in Sacramento. These are delightful people whom I will call Doug and Shereen, to protect their privacy. I initially had met them several years ago, when they first started saving money to buy a home, setting their sights on the spring of 2008 to move.
But they have a big ol' jumbo pile of challenges facing them:
- Declining market
- Sea of under-priced short sales and foreclosures
- Need to use Nehemiah
- Want desirable locations
- Buying at the hottest price point in the market place
Doug and Shereen are sincere, dedicated, loyal and one of the sweetest and kindest people I know. They're the type who instinctively make me want to move heaven and earth to find them that home, regardless of how long it takes. With that, though, comes feeling their pain and frustration. I watch their eyes light up when they find a suitable home. Then, they make an offer, and I can hear the wheels in their heads spinning as they make mental notes: where they will put their one living room sofa and which wall will accommodate the TV. It's heart breaking to see those dreams shattered when offer after offer is lost in the war of multple offers. They lose out to investors with all cash or conventional buyers with big down payments.
As for the positives, Doug and Shereen are trying to stay within their means. They
- Are wise enough to realize they won't win by lowballing.
- Are making fast offers on homes well below their preapproval price point because they don't want to over-extend themselves.
- Are rational, logical and emotionally stable individuals who have planned for their long-term future.
- Have established and excellent credit with high FICO scores.
- Are willing to invest sweat equity.
Friday, we were told that the home on which they made their 10th offer had four offers. Two were outright rejected by the bank. This leaves them in a tie. We quickly increased the offer another $5,000, which is now 27% over the under-priced list price and still on par with comparable sales. If I could wave a magical real-estate wand, I would. It's tough for them to wait. During my 30-some years in this business, it's become relatively easy to focus on the client's end result and remove my feelings from these transactions, but in this particular situation, I admit that I am simply unable to do that.