There's no shame in admitting that I'm a devoted Olympic junkie (is there any athletic demonstration more awe inspiring?) and have been glued to the flat screen each evening after work. From the the snowboard racers, to the short-track speed skaters, to the alpine downhill skiers, our well-honed athletes have provided exciting thrills (and spills!) with each new competition or event. Watching these elite athletes fight it out to the very finish, mere hundredths of seconds separating the gold medal winners from the silver and bronze, I am reminded of the phrase "It's not where you start, it's where you finish!"
Market statistics and softening trends aside, edging out the competition in real estate can also come down to the slimmest of margins as well. While higher offer prices tend to be the defining factor, shorter inspection periods, larger down payments, tighter terms and customizing the contract to meet the seller's needs, can spell the difference between winning the home or coming in second.
On the heels of the first real "Buyer's Market" in more than a decade, many buyers have been lulled into believing that every listed home has experienced a softening of value and for the most part, that's true - but it's a softening from the 2005/2006 peak. Emotionally appealing homes that are priced with compelling 2010 market values in mind, are experiencing strong competition and multiple offers (yes, they are). In spite of newsworthy foreclosure stories that could easily lead you to believe that every home is a "deal" (better yet, make that a "steal") that just hasn't been my experience in our local market. (Excellent values? Yes. Steals? No!)
With set offer dates returning to the forefront, the threat of higher interest rates just ahead, the end of the government-sponsored buyer incentives, and increased buyer demand coupled with decreased inventory in almost every East Bay neighborhood this side of the tunnel - "it's not how you go, it's how you land." As of late, healthy competition has been present in the vast majority of my purchase offers - and I am certainly not alone by any means.
In this scenario, ascertaining the value of a desired home is part science and part art! Figuring out the price per square foot, the recent comparable sales and the level of interest in any given home is the starting point only. Determining how badly you want that particular home is how to keep the finish line in sight.
As always, CASH is KING. (Access to capital usually eliminates the appraisal and loan contingencies.) But placing that aside (most of us don't have unlimited cash reserves readily available) determining the value of a desired home to you is often far more elusive and much trickier.
Sure, experienced REALTORS have suggestions to help guide you towards what we believe may be a winning number, but it is still largely subjective in the end. Sometimes it comes down to raising the bar in $5,000 -$10,000 increments until you find your breaking point (the price at which you are comfortably willing to walk away and let another party have it). Sometimes it comes down to a greater understanding of the market and the "intrinsic" value versus the "market" value of a particular home. Sometimes it comes down to more seasoning and more near misses before you are truly ready to bid competitively. And sometimes, it just comes down to sheer will and determination to "own" the property more than all of the other parties at the table!
While a silver or bronze medal at the Olympics is cause for celebration, coming in second on a home is typically disappointing news!
"It's not where you start, it's where you finish." Sharpen your skills, tighten your terms, and get competitive with your offers "and you're gonna finish on top! "
I regularly meet a colleague (and a very good friend) a couple of times a month for breakfast and an exchange of information beyond The GRUBB Co. and the MLS inventory (Multiple Listing Service). Often, we swap stories about our buyers and what they are searching for. "I need an all-level living situation on the Piedmont Side of Montclair," she might say and I'll respond with "I need four bedrooms and two baths here in Piedmont under $1.2 million." "What do you know?" we say to each other almost in unison, as we professionally "beat the bushes" for what might be coming down the road.
Last week, over eggs and oatmeal, we talked about how Buyers often aren't clear about what they truly desire until they happen upon it - which can come as a complete surprise to everyone involved in the hunt - especially the Buyers! I shared a story about a very selective client who had wanted "a sophisticated contemporary with a view" and instead, purchased a "fixer" in the woods. Maureen countered with a tale about recent clients who were committed to buying in the Oakland Hills but unexpectedly fell in love with an Eichler in Walnut Creek just a few weeks ago. (Discovered at a Sunday Open, they are now happily in contract!) Sometimes what attracts us most, is a complete and utter surprise!
I have always LOVED to dance and swore I'd never marry a man who didn't love it too, so when I started dating my clever future husband and asked him if he liked to dance, he proudly replied "My dancing's often been compared to Michael Jackson's." "Really?" I said, a big grin spreading across my face. At which point he quickly responded,"Well . . . not favorably!"
I married a man with humor instead!
Twenty years later, we're still laughing. As for dancing, I now take salsa lessons on my own and he plays tennis with his friends. It works. He doesn't have to suffer - and neither do I! (Cliff's beat suits humor better than it does dance! And one and two and three and four . . .)
As it turns out, we have laughed through both good and bad times these last 20 years and humor is an attribute I have learned to value much more. My point is that when we stay open to the unexpected gifts, life often delivers us a greater reward!
So with respect to real estate (and husbands or wives) keep your options open and you too, might be pleasantly surprised!
Happy Valentine's Day! (I hope you dance AND laugh in equal measure.)
One of my favorite childhood books was Alice in Wonderland which I happily read over and over (and still do). I love this imaginative tale of a fearless young girl who chased a talking rabbit through a hole and fell down, down, down before finding herself in unfamiliar territory. Risk or opportunity? I suppose it all depends on your "Perspective. " Whether she was standing up to the Queen of Hearts or debating the Mad Hatter, Alice was a girl after my own heart - always willing to take a chance.
Real estate often mimics Alice's topsy-turvy adventures. One week, there is nothing to show our anxious clients and the next week, several good opportunities emerge that demand an immediate response. In some extreme cases, I am literally urging my clients to "make an offer" almost as soon as they've stepped through the front door (or the looking glass)! "Come, come - off with your head!" . . . You might more easily play croquet with a Flamingo than make sense out of buying or selling a home in the Bay Area. Anxiety? Stress? Pressure? You betcha - or as Alice might exclaim, "Stuff and nonsense!"
No wonder you're spinning.
"Would you tell me please, which way I ought to go from here?" a confused Alice asks the mysterious Cheshire Cat who keeps appearing and than disappearing, leaving a disconcerting and fading smile in his wake. (Sounds like some fly by night mortgage brokers I've met a time or two.) "That depends a good deal on where you want to get to," the Cheshire Cat responds. And so it does . . .
If you are feeling dazed and confused, welcome to the world of real estate. Just last week I recommended "patience" and this week, I'm encouraging you to "make an offer." No wonder it gets confusing. It's like falling down the rabbit hole and finding yourself in unfamiliar territory. Even for those of us used to the fast-paced antics of "Wonderland," it can be a dizzy ride. (And no, I don't suggest you chew on the mushroom as Alice found herself doing time and again and no, I haven't been chewing on it either.) What do I recommend? What's the moral of the story? Well, like most good real estate stories, it ends with a renewed appreciation for home, for a sense of one's place in the world, for what's comforting and a need for family and security; with an enlightened Alice discovering pleasure in the simple joys of life.
Of course, the best way to ensure a "happily ever after" outcome, is to begin with a professional you trust (stay away from those fast-talkers and overly pushy characters - they're the ones "painting the roses red" - and align yourself with someone who truly places your best interest first. I find that integrity, intentions and actions (and a bit of humor) often make for the most successful results - in real estate as in life.
Surround yourself with smart, capable and experienced professionals, from agents, to mortgage lenders, to escrow officers and you will find that you can navigate "Wonderland" with confidence and assurance.
And should you fall, I'll be there to catch you!
Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.