From four, to seven, to eleven, to TWENTY(!) available listings last Sunday; that's how our Piedmont market is stacking up. In short, the Spring Market has arrived and it's in full bloom!
Along with this fresh new inventory, there will also be Buyers of every stripe; home shoppers from last year who were ultimately unsuccessful and have returned for another go round, as well as those who are entering anew, thus creating increased demand. Along with these two subsets, will be first-time novices, driven into the market by the high cost of rent (when buying proves cheaper than renting, it's time to start looking for a home), experienced Buyers who are scaling UP(!), and finally, long-time homeowners who are scaling down in the hopes of reducing their carrying costs (or eliminating them altogether). In other words, while inventory has risen, so has your competition.
With respect to nearly every Buyer I have met - no matter how seasoned they are - there is typically a learning curve that can be fairly steep, especially if the Buyers are coming from out of area where overbids are not the norm. (This really is an unusual pattern we've developed here in the Bay Area.)
In most parts of the country, a listing price is set that's usually higher (not lower) than the anticipated offer(s) and then a waiting game ensues (translating into months, not weeks of anticipation), followed by an offer that's less than the list price (not more). At which point, inspections and negotiations are undertaken by the Buyers, further reducing the price once reports are in. That's a fairly typical transaction anywhere else in the United States (and one we'll return to when and IF the market shifts back into the Buyers' corner - as it will likely do so one day in the not too distant future).
Not this day, not here, not now.
Presently, in the East Bay, most home prices are strategically set by the Realtors with the intention of attracting many interested Buyers. In some cases, the prices are set FAR below where the property will ultimately trade, and for many, that's not only surreal, but a HUGE disconnect. For those Buyers believing they can somehow beat what's essentially a blind auction, they'll undoubtedly make thoughtful, pragmatic offers that while much appreciated, will fall far short of the mark.
The reality is that until a Buyer finds the home they are unwilling to lose, it's unlikely that a pragmatic offer will ever beat out an emotionally-driven one. So if you're NOT feeling a little anxious, highly-charged, or a little sick to your stomach when making a purchase offer, you probably haven't done it right . . .
In the meantime, how prepared are you to meet the competition, or worse yet, the Sellers' heightened expectations? (And they are very high, make no mistake.) This means cover letters with adorable photos of your family (and dog), bios meant to impress, emphatic lender letters prequalifying you for a loan, and signed disclosure packages affirming acknowledgment of the disclosures and reports. And let's not forget that all of this is wrapped up in an aggressive, competitive offer (SNAP)!!!
So the first line of offense starts with your lender and a clear understanding of what you can (and cannot) afford and just as importantly, what that entails. It's a poor use of your time to hunt for a replacement house now if you cannot qualify to buy until after you've sold the home you are currently in. Understand that it's the very rare home that will take an offer contingent upon the sale of your current home and if so, it's probably because no one wants it.
Once qualified, can I please encourage you to meet with a local Realtor?!? It's true, your cousin's license allows her to write anywhere in the state of California, but local jurisdictions have very different practices and customs - not to mention the "off-market" opportunities you are bound to miss when working outside the pool of "in-the-know" local agents. No, working locally doesn't promise you a happy ending, but it ensures you a much better shot at it (and that's no joke)!
From there, you should be religiously hitting the Saturday and Sunday Opens to educate yourself about the marketplace. Honestly, without context, it will be nearly impossible to recognize the "one" if you haven't rejected a few others near misses along the way. Shopping for a house isn't a whole lot different than shopping for a partner; they both require rose-colored glasses, a lot of diligence, and ultimately, a good deal of compromise. (Let me know if you'd like a weekly Weekend Ad Review and I'll quickly add you to my list.)
Suffice it to say that the time spent between deciding to enter the marketplace and successfully closing escrow, requires a TON of moving parts to successfully navigate the journey and I am more than happy to outline them all for you in greater detail. (That's the teaser folks). Heck, give me a call. Let's make sure you are ready for the bloom.
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Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.