It's a discouraging fact of life that the only place from which I seem to be losing 'padding' as I age, is the balls of my feet . . . which is why those ultra-chic high heels that I used to dance the night away in our barely manageable as I painfully sit through dinner and the theater anymore.
Dance the night away?
Heck, I use to actually wait tables five nights a week in platform heels and would hit the clubs for hours afterwards! "Honey, go get the car," I'll plead with my husband, Cliff , as we leave the restaurant, "I can't walk another step!" Regrettably, high heels are becoming less and less comfortable so yesterday, I actually broke down and bought a pair of stylish FLATS on my way back to the office.
"Comfort" is a concept I am bringing up earlier and and earlier with my Buyers these days, as they prepare to do battle in our current, heated marketplace. With the large majority of homes selling far ABOVE their listed price, it's frankly, rather uncomfortable for everyone involved - except for the fortunate Home Sellers who are quite likely, realizing results they never anticipated or reasonably expected.
Congratulations! As Sellers, you are benefiting from fortunate market timing, historically low interest rates, pent-up buyer demand, low inventory, and more CASH than we have ever seen in the marketplace before, which accounts for the many buyers who can comfortably waive their appraisal and loan conditions in competition.
Even so, it's no easy thing to waive contingencies when hard-earned money is on the table and there's no clear formula for picking the "magic number." Moreover, there's NO guarantee that the subsequent appraisal will affirm the market value a 'willing and able' Buyer has set. (It often doesn't. Remember, even if YOU have waived the appraisal contingency, the bank will still require one if a loan is in place as part of the purchase agreement.)
"How do we know what to offer?" is the refrain I hear most often from my well-intentioned buyers. "We don't want to overpay." (That's understandable; nor do I want that for you.)
BUT successfully competing in this marketplace isn't about overpaying; it's about recognizing the "value proposition" at play. In other words, what's really important to you and your family as you take this all important step? Is it four bedrooms up? A large backyard? A bay view? Walk to BART? Near good schools? Close to a park? At the entrance to hiking trails? Does it provide privacy and security? Room to grow? A space for visiting relatives? Natural light? Great bones? Historical integrity? Contemporary living? And so the list goes - it's as varied as you are and what YOU value; AND frankly, no one can define that but you!
Ultimately, what you are willing to offer, largely has to do with your personal preferences, how long you think you will stay in the home, what you can afford to pay, and what the carrying costs will be. (The costs to OWN are actually more relevant than then the cost to BUY, given the current interest rates).
If you plan to stay in the home for at least seven to ten years, today's inflated price may be largely moot as you are very likely not only going to realize whatever "future appreciation" you paid upfront, but will more often than not, see a sizable return on your investment.
Historically, it's important to note, that investing in one's home has been a very sound part of one's portfolio over time . . .
Whatever your short or long-term plan, it's been my experience that when you find the home you aren't willing to lose to another Buyer, you'll step up and compete in a meaningful way.
Hey, I don't just talk the talk, I walk it too. My husband and I are actually involved in a "fixer" purchase right now that very likely won't pencil out in today's world, especially once we factor in the renovation costs. That's okay; it doesn't need to. For our purposes, the house need not 'math out' for at least ten to fifteen years, when we will likely go to sell it. In the here and now, it works for our family, and we believe it is a sound opportunity.
So identify what's important to you and then write an offer that achieves the goal, with the clear understanding that home investments are unlike any other; they provide security on a very different plane than retirement funds or savings bonds do; which is probably why Buyers tend to buy homes emotionally, rather than pragmatically. Admit it, it's hard to fall in love with a 401k plan, no matter how much money is socked away OR how much future security it provides. (It's no less important, but you can't bake cookies or build memories in it.)
Now shoes, that's another matter entirely; those are quite easy to love! (Ouch, my feet hurt.)
Julie Gardner, has been writing The Perspective for 17 years and has published more than 650 essays. She is also a frequent contributor to the Sound Off column in the Real Estate section of The San Francisco Chronicle.