The Wild, WILD West!
I've spent the week fielding shocked responses to last week's column, "I Can Get You a Million More," only to discover that a property in town closed this week for one-and-a-half million higher than its asking price (!!!) Seems that a mere million above the list is yesterday's news. . .
Meanwhile, I've also dedicated more time than I care to admit filling out an extensive report for a relocation company. "RELOS" (short for relocation transactions) typically work with important executive types to help offset the expensive cost of moving from state to state, or from country to country; thus, they play an important role in helping families securely transition from one place to the next. For Realtors, they can be a symbiotic partnership.
However, the RELO forms that come with such assignments can be akin to herding cats, as they require Agents to roll up their sleeves, dig deep, and outline competitive sales for the "subject" property. Therein lies my problem. With only six homes in all of Piedmont for sale last week, there weren't three "like-kind" active listings, nor three pending listings to mine. (I have a newfound appreciation for Appraisers.) And as houses are selling in as little as 8-12 days, it's a difficult ask to achieve. No matter, the form is mandatory.
"Make sure to fill in ALL of the questions," our COMPASS contact kindly coached me. "If need be, find the comps in other nearby areas but don't leave the columns blank." (Sigh.) Additionally, this particular house isn't likely to come to market until after the school year ends, so what may be true in today's world, may no longer apply come the summer. That's how quickly our marketplace is escalating. In a word, it's RAPID!
Welcome to the wild, wild west.
How's that playing out for Bay Area Buyers?
From one straight-shooter to another, it's TOUGH going to be sure.
The reality is that when a property receives 26 offers, it means that 25 sets of Buyers are going to lose, and that's disheartening news to impart to well-intended Buyers, especially as they chase the market UP in what appears to be a growing stampede. (Rising interest rates are bringing Buyers out in herds.) Unfortunately, each new sale seems to set a new high bar. Consequently, if I could teach new Buyers one important lesson, it's to be quicker on the draw (as you are likely going to expand your budget eventually, and by the time you do, you could have had more for less earlier in the process).
"We're qualified for X but don't want to pay more than Y . . ." (I appreciate your thinking, but that strategy is unlikely to work in your favor.)
"We'd pay Y if the property were perfect." (Just to be clear, I've yet to sell the "perfect" house, irrespective of the price point. Please throw the concept of perfection out the window: 80% is great; 90% is a home run.)
"We're holding back in case the Sellers counter our offer. (Don't; with multiple offers from which to choose, you aren't likely to get a second shot.)
All this is my long way of saying that value is a moving target, that the courtesies around extended negotiations, buyer due diligence, or seller credits on any new discovery no longer apply. (In fact, they barely exist.) Unfortunately, when it comes to buying a house, Buyers are in a metaphorical gunfight, and gosh dang it partner, you gotta shoot to win. (All metaphors aside, I'm emphatically anti-gun.)
In other words, it's critical to fully understand the nuances of the marketplace, get aggressive with respect to your offers, be tenacious in the hunt, acquire leather skin, fight for the houses you love, and aim for the bullseye (which IS evidently going to be hundreds-of-thousands above the list price, if not a million+ more.)
Otherwise, step aside and let the other cowboys, cowgirls, AND LGBTQIA cowpersons gun sling it out while you wait for the next golden opportunity. (COMPASS is all about respecting Fair-Housing laws.)
Yes, there will undoubtedly be more homesteads ahead . . . but it's likely to be a showdown no matter what. Remember, it's the wild, WILD west out there.
Meanwhile, there's a form on my computer calling my name.
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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.