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! "
Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.