Thursday, January 28, 2010
They're Back....Multiple Offers in the San Diego Housing Market
While the medium home prices in San Diego County may be climbing slower than in 2003 in, due to the uncertainty of the economy, the bidding atmosphere with Multiple Offers is back.
As the inventory of homes decreases below the normal 6 months of inventory in most areas of San Diego County to 2-to-3 months and the number of buyers increased 10%, compared to a year ago, the competition for good homes is driving buyers into a competetive bidding frenzy. Buyers are making offers on multiple properties, and sellers in the lower end of the housing market are getting multiple competing offers.
"My goal is to get a house this year," said one of my serious first time home buyers. Many are racing towards that goal before the $8,000 Tax Credit expires, before the giant carrot disappears from underneathe their noses April 30th. To add to the mix, the government added in a $6500 tax credit for repeat buyers. And then there are the investors buying while prices are low.
Sellers and banks are looking for the cash to back up those rising offers, should the appraisal not come in and the buyer may have to pay more cash to make up the difference.
So what are buyers to do?
1. Lite Fixer. Look for a home that may not be perfect. Look for the potential in a home. Cosmetic repairs can always be done one at a time. Look beyond the stained carpet and scuffs on the walls. Ask the seller to help with your closing costs so that you can use that money to replace the carpet and paint. Also, the tax credit can be used in the near future for needed repairs or updating. But beware, avoid homes that require too many "honey do's" unless you have lots of money to sink into the home. Watch "The Money Pit" with Tom Hanks and Shelley Long before jumping into a home with lots of issues.
2. Buy Low. Buy a home below your means, below your maximum preapproved price, so that you have room to bid up. While you think you are doing good by giving the seller his asking price, multiple offers pushes the price upward and you may need room to meet that higher price.
3. Be Realistic. Most importantly, listen to your Realtor's advice and be realistic. Listing agents toss the low ball offers aside, unless you have "all cash" for a quicker sale. Know what the comparable homes are running in the area and plan to make a fair market value offer.
For more tips on being a successful buyer in this challenging market, read 5 Tips How FHA and VA Buyers Can Succeed
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