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The fun never ends: San Diego real estate - 06/16/09
We are in a very strange time in San Diego real estate. But it's becoming a good market on several levels! We've never had such a buyer's market for luxury homes, if that's your budget and particular cup of tea. Never have we seen so many agents with $1 million + listings asking for offers. "Write anything down," said one agent, "and I'll make it work!" And still these mini or real mansions sit for months and months. It's not unusual to see price reductions on deluxe homes of $200,000 to $400,000 overnight. And believe me, if you're not seeing price reductions, you're seeing an unrealistic seller who is not getting enough information about the scarcity of buyers. Oh, wait ~ actions speak louder than words. With no contracts to review, they know the market well.
And then we have a very strong seller's market with single family homes under $300,000. Hello! It's not unusual to see up to 20 offers in a couple of days from very good, reliable buyers on these listings. The day the property hits the market, the day the offers start. Often times the buyer agent will NEVER hear back from the listing agent and that's sad. We need to get back to the courteous industry we once were. No one is that busy to ignore a good agent with a good offer. Pick up the phone. Tell the agent what happened.
It's very frustrating for these buyers who are not exactly sure what happened. They thought they heard that there was an abundance of foreclosed homes on the market. Why can't they snap one up?
Because the easy snapping up was done in 2008. This is 2009, already a new day. The predominant sellers of these cheaper homes, are banks. Banks are finding themselves in a position to take their time and continue to review offers for days if not weeks. There is a fine line though. You can't overbid the next guy to try to get the house, darn it, because the bank may turn you down. Why? They don't want to waste time getting into escrow if they think your fantastic offer won't appraise. They'll have to lower the price later to make the deal work. Banks know this, so they will choose the BEST offer closest to the "broker price opinion" they already have in their hand for the property. That's a mini appraisal done by agents and brokers.
The great news is that interest rates are at a screaming low rate. But they ARE inching up! Pay attention. If your purchase price is truly $300,000 and under and you want a house, take heed: 1) get your pre-approval letter updated and in hand, 2) prepare to write an offer in the living room of the house you're in, 3) prepare to write other offers before hearing from the bank on the one offer you just wrote in the living room.
And then we have a very strong seller's market with single family homes under $300,000. Hello! It's not unusual to see up to 20 offers in a couple of days from very good, reliable buyers on these listings. The day the property hits the market, the day the offers start. Often times the buyer agent will NEVER hear back from the listing agent and that's sad. We need to get back to the courteous industry we once were. No one is that busy to ignore a good agent with a good offer. Pick up the phone. Tell the agent what happened.
It's very frustrating for these buyers who are not exactly sure what happened. They thought they heard that there was an abundance of foreclosed homes on the market. Why can't they snap one up?
Because the easy snapping up was done in 2008. This is 2009, already a new day. The predominant sellers of these cheaper homes, are banks. Banks are finding themselves in a position to take their time and continue to review offers for days if not weeks. There is a fine line though. You can't overbid the next guy to try to get the house, darn it, because the bank may turn you down. Why? They don't want to waste time getting into escrow if they think your fantastic offer won't appraise. They'll have to lower the price later to make the deal work. Banks know this, so they will choose the BEST offer closest to the "broker price opinion" they already have in their hand for the property. That's a mini appraisal done by agents and brokers.
The great news is that interest rates are at a screaming low rate. But they ARE inching up! Pay attention. If your purchase price is truly $300,000 and under and you want a house, take heed: 1) get your pre-approval letter updated and in hand, 2) prepare to write an offer in the living room of the house you're in, 3) prepare to write other offers before hearing from the bank on the one offer you just wrote in the living room.
It's not a game but it feels like one. It's not a bad idea to write as many offers at once as you need in order to be heard. It's a very hard business finding a house that you want and can actually get. But you must do the work to get a home while rates are low. We believe another huge round of foreclosed homes is coming in September 2009.
What about condos, Genie? We'll they're sure for sale. Make sure the HOA has no litigation and is solvent and that the owner occupancy level is 60% or higher. These will be lender requirements to get your deal done. So you might as well have your agent investigate this for you before putting pen to paper. Many buildings with an abundance of foreclosures have suffering budget reserves. Why? Because those foreclosed owners didn't have money to maintain or pay for their homes. And they were not paying their HOA dues as a rule of thumb. So please be forewarned: you may be the recipient down the road of an assessment as the HOA tries very hard to build up its reserves.
That condo better be in a great location at a great price with no litigation and a good owner occupancy level to buy it. Be careful! You may need your pink boxing gloves if you're competing for a bank owned HOUSE priced less than $300,000.
What about condos, Genie? We'll they're sure for sale. Make sure the HOA has no litigation and is solvent and that the owner occupancy level is 60% or higher. These will be lender requirements to get your deal done. So you might as well have your agent investigate this for you before putting pen to paper. Many buildings with an abundance of foreclosures have suffering budget reserves. Why? Because those foreclosed owners didn't have money to maintain or pay for their homes. And they were not paying their HOA dues as a rule of thumb. So please be forewarned: you may be the recipient down the road of an assessment as the HOA tries very hard to build up its reserves.
That condo better be in a great location at a great price with no litigation and a good owner occupancy level to buy it. Be careful! You may need your pink boxing gloves if you're competing for a bank owned HOUSE priced less than $300,000.
Article by Open House Genie
Copyright 2009
Used, copied or quoted with permission only.