Put on your big boy/girl pants and face this market with a game plan.
You decided to purchase a new home quite possibly your first home. You start looking, submit offers; bam, disappointment after disappointment. How indignant that a seller rejected what you considered a good offer.
We are heading into peak season so put on your big boy/girl pants and face this market with a game plan.
Most buyers realize that price is a constraint in purchasing the home they want. The available cash will only go so far. Be sure that the monthly house payment does not overwhelm your budget. The old saying “champagne taste on a beer budget.”
There are other impediments preventing buyers from purchasing a home.
Often a buyer wants the perfect home, move-in ready, only minor defects. Guess what, so do other buyers. Competition is fierce; you will need to step up. Unless you can, you will lose out with disappointment and a jaundiced attitude about the process.
Then there is the family wanting a great location with highly rated schools. Again competition will exist from other families wanting the exact same thing.
On the other end of the spectrum buyers want a fixer-upper at a reduced price. This scenario could result in competition with cash investors. If there are multiple offers close in price and terms, cash will win out 99% of the time.
Lastly, don’t expect sellers to reward you with a low bid when compared to higher offers just because you and your family are so cute. By the way, your agent can’t force a seller to accept your offer.
A client fired me because I couldn’t force the seller to accept their offer that was $5,000 below asking with the home on the market for only one day. The offer was at their highest loan limit.
The worst part of that situation was that the listing agent would not communicate with me. I had to track her down to find out why there was no response from the seller.
So what are you to do?
First off, don’t give up and be realistic. You could try on confine your search to homes that seem to be overpriced and have been on the market for more than a couple of weeks. Yea, I said a couple of weeks. Sellers notice that their neighbor’s home sold in a week and wonder why their house has not. Most obvious answer; asking price too high.
Another thought is to look for homes that are below your maximum, so you have room to compete against multiple offers.
Understand something, the seller’s listing agent has a fiduciary duty to their client. When multiple offers come in for a property, the agent will use this fact to solicit higher offers.
When I am listing a property that has received multiple offers I am sure to let the deficient offeree know what their competition is offering. How else would I prod higher offers at this point? Marketing and home presentation should have illicit higher initial offers.
Hopefully, we are beyond secrecy by listing agents not informing bidders on current offers. The standard California Association of Realtors contract does not prohibit listing agents from disclosing offer information unless expressly prohibited by the seller.
Do your homework; work with a great agent, say someone like me, and don’t be intimidated by the process. Yes, if a seller rejected what you considered a good offer disappointment will follow; this is a journey. Remember what is important, you are looking for a home, a place for memories. The goal is well worth the obstacles.