Real Estate Report – February 2016

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Multiple Offer Offers

The sellers’ market continues to rage in Silicon Valley. Multiple offers are the norm, especially in desirable neighborhoods, which are those defined by:

  • Low-crime,
  • Good schools,
  • Stable, long-term residents,
  • Neighborhood amenities, such as parks, libraries, tennis and/or basketball courts, and curb appeal,
  • Short commute times and/or public transportation, among other things.

When deciding to buy a home in a multiple bid environment, there are some things buyers must do and some things they can do to increase the chances of winning the offer war.

First, all–cash offers are hard to beat, with no need for appraisals and the ability for the buyer to close quickly.

Yet, they can be beat.  First, don’t just get a pre-approval letter, get a pre-approval letter on steroids.

That kind of pre-approval letter will include some words from the lender verifying that you are a well-qualified buyer. Have the mortgage broker or agent provide some financial information about you and your offer. Also, have your mortgage broker take as much of the loan through the process as possible.

Reduce the loan and appraisal contingency time by pre-ordering an appraisal, this is more probable with smaller banks, direct lenders or mortgage brokers. You can then tell the seller, when you present the offer, the appraisal has been scheduled.

Next, get your inspections done early. Spending a few hundred dollars to get the inspections done within days of having your offer accepted shows the seller you are serious.

The cash buyer is going to expect a discount because he/she is paying all cash. You need to beat their offer.

Lastly, make yourself known to the seller. Write a letter letting the seller know who you are, why you like the home and what your intentions are. It doesn’t always work, but it’s another arrow in the quiver.

 

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