5 tips for buying a home in today's sellers market By Norman Sinai

Its national news, the real estate market is red hot in most areas of the country, while experiencing a shortage of inventory, record high sales prices and many multiple offer situations, which is ultimately resulting in significant (and sometimes shocking) overbidding.

During the pandemic, we've seen housing needs adjust and migratory patterns change from several aspects ranging from the availability to work remotely thereby escaping higher cost areas, to changing housing needs to accommodate a work at home friendly environment, to room to accommodate home schooling, among other needs.

My Name is Norman Sinai, and as I approach my 25th year as a full time Realtor, and Broker-owner of a real estate company based in the San Francisco Bay Area, I've been through several real estate cycles, and one thing I’ve learned, is that change is inevitable and for the San Francisco Bay Area, as in many major metropolitan areas, there is no "normal" market. So while the business of real estate sales evolves, and we lean into technology, there are fundamentals in hot markets that can't be ignored in order to get offers accepted and I continue to see proven over and over.

While I can create a lengthy list, here are 5 tips any home buyer should consider in the current low inventory, high demand market, and that I use myself with my clients:

1. Get your loan preapproval done first

Sounds pretty basic right? You should know how much home you can afford before you go shopping. However many people contact my office about a property for sale, thinking they know their loan amount they will qualify for and the associated payment, only to find out it varies from what they initially thought once they talk to a lender. Its a known fact, sellers will not entertain offers without a buyer being pre approved, so its strongly recommended to get your loan pre approval done first to put you in the home shopping game. This not only allows you to be positioned to shop and make an offer, but to avoid any surprises for the type of loan and the amount your pursuing.

2. Learn the average list to sale price in the area your shopping in

Most home buyers will look at homes online and get familiar with areas and the prices of homes, however, these are the listing price being shown to would be buyers...what they actually sell for is a separate number, and today, that number can be substantially higher. So make sure to ask your Realtor to tell you what the style of homes in the location you are shopping, are actually selling for. This is some of the first data we share with our buyers when we get started in the home buying process and will help you position yourself appropriately in the correct price range.

3. Be clear on your maximum housing budget

Often, home buyers will get pre approved for a loan, and are given a maximum loan amount they qualify for, and then consider dialing it back to a more conservative number as their maximum they want to spend, only to find out when offering on properties, they are back at that initial maximum loan amount to get the home they want especially in a competitive market. While this goes hand in hand with tip 2, of knowing the actual sale prices in the area your shopping, it is good to be mindful of having a true maximum price and hard stop in your budget when starting out. This should be discussed with your Realtor from the start. Sometimes this can open up additional areas in a bit of a higher price point, or rule others out when tip 3 & 4 are fully considered.

(Your probably getting the hint that price point expectations often change as the home shopping process evolves)

4. Get intimate with the sellers wants and needs, and meet them

In today's sellers market, being competitive is essential. I have had more conversations than I could count where a prospective home buyer told me, “im not interested in getting into a bidding war” only to end up waiting for the market to change and getting priced out of the market. In todays market, its almost expected you will run into others wanting to offer on the same house...and in some cases, many many others. However, there are ways to gain an advantage over other buyers, by knowing the sellers wants and needs. While it can often be plainly a matter of getting the highest price, which is typically what matters most to a seller, after price, it could be things like:

a. Offering additional time in the home after close of escrow to give the seller time to find their next home.

b. Offering a free rentback in the home after the close of escrow. Give them that additional time in the home after close, at no cost.

c. Raising the earnest money deposit.

d. Shortening or removing certain contingencies of your purchase.

Ultimately, your Realtor will need to reach out to the sellers listing Realtor and inquire about these things which can help guide you in crafting your offer.

Ask Your Realtor what kinds of concessions and negotiation strategies are being utilized with sellers in the local market at this time, so you can discuss and consider what may work best for you.

5. Understand the timing component and be on top of the listing inventory:

In today's market, its important that buyers understand the sense of urgency needed to secure a home. Whether its scheduling to see the property as quickly as possible once it hits the market, (often there is a limited number of showing appointments offered for a given home due to Covid-19 showing restrictions and they run out !) to submitting an offer on the property...speed is essential.

A common mistake I see is buyers watching the internet and thinking a property is still for sale, when in fact it garnered many showings the first 1-3 days, and already has multiple offers being negotiated on it, and the buyers havent even seen the home yet...speed is essential to be in the shopping game. The trick is to have a coordinated effort with your Realtor to be aware of and preview homes that hit the market in real time, as soon as possible. This often means tying into their local multiple listing service in real time to be on the same shopping platform, seeing the same data in real time.

I hope you found value in these home shopping tips and they help you in your house hunt!

Happy home shopping, now go get em !

If you have questions about the home buying or selling process, give me a call, text or shoot me an email.

Norman Sinai

Realty World, Bay Area Group

[email protected]

925-829-7500

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