The Real Estate Market is Bonkers Right Now
In case you haven’t been paying attention, I’ve got news for you…the real estate market in the greater Sacramento area is hot and getting hotter. Dare I say, it’s scorching? Yeah, that sounds a bit more accurate.
Anecdotal Stats
Properties are generally selling in the first week unless they are overpriced or have a special selling condition such as a short sale or probate sale.
It is not uncommon for homes under $500k to receive 10-15 offers.
Homes in the $500-650k range often receive 6-8 offers, I’ve seen quite a few where the winning offer is $25,000 above list price.
You will want an agent who is detail oriented and has great people skills to help navigate the fast-moving process (hint: it’s me).
Crazy Things are Happening
I recently showed a client an overpriced home that had been on the market 25 days, which is about two weeks longer than its competitors. The original price was $469,000, then reduced to $459,000 on day 25, which quickly prompted four showings that day, including ours. Prior to viewing the property, I ran comps for my client to determine a realistic value in anticipation of writing an offer. In the last three months there were five comps sold, all of which were coincidentally the same floor plan as the house we were looking at. The nicest home of the bunch was fully renovated top to bottom and sold for $464,000, whereas the subject property was in good shape but very outdated with original décor from the 80’s when the home was built. Our house was in good structural condition but had wood-grain formica countertops, stained carpet, popcorn ceilings, drab paint, etc. I estimated the value to be around $430,000.
The following morning I followed up with the seller to discuss price and offer terms and was informed that they had received a full-price offer of $459,000 with the appraisal contingency removed, meaning the buyer has a pile of money and isn’t concerned about the property being worth what they’re paying for it. I was stunned. Is this the world we are living in now? Can this be real? Yep, apparently so!
Best Approach to Getting the Home You Love
First things first, you absolutely must be pre-approved with a lender. If you don’t have a lender, I’ve got plenty to connect you with. Your offer won’t be considered if you aren’t pre-approved and have proof of funds for your down payment and closing costs.
Second, I highly recommend being set up with immediate notifications for new listings, which I can do for you via a direct connection to the MLS. Zillow and Redfin have slick websites but I can’t see your account or anything you have saved, which makes our mission more difficult in terms of communication. Real estate websites get their listings from the MLS just like I do, they don’t have unique or special inventory. For the best competitive advantage, you and I can use the same portal to save and reject properties.
Next, you will want to tour the homes you like asap. We will want to be clear when offers are due and whether there are special conditions that need to be included in your offer package, which is an opportunity for me to establish a rapport with the listing agent and convey that I’m fun and easy to work with. This can be very effective in the event that our offer is similar to another one and it comes down to which agent they want to work with.
Finally, it’s critical to keep in mind that this isn’t a market where you’ll find much success in bargain hunting. You must assume there will be multiple offers (about two-thirds of homes are getting multiple offers right now) and bring your highest and best offer, don’t count on fairness and counteroffers and thoughtful consideration of your feelings, it is incredibly competitive out there and sellers have many options.