Are you really "ready" to buy, or are you still just dreaming about it?

If you want to buy a house, you have to win a contract, often against a dozen or more other buyers.  

I have previously likened home buying in a seller's market to war.  Hopefully, that's a stretch. It should be easier and more fun than it is, especially in this market.  

Let's continue to use that analogy...

Only you can decide if you are truly "ready" to win the illusive Purchase War. If you feel after reading the first half, you are "ready", please read further to decide if we are a good match to work together.  

What exactly do I mean by "ready"?

There are two weapons Realtor®s ask you to bring to the battleground when making a purchase - documents are the first, but most importantly your time!  

Your first weapon will be two specific documents, needed up front. If you are a "Cash" buyer, you will need only one.  Most of us need to obtain a loan, and the second is related to financing.  

PROOF OF FUNDS should be provided to your Realtor® as early as possible. This is solid evidence of your source and ability to pay for a house, or the portion referred to as your down payment. Smart Realtor®s will want to see that evidence before doing very much, if ANY work on your behalf.  You might not know your Realtor® very well, and trusting someone with that information is a leap of faith.  We understand, but it is a reasonable requirement if we are to commit our time to you.  Your Realtor® is your general!

LOAN APPROVAL, your second weapon should be recently obtained. Your Realtor® will want that in place, before you begin to look at homes.  

Ask your Realtor® to introduce you to at least two Loan Officers with whom they have a proven track record.  Once you have pre-approved with one of them, you may also seek one with a Loan Officer of your choosing if you wish.

Why do Realtor®s ask buyers to pre - approve with their own Loan Officer? Because it will be difficult for your Realtor® to "sell" you to a seller, unless you have proven yourself creditworthy to someone your Realtor® trusts, who has already proven their own ability to close on time.  Your Realtor®'s confidence in your Loan Officer as well as your own ability to perform must be evident, for a Seller's Realtor® to feel confident in you as a buyer. 

The second weapon you bring to your purchase is YOU!

Your attitude is your body armor.  Your availability and accessibility are your big guns!

Do you have text on your phone? That will be important ammo!

You will want to be as accessible as possible. Can you remember to carry your phone, keeping it turned on, and answer communications in a reasonable time?

Do you have a scanner/printer at home? More ammo! If you don't, please make sure you have access while at work, and can be where you can reliably access phone service and/or email all day and evening from the time your Realtor® begins writing contracts on your behalf..  A flatbed scanner costs about $60 and is extremely easy to operate, so you will have less stress if you have one.  Can you use online signing?  Yes, in some cases, but Brokers don't always accept online signatures.

Are you willing to pay 20% over list price?  This is the reality in many parts of the East Bay area. If that sounds crazy, you may not be ready. Ask your Realtor® if this is true where you are interested in buying.  If so, you probably don't even want to look for properties within 25% of what you plan to spend.  Figure out what you are comfortable spending and go backwards. If you want to stay below $500,000, might not want to look for anything over $400k,  Low pricing by 20% or more is a crazy marketing strategy particularly common in Berkeley and Albany.  From 5% low to 5% high is more common, but that is less warlike!

Are you serious enough to take vacation from work if necessary?

Each individual offer might include 2-300 pages of information for you to review and sign off, before your Realtor® can write or present an offer on your behalf. This involves HOURS of time on your part.  Can you find time to commit to this process?  This is also a huge commitment on your Realtor®'s part!

Can you pay even more than first offered?  If there are more than three or four offers, your offer may not stand out enough for a clear win in the first battle. The fittest of the group may meet head to head for another round.  Usually this is just a price war, but shortening contingency periods, may also help to create a winning contract.

You may not win your first offer battle.  It might take sever offers before you really understand what it takes to get into contract. How aggressive are you willing to be, to win?

Are you willing to make greater than the traditional deposit? Perhaps as much as $50,000?

Are you willing to focus intently on the inspection process?  Within as few as five days after acceptance, you may put that huge deposit at risk.  There is little or no negotiation with sellers in the current market.  You will want to have enough time to invest in gaining knowledge of the property, but offering a shorter amount of time than others may be what it takes to win.

Escrow, your major battle, is not an "if I feel okay today" after work, kind of thing. Once you are in escrow, four weeks of what might feel like marathon combat, mostly during business hours will ensue.  The first and the last weeks, may be among of the most intense weeks of your life!

When you enter contract it is best to make your Earnest Money Deposit immediately. This tells the seller you mean business, and adds to the otherwise limited power you and your Realtor® will have during the Escrow period.  More than likely, someone else is waiting in line for you to fail.

(To put your mind at ease, your money is safe in Escrow, until we release all contingencies. It comes back very quickly, if you cancel your escrow.  The seller can't move forward with the next buyer while it is still there, so they want Escrow to give it back as quickly as possible.) 

If vacation is not reasonable, can your normal job be back-burnered for a week or more?

During your inspection period, you can probably expect to go to your future home several times that first week, defining what "as is", really means.  This may cost you $1,200 or so, perhaps more, in addition to your time.  If you don't like the information the inspections provide, are you able to walk away from that investment?   Even if there are inspections already available you will probably want to invest in your own.  Your inspections are your parachute!

Can you continue to do what you need on a daily basis to stay on schedule?  A while back I was in contract with a Buyer who offered just over listing price. During the escrow, a much larger offer came in - for $77,000 more than the original contracted price.  We prayed for the original buyer to fail!  If one deadline had been missed, the original contract would not have been honored. 

Do you have the resources to bridge the gap between appraised value and your offer?  You may have to if your property doesn't appraise for the value you offered. Houses often don't appraise for offered value, when in a rising market.  Consider this part of your strategic planning!

Throughout the whole process, you will have two fronts. Your Realtor® manages one, your Loan Officer the other.  After the contingency period ends, you will be focused primarily on your loan.  That is a battle for a different blog, but will remain a steady demand of your time and energy throughout the entire process, with a final push the last week.

If you do all of the above, you will conquer and will take possession of your own land and all of its improvements!

Or, you might just wait until the war is over, and then it won't be so tough... it might be at a cost to you of about $5-10,000 a month, added to the sales price of an average Bay Area home... but at least you won't need a warrior to win and it will definitely be easier on your blood pressure.

This analogy seems dramatic, but it is pretty accurate.  If you think you can manage all of the above, it's time to choose your Realtor®, your combination general and wingman!

As your Realtor®, why chose me?

If you have actually read this far, but don't believe what I have written, you can probably find another agent, willing either to sugar coat the process or who simply doesn't understand what lies ahead. Another agent may tell you what you want to hear just to win your trust and you may find yourself bidding against a buyer represented by a Realtor® like me.      

I must do a great job for you, nothing less. To begin with, I have a great team to help you prepare.  Once we have you ready, I will write the lowest offers I believe will win.  At the end, I want you to feel you paid the lowest possible price, for the best possible house.  Once in contract, I will do my best to protect you from the stress I describe above, as well as unnecessary drama from the listing side of the transaction. 

No Realtor® can guarantee to get you into contract.  I can guarantee that you will be considered seriously, if I make an offer on your behalf, even if you are a borrowing buyer bidding against cash.  I submit only strong offers which sellers and their Realtor®s love!  And most often, I do win, (if you really have done all that I suggest.)

I learned by bidding against more experienced Realtor®s, who actually knew how to write a contract. Once, I made about 24 offers for a buyer. That buyer was ME!!!  I didn't know what I was doing.  When it became personal, I learned quickly.  I am sitting in the home purchased in a previous seller's market as a result of my personal education.   Many other buyer's agents still have not yet figured it out what it takes to win.

I have a naturally competitive nature and you will want that in your Realtor®. I like to win for the sake of winning!  Other agents will be competing against warriors like me, if not me.  We warriors are the only ones winning right now.

I will ask for referrals when we are done, because that is how my business grows.  I won't get them, if you don't feel I did my job on all fronts.

Last question:

Are you ready to accepting the responsibility of hiring me as your Realtor®?

Wow, did I just really say that?

The lack of listings in this market has made it more difficult for Realtor®s to make a living. Not just me, all of us.

I only succeed by closing.  I have few problems getting buyers into contract. Unfortunately, keeping buyers in contract has become somewhat of an issue!

Much of my time in 2013, has been with buyers asking me to write offers when they were not truly ready to move forward.  They won, I opened escrow, and then they walked away from great homes, simply because the price it took to win, scared them off. They didn't fully believe the value would hang in there for the price it took to win. Sometimes we don't even get to the acceptance before the buyer got cold feet.  I can empathize with those buyers, but I can't continue to work with that type of buyer for free.

If we win a contract, you actually need to close. If you walk away simply because you can't stomach what you offered to win, I may ask you to pay me for my time. If you are not willing to consider my time that valuable, I am politely asking you to work with a different Realtor®! I am a professional, and I will do my job.  You are asking me to make a commitment of my time to you. I am asking you to make a commitment to me, that you will only use my time in good faith.

If you respect and value me enough to move forward, then let's get you ready. By then my velvet glove should be back from the cleaners!

A Sellers' Market is WAR!!! (My Velvet Glove is at the dry cleaners!!!)

I have been gently trying to convey to different buyers of late, how competitive the market is for purchasing at this moment.  I don't want to upset them with me personally to a point that they seek another agent, nor do I want to scare them into quiting the process entirely.  But...

in some cases, the latter is what is best for both parties involved. 

To be perfectly honest, I my velvet glove is at the cleaners, trying to get the blood stains out!  I try, but if that is what you really need, (more than a house) we are not a match.  You are going to get the truth here.

Folks, the fun and games have ended for buyers. All the gloves are off, not just mine!  This is all out WAR! 

War isn't fun and it's sure not pretty.  But I am not the foot soldier - you are!  I am your Captain, or perhaps your sword, leading YOU into YOUR battle.. You have to have your tank and body armor on, too!  

If you are thin skinned, or simply not competitive, this is not your time to buy.

Here is the reality of buying right now in most bay area communities:

There are a more than a hundred buyers walking though every open house in a weekend!  Thirty will likely ask for more information.  Half of those will place offers on a fixer upper, and more on one that is move in ready.  If it is a single story, you will be competing with retirees with CASH.   So ONLY those who REALLY want a new home are succeeding in this market.  Only agents who have experience and smarts are winning for their buyers! 

As mentioned, sometimes my buyers feel like I am too strident in my efforts in conveying this message and perhaps legitimately so.  Nonetheless, I would rather a ruffled or unprepared buyer walk away than ask me to do battle on their behalf, with neither of us prepared.   

I have been foolish in the past, in setting a precedent with a few buyers, by touring with them without a full loan package completed, (including a Desktop Underwriting certificate). I shouldn't have even made a phone call or looked at a disclosure package when they were not ready.  It became a waste of both of our resources because nothing materialized from it except for frustration and disappointment.

Yes, sharing some of this is with you is selfish on my part.

This is my job, and how I make my house payment, and I feel the need to have my time valued and respected.  But shouldn't you as well????  

I want to spare you the disappointment of losing a house you love, because you are not geared up properly.

Until you are fully committed, and geared up, I can't go forward on your behalf.  It's not simply that I won't.  I just can't.  There are too many willing to be ready, and it is in both of our best interests for me to focus on the ready, rather than the almost ready.

Buying in a Seller's Market...

Wow, times have changed since I first started this blog.  Sometimes I get so busy helping clients that I don't look at it, or contribute to it for a long time. 

I have had my best professional year, this past year.  I sold one home for over 1.5 M, which made for a great year. 

But the end was tough!!!

There is NO inventory.  That creates a seller's market with dramatically rising prices!  Vallejo topped out in Dec, 2009 at 1204 homes for sale.  It bottomed out at 77 homes according to Solano Association of Realtors, and we are only in the 125 range today.

Vallejo is just one city, but it is that way all over CA right now.  I just sold two in different parts of SoCal.  Same story.

I have one buyer who has made 7 offers without success in entering into contract.   She is picky, yes, and she has a right to be, but... 

But she comes in just a little bit low every time. (She is not listening to me.)  This is a rising market and she is just below the top of an upward spiral.  An offer at $300k a few months ago would have bought a home that now sells for $400k.  So it is expensive, not to go big.  Now there is not much coming on the market that she can still afford, or she has to lower her expectations to buy now, or expect to commute a lot farther.

So GO BIG.  I will do what I can to bring the price down with appraisals, etc, when possible. 

You might say I am being self serving by saying "go big".  Not true.

If my buyer had offered $300K instead of $285K for a home 3 months ago, she would have closed.  Now if we buy the same type home, it will cost $400k.  I make more by waiting. 

But rather than wait, I would like to see you in a home now, before prices go up further.  I will get you your home for the least amount I can to get you into contract.  I promise.