Despite the downturn in the economy, the entry-level real estate market in many San Diego communities remains competitive. It’s not uncommon for homes and condos under $400,000 to have multiple offers. This is especially the case for bank-owned properties, which are also known as foreclosures or REOs. Some banks seem to be using a strategy of pricing a home below market value, which attracts many potential buyers to come see the property, and often results in multiple offers. It’s not uncommon to see 5 to 10 offers on bank-owned homes within the first week a property comes to market. Even homes that are priced at fair-market value are generating multiple offers.
So what can home buyers do to improve their chances of getting a home?
Be Competitive. Keep in mind that your offer will probably be compared to other people who also want the home or condo.
Pricing. If you Realtor advises you that there are multiple offers on the property, get your Realtor’s advice of what price range may get the house.
Cash is good. If you are fortunate enough to not need a loan to buy a house, this will help greatly in the current market. In fact, I’m seeing many investors get back into the San Diego real estate market. Many of the winning offers in this market are investors who have cash to buy the home outright.
Loan Down Payments are Good. Most people don’t have all the cash they need to purchase a home outright, so loans the the most common way for people to get a home. If two buyers competing for a home offer a similar price, a seller will prefer an offer with a larger loan down payment than an offer with a smaller down payment.
Loan Pre Approval. From a seller’s perspective, they want to select an offer that will be successful in completing the purchase. Make sure you have a loan pre-approval letter from a well-known lender.
It takes time. Most home buyers will not get the first house they bid on, unless a lot more homes come on the market.
The deadline for the First Time Buyer Tax credit is April 30, 2010, which means that you need to have an accepted offer by that date to qualify for the credit. So be aggressive in seeing homes, making offers, and your chances of getting the home you want will greatly increase.
