Like much of the country, the East Bay is plagued with a short supply of housing. The National Association of Realtors reported recently that inventory for pre-owned properties is down 10.4% from last year nationally. But demand and price is not predicted to decrease, Javier Vivas, director of Economic Research for Realtor.com forecasts home prices will increase in 2018, but at a lesser pace than in 2017. Vivas also says next year is anticipating a more dramatic emphasis on the housing shortage.
So, homebuyers, there are quite a lot of you, and few homes for sale, what will you do?
There are some ways you can combat this shortage and lack of options, and the biggest one is… your realtor. Not what you thought I was going to say, hmm? Let me explain.
It’s a misconception that realtors are just the people who help you find houses…*reminds self not to be insulted.* Technology has given everyone with an app and eyes the ability to see homes for sale, so this misunderstanding is really undervaluing the realtor. The first analogy that pops into my head is someone saying they can simply play “Cones of Dunshire” without learning the rules…and win. (For those who don’t understand my reference and haven’t already googled it, just sub in “an incredibly complex game.” Side note, I’m not ashamed of this reference. Ok, only a little bit.) In addition, the rules of the game are constantly changing! New forms, new laws, new requirements every few months due to constant lawsuits and our lovely litigious state of California. Losing the game costs you thousands, even hundreds of thousands of dollars, or land you a money pit, fraught with constant problems, or just don’t play the game and don’t buy a house.
I could continue into the details and other possibilities of this analogy but I’m working towards the solution to the buyer’s struggle. Now, not every realtor is created equal, mind you, because staying immersed in the industry is key. Neighborhood expert, years of experience, excellent response time, knowledge, and communication skills- (*batting eyes*) all desirable strengths not every realtor possesses. Yet, it’s when you are ready to make an offer that your realtor really starts playing the game for you…
(I’m going to go over the first point below but you will have to tune in next week to learn the next points.)
Writing an Offer: SPOILER ALERT! You may not get the house even though you are making an offer. It can be hard on buyers who make multiple offers and 2 years goes by and they are still putting in offers with no luck. It’s not uncommon, but your realtor can do what you cannot, and that is, work out the truth of the matter for you. Listing agents are working for the seller; they should be trying to get the seller’s the best possible terms and price. (Price, price, price, always overshadowing poor terms.) Terms are SO important! Whilst terms are constantly passed over for price, we prove time and time again that terms are more important than price in many instances. Examples: Rent-backs, inspection contingency dates, earnest money, down-payment, appraisal, loan, government mandatory compliance, quick close, I could really go on and on…and then there’s “all cash” and price. Now the order of all these things and many more go in a different order of importance to each seller. Your realtor will seek to find out for you the order of these items from most important to unimportant and that is where skill, tact, and negotiation come into play. But your realtor needs to be knowledgeable and experienced to help you understand the risks of the concessions you may be offering. Terms are written in every offer, by default, even if you are revoking them, you are still using them. So, you can’t just ignore them. We understand how to use them to your advantage.
Some people avoid having to use their own realtor and instead use the seller’s, because you know, they already know the terms the seller wants so they’ll just *bloop* put them in, and whalla! I’ll get a house! So I’ll repeat myself: Listing agents are working for the seller; they should be trying to get the seller’s the best possible terms and price. Yes, should is the word of emphasis here. The listing agent should be working towards the highest price for the seller and the most aggressive concessions; and since they are interviewed, hired, and being paid by the seller to look out for the seller, if they are doing their job, they won’t be looking out for the buyer. They are not a malevolent person, they just can’t, as they say, “serve two gods.” Using the listing agent doesn’t guarantee you’ll get the house either. Another offer with say, better terms, price, or a nice handwritten letter with a picture of the family and their adorable black Lab pup could take the cake over your offer. It’s the seller who decides after all, and they happen to be a dog lover.
If this first part sounds like a headache or difficult, well it is, but you’re in luck! Because you don’t have to navigate buying a house this way. Karen Richardson Group makes the whole process look easy and run smoothly. Since we take care of all the ins and outs, including this one little snippet you just read about, we know the best possible avenues and present you with the options that need your focus.
Sources: RISmedia.com, NAR.realtor, and Realtor.com