First-time home buyers in California often have a lot of questions about the different requirements…
Real estate markets across California are very competitive right now, as inventories continue to fall short of demand. As a result, home buyers need to use every advantage they can find to get their offers accepted by the seller.
Here are some tips, suggestions and strategies for getting your offer accepted on a house in California’s competitive real estate markets.
1. Make a strong offer based on recent sales data.
Home buyers planning to buy a house in the near future can benefit from doing some in-depth market research. Among other things, this means reviewing recent sales activity in the area where you want to buy. This will help you make a strong offer, and it could increase the chance that your offer will be accepted.
This is what real estate agents and other industry professionals refer to as comparable sales, or “comps.” A comp is basically a home that sold recently in the same area where you want to buy. It is also similar to the house you want to purchase — or at least similar to the size and style of home you desire.
Making a strong offer backed up by recent sales data could also increase the chance that your offer gets accepted, even in the most competitive California real estate markets.
2. Be selective with contract contingencies.
Home buyers in California often include contingencies when they write up their purchase offers. In this context, a contract contingency is some condition that must be met in order for the transaction to be completed.
Financing contingencies are a common example. This gives the buyer a way to back out of the deal (without losing the earnest money deposit) if they have trouble securing their financing.
Home inspection contingencies are also commonly used in California real estate markets. Same concept, different contingency. This basically says that the sale is dependent upon a successful inspection that does not uncover any major issues.
California home buyers might want to be selective about the kinds of contingencies they include in their purchase offers. This is especially true in a highly competitive real estate market with limited inventory and strong demand — i.e., a seller’s market.
Sellers can be particularly wary of buyers who make their offers contingent upon the sale of another home. That’s because there is no guarantee the other property will sell in time, in order to facilitate the purchase of their home.
Purchase contracts (and the items that go into them) are an important part of the home buying process in California. Buyers should carefully consider everything that goes into the purchase agreement, and that includes any contingencies. When in doubt, ask your real estate agent for advice.
3. Avoid quibbling over “nickels and dimes.”
In a tight real estate market with limited supply, sellers have most of the negotiating leverage. That’s just a reality of the housing market. So it’s not the kind of scenario where home buyers would want to “nitpick” over contract specifications or sale price.
Home buyers in California have a better change of getting their offers accepted if they focus on the big picture — which is completing the transaction.