Facts about the current sellers’ market in the Bay Area:

Most buyers have a good idea of what type of home they are looking for, but they are not realistic about the price that they should pay for it.

• The majority of homes in the Bay Area are listed below their fair market value to attract more buyers and create a multiple offer situation.  Low-balling on a property is mostly not a good strategy in the current sellers’ market.   

• Most properties sell in a matter of days.  You need to preview the properties, review the disclosures and inspections, and make an offer in matter of a few days from the time the house hits the market.  You need to be vigilant, aware, and decisive in your home search. 

•  It is important to differentiate between your wants and needs ahead of time.  You may want a big backyard but are you willing to sacrifice a bedroom for it? 

•  As a broker, I advise you to take extreme caution in removing any contingencies but the reality of the current market in most areas is that the seller will only look at offers with no loan or appraisal contingencies.

Megan’s Game Plan: 

1. Buyer / Agent Kick-Off Meeting

2. Previewing Properties

3.  Writing an Offer and Negotiating

4.  Executing the Contract and Closing

1- Buyer / Agent Kick Off Meeting: 

• Shop around for your financing options and get pre-approved.  

 Before running your credit, I would like to preview your finances and give you some options regarding the best lenders – those that can give you a great rate and options aligned with your budget.  Mortgage lenders are not familiar with the accurate breakdown of the closing costs in each city or county and comparing different rate options from multiple lenders can be confusing.  As a licensed mortgage broker, I will review and compare options and explain the breakdown of the closing costs, compare different lenders, and take the mystery out of the mortgage process for you.  

• Review the components of the contract with buyers. 

‘The California Residential Purchase Agreement and Joint Escrow Instructions form ("RPA") is a legal document published by the California Association of Realtors ("CAR") simply referred to as the ‘purchase contract’.  It not only describes the terms of the offer and financing details, it also gives the right to buyers to back out of the contract in certain cases.  It also protects sellers in case the buyers’ timeline is extended beyond the terms of the contract.  I will go over the template of a contract with you when you are ready to shop around so that when you want to bid on a property, you know exactly what you are signing. 

•  Setting a collaborative search and communicating with you in real time. 

This private and secure online website will allow you to communicate your thoughts, request showings, and ask for more information from me in real time.  It also gives me a good idea of what kind of floor plans, amenities, and neighborhoods you like.  In addition, it will track the homes that you saw to find out how much they actually sold for.  This gives you a good handle on the market.  Our shared platform will track all of that for you.

2- Previewing Properties:

•  Open Houses  

There is more to the decision to purchase a home than just walking through it.  By previewing homes, I can listen to your concerns and in most cases, come up with a solution to make the process easier for you.   I recently worked with a couple who had just move to California.  I noticed they were shying away from homes that had a particular odor. The odor was coming from the cedar wood used in closets.  Cedar has a balsamic undertone than bothers some people.  Older homes mainly used cedar in the closets to repel moths.  Homes built after 1985 typically used odor-free plywood or oak.  By narrowing their search to homes built after 1985, they finally got the home that they wanted - built in 2004.  

• Disclosures

Sellers’ disclosures, inspection reports, and minutes of homeowners’ association meetings are some of the major documents that need to be reviewed to give you some idea about what may lie beneath the surface.  It is your responsibility to review the documents, but I always review these documents as well to understand what your considerations may be. 

3- Writing an offer and negotiating:

“Everything is negotiable - whether it’s easy or not, is another story!”

 As a buyer, coming up with the offer price is your sole decision but agents can provide a detailed market analysis by comparing the most recent comparable homes sold in the area so you can make a decision that is right for you and aligned with market demand.

Not all offers are accepted right away.  Sellers want to get the best and highest offer and they will negotiate it with one or more buyers at a time.  Effective negotiation is a skill.  A good negotiator must be strong-willed, yet presentable, a good listener, and articulate.  By default, some people are better negotiators that others. 

 A typical offer may look like this:

Presenting the buyer’s offer to the listing agent.

Ensure buyer’s lender is available by phone in case financing questions are asked by the listing agent. 

Respond to and negotiate counter-offers from sellers. 

Adjust or revise certain terms between parties and prepare addendums to contract. 

Prepare new counter-offers / addendums on behalf of the buyer.

This step may require a few rounds of negotiation. Once parties agree to all the terms on the contract, the house is officially in Pending status and no other offers will be considered unless, as a buyer, you are in breach of contract.

4- Executing the contract and closing: 

Each contract has a specific timeline for closing the escrow and delivering the keys.  Once you are in contract, the clock is ticking the next day.  This process involves keeping different parties in the loop, lots of follow ups with title company, lender, appraiser, and inspectors and making sure every milestone in the contract is met on time so, as a buyer, you stay within the terms of the agreement.  If the buyers’ obligations in the contract are not met on time, the seller has the right to cancel the agreement and the buyer may forfeit the initial deposit.  This process is the most important part of my job, and I will hold your hand until you get the keys to your home!