If you are a buyer looking to move into San Diego (or even a long-time resident looking to make the plunge into a mortgage), it can be intimidating to looking for a home to purchase.
The San Diego real estate market has been hot for the past 6 to 8 years. It seems as though every few months there’s a new headline announcing that the median home price in San Diego broke another record. It seems like there is no end in sight to the San Diego real estate market.
However, while the market is hot and a seller’s dream, that has also attracted a lot of competition. While prices continue to surge, both for home sales and rentals, competition is also becoming fiercer.
There’s a good chance you’re thinking, “those are for million dollar homes and condos, I’m looking for a modest two-bedroom around $350,000 to $650,000, I should be fine.” But you would be wrong — the fiercest competition for homes is in the $350,000 to $650,000 price range.
Buyers compete against one another and often push sellers to sell their homes for a few thousand above asking.
However, price isn’t the only sticking point for a seller. With these tips, you can put your offer in the best light and emphasize not only a fair price but a smooth transition for the seller. Here’s how to make an offer home the seller will love.
Tip 1: Put Your Best Offer Forward
Price is the most important part of a sale. The seller will have a range (or specific price) and try to match that as closely as possible. If you think you can underbid, then underbid. If you think there is a lot of competition (which is more likely), overbid a few thousand.
Let your money be the best foot forward, then fortify your offer with the following tips.
Tip 2: Get Pre-Approved for a Mortgage
Pre-approval is huge for a seller. Unless you plan on using cash to purchase the home, you are most likely going to need to obtain some form of financing.
Sellers may love you, and they may love the price you offered, but the entire deal falls apart if your bank does not approve the mortgage. Including pre-approval letter with your offer is an excellent want to illustrate that you are ready for a mortgage and able to close escrow as soon as possible.
Tip 3: Cater to the Seller’s Needs
Everyone has a reason for selling their property and every sale is unique. We work on our end to communicate with the listing agent to try and get any sort of insight as to the seller's motivation and work to cater our offer to fix their problems.
For example, maybe a seller needs to sell the home as soon as possible (in which case pre-approval for a mortgage could be helpful). You could work with your lender to shorten the timeline to get the seller out as early as possible. You can also offer the reverse, as the seller may need more time to close on a home before selling their previous home to you.
Tip 4: Shorten Contingency Periods
Throughout a transaction, there are contingencies. Contingencies are events that must occur before the transaction is finalized.
For instance, you are entitled to an inspection. You could offer to shorten your time to inspect, to speed up the escrow process. You can also shorten the time to conduct an appraisal and for the bank to verify the cost of the home (for the loan).
There is also a loan contingency which is the period of time you have to get your finances in order. While there are many more contingencies, these are the most common.
In California, the standard inspection contingency is 17 days but this period and all of the others can be adjusted. A shorter period is attractive to sellers because the seller can feel more confident that the buyer is going to commit to the transaction and there is less time for the buyer to back out.
Tip 5: It All Comes Down to the Details
There are a plethora of additional expenses to buy a home. In San Diego, the custom is to split these costs between the buyer and seller. However, you could offer to cover some additional costs for a stronger purchase offer.
It will increase the price you pay by a few thousand dollars, but more importantly, it may give that extra bump the seller may need to close with you.
If you are looking to buy a home, don’t overlook the realtor. A great realtor can help you tailor your offer to ensure that it stands out from the crowd. The team at Steele San Diego Homes bring a personal touch to our services, including incorporating technology to help as many people as possible find their dream home without drowning themselves in extra work.