Everybody wants to get a deal in this real estate market.  To date no one has called me and said “Please find me something that is over priced and comes with numerous problems that will cost me a fortune to fix”.  We all get it.  No one wants buyers to over pay in this market.  I don’t want you to over pay in this market.  But if you want to play, you have to be reasonable.   The alternative is that you are shut out.  The market will move against you and it’s over.  The fat lady will be singing and you don’t even have a ticket to the show.

What?  I’ve spent the last several weeks arguing debating with buyers what an acceptable purchase offer would be.  I’ve laid out the facts in every way I can imagine, but because it’s not on the internet no one believes me.  So I’m putting it out on the internet so buyers can find it and feel good about listening to me.

Real estate is having a sale.  It’s your Nordstrom annual sale.  You are going to want to get up at 7am and come on down here in your bunny slippers.  This is it.  Prices are down, money (interest) is cheap and it’s not going to last.  The only difference is that Nordstrom can tell you the exact day their sale ends and I don’t know the exact day this will be over with, but I promise you it won’t last.

Housing Affordability

If a picture is worth 1000 words, here is your 100o words.

Now, in 2008 Housing Affordability was at 137.8 a 20 year high.  January of 2011 it was 191.0.  It went UP from the last number on this chart.  Unthinkable numbers.  This will not last.  That’s the thing about business and charts, it’s cyclical.  An all time high is always followed by a drop.  Now is not the time to be tripping over a dollar to pick up a nickel.  Lowballing in this market will only get your shut out.  Some properties are now getting multiple offers.  Do your homework and bid within the comps.  If the comps show the property to be underpriced, bid within the comps.  Especially on short sales.  Banks aren’t stupid.  They aren’t going to take a low ball offer.  They would rather foreclose if nothing else is forthcoming. Repeat.  Banks aren’t stupid.  They have charts and matrixes and layers of management to be sure that they get as much as possible on a short sale.  If the short sale offers aren’t fair and reasonable, the bank will foreclose.  Why?  Because the insurance on the loan will make them whole.  They don’t need to sell short.  Bid within the comps.  If it’s a multiple offer scenario, leave the appraisal contingency in place as a stop gap.  If the appraisal comes in low, negotiate the price back down.

A thermometer I always recommend is put yourself in the sellers shoes.  If you received that offer, what would your response be?  Now, what number would be just enough to entice you to get off of your couch and answer the phone?  Bid that number.

Now is the time to pull up your big boy pants and call your lender, your agent and your landlord.  It is not going to get any better than this.  If you sit paralyzed on the fence because of something said on the 6 o’clock news or something your read over at some supposed “consumer” website advising you not to buy real estate the train will have left the station and you will still be on the platform.

If you’re looking for an agent call me and if I don’t work the area, I will get you a referral to a qualified agent in your area.  Now is the time.

You can reach me at 925-381-2998