Today I want to discuss buyer strategies to get your offer accepted and tell you a little bit more about why we’re in this competitive market in the first place. The year-over-year median sales price is up to $715,000, which is a 19.2% increase. Here’s what’s driving it: Of the last 10 years, we are at an all-time-low inventory of 2,727 homes. That low supply is driven by high demand, which in turn is driven by low interest rates. Demand is so strong that I don’t see any change happening in the near future.
As a buyer, here’s what you could do to get your offer accepted in this competitive market:
1. Inspection contingency. Shorten your inspection contingency as much as possible. We typically will set ours to between five and seven days. We are seeing some offers that are waiving the inspection contingency altogether.
2. Appraisal. This has been a big issue in the past. Now that homes are starting to sell at these high prices, appraisals are back in line. We’re seeing a lot of offers with the appraisal contingency waived, saying if it doesn’t appraise at value, the buyers make up the difference. You could also set a cap on this.
3. Price. Something we’re now seeing is called an escalation clause, which allows you to automatically exceed a competitor’s offer by a certain amount, up to a cap amount that you set. Escalation clauses aren’t used everywhere in the country, but they are legal in California. I’d recommend checking with the listing agent about whether they’re comfortable with it.
4. Find a good agent. If you have an experienced agent with a good reputation and who has closed a lot of deals, the other agents are going to feel more comfortable and the transaction will close smoothly.
If you have any questions about today’s topic or real estate in general, don’t hesitate to contact us. We’d love to help you.