Bargains, bargains, bargains, get your bargains here! Unfortunately for buyers of homes in the south peninsula cities of Los Altos, Mountain View, Sunnyvale and Cupertino, the bargains are few and far between. The Bay area was entirely excluded from a recent Forbes article, Best Cities For Bargain House Hunters. Does this mean that there aren’t any good buys to be had in our area? Hardly!
Market Value is defined as the price a buyer who is ready, willing and able will pay for a home that has been fully exposed to the market. The key phrase is “fully exposed.” On the buy side, buyers must be recently pre-approved for their loan and educated about the local market. On the sell side, the seller must have the home prepared for sale, price correctly for the market and fully exposed to the market.
What makes a “good buy?” Most buyer’s want to purchase a home as far under market value as possible. Most don’t succeed. I have yet to find a client who wants to pay above market. How can buyers position themselves to buy a home under market? Here are 6 tips that will increase your odds of getting a better value in Los Altos, Mountain View, Sunnyvale and Cupertino.
- Buy a home off market. Homes that aren’t fully exposed to the market sell for less. Note: there are only a few homes (usually in the higher price ranges) each year that sell off market, so don’t hold your breath!
- Look for homes listed by out of area agents. These agents tend to be relatives or long-time friends of the sellers. They know just enough about our market to be dangerous, dangerous to their own client’s/friend’s pocketbook. They rarely understand the intricacies of our local market, neighborhoods, comparable properties, pricing and trends. This is a great example where knowledge is power.
- Buy a home that is listed too high. Homes that are listed too high tend to sit on the market too long and eventually, after several “price adjustments,” sell for less. The longer the home sits on the market the more unattractive it gets, the better the value for a buyer.
- Look for a home that isn’t properly prepared for the market. Try to find one that isn’t staged and/or looks and smells like a dump. Cosmetic repairs are the least expensive to do and bring in the most value. Although most of are homes locally are staged, there is still a fair amount of them that aren’t. You don’t need to look hard (or breathe too deeply) to tell which homes aren’t prepared well. FYI, studies shown that staged homes sell for more than homes that aren’t.
- If you can time your purchase, buy during the the winter months of December/January and the summer months of June-August. If you analyze the annual real estate sales cycle, the market conditions in these months tend to produce better results for buyers.
- Buy properties where the sellers haven’t completed pre-sale inspections. When Sellers don’t get pre-sale inspections, they open themselves up for potential re-negotiations down the line. These negotiations tend to favor the buyer.
If I had a crystal ball, a Ouija board or could read palms, I would be better able to advise clients on a specific time to buy a home. Given that our market is strongly driven by the amount of inventory available, now is a relatively good time to buy. Our market in select neighborhoods still favors sellers, but not as strongly as in March/May 2007.
For your information, Salt Lake City tops the list of the top ten cities for bargain house hunters. Listed below is the complete list with links to real estate professionals and/or lenders who can help you find a bargain in their city:
- Salt Lake City Utah Salt Lake City Real Estate Blog
- Raleigh North Carolina Raleigh Real Estate Talk
- Orlando Florida Blog Orlando Avenue
- Charlotte North Carolina Chad Huck Real Estate Blog
- Phoenix Arizona Phoenix Real Estate Guy
- Seattle Washington Rain City Guide
- Las Vegas Nevada Very Vintage Las Vegas
- Jacksonville Florida Krista Fracke Real Estate Blog
- Richmond Virginia The804 Richmond Real Estate Blog
- Houston Texas. Fine Homes Houston