Real Estate Roundup with Sharon Alva: Spring must be early
It must be spring! The trees are flowering, the birds are singing, and the housing inventory is going up. In fact, in Alameda 14 of the 91 single family residences now for sale entered the market in the last week. In the residential income category, four of the listed 18 just came on the MLS.
Buyers have been crowding scarce open houses for months, but this weekend they will have something to look forward to — new real-estate blood. And the properties being sold are quite nice too. Even though we still have twelve short sales and twelve bank-owned properties in the bunch, the condition of most of these properties is promising.
If you are a buyer who has been dispirited by the lack of houses to look at, this is your chance. Loans are still great and the tax credit to buyers is still in place. Sellers are smart to get out there as early as possible because soon, other properties will crowd the market more. But what should buyers be looking out for with this new crop of houses?
Since many sellers have been holding off selling for two or three years, many have come to very realistic prices. Trying to get the best deal and write low-ball offers is a dead end. You will find yourself competing with other offers, better written and financed. Yes, there are multiple offers. It may take a property a while to pop and after three weeks on the market, or even longer, offers start pouring and buyers find themselves competing for what they thought was going to be a bargain.
On the other hand, some sellers still can’t believe the loss of value from the 2005 high. When that is the case you can either go in with a realistic offer, or wait it out. After getting stale on the market the low-ball offer becomes a real option. Usually after 40 days sellers start re-adjusting their expectations.
With economic times being harder the last few years, some home maintenance may have been put off. Do not rely on any dated pest or home inspections. Make sure you are creating a budget for yourself that allows you to update and maintain your home. Roof, termite, and window work may have led to bigger issue over the years and you want to make sure you are fully aware of what the condition is, and what needs to be done to rectify the situation.
WATCH THE LOAN MARKET
Do your loan research early. Sellers and their agents are weary of loans that have very little down and need a credit. Deals fall apart more often these days, which leads sellers to incur additional costs. I hear more and more Realtors advise their clients to take the best offer, not the highest offer. Taking a high offer that falls apart can be expensive. Having 20 percent down is still the best option.
An FHA loan with 3.5 percent down is not a deal breaker by any means, but make sure you have some reserves so when the listing agent speaks to your lender to verify your ability to buy, your lender can speak with certainty about your ability to go through with the transaction.
Your preapproval letter, now more than ever, needs to be strong. Have your lender mention that down payment and closing costs have been verified and if your credit score is good, flaunt it.
SHOP OPEN HOUSES
There is no commitment in attending open houses and now that there are more properties, there is more to see. Spend the weekend checking out what’s out there. Keep a binder of what you’ve seen, with notes of what impressed you. Once something sells, note the sales price on that original open house flier. This way you will start having a sense of where the market is going. Before I got into real estate I was such an avid open house visitor that I could guess the selling price of a house after a 60-second visit, long before it went into contract.
Alameda, and in fact the East Bay, has not had a great online source for open homes. The Alameda Journal has the print version. Alain Pinel Realtors has a new online service. Not all open houses are listed, but more and more Realtors are including their open homes in their MLS listings which means services like APR’s Open will be improving.
Naturally, the best way to get comprehensive open homes listings is if your agent e-mails them to you each week. I do one mailing for Alameda open homes and one for other East Bay for clients who want to receive the lists.
Happy Springtime, home shoppers. Even if it is a little early.
Sharon Alva is a real estate agent with Alain Pinel, living in Alameda. You can reach her at firstname.lastname@example.org.