14 Ways to get your offer accepted
How do you get your offer accepted in a hot seller’s market? Find out how! #1 Non-Contingent Offer The #1 way to get your offer accepted in a hot seller’s market is to make your offer non-contingent on the sale of a home. If you own a home already and you’re needing to sell that home first to buy that replacement home, you cannot make the offer contingent on selling your home. Maybe if you’re in escrow and you’re closing in two days and you still want to throw a contingency on there, potentially could do that. But otherwise, it’s just not being accepted in today’s hot seller’s market here in San Diego. Make sure that you prepare for that. And there’s different ways to overcome that. Ways such as moving into a short term rental, giving yourself a rent back when you’re negotiating with a buyer on your home. To sell that home, you have time to find a replacement home and move out. Another great way to overcome this is with our “buy before you sell” one Trade-in Program that we offer through a partner. This allows you to actually buy your replacement home first, using the equity from your existing home, move into it, and then sell that home. If you’re interested in that, please reach out and let’s talk about it. #2 Turn Yourself into a Cash Buyer The second thing to do is to turn yourself into a cash buyer. If you’re financing the purchase of your home and you’re concerned about getting beat out by cash offers, You can use our Cash Offer program, to turn yourself into a cash buyer. This is a powerful program to become a cash buyer and get your offer to the top of the pile. #3 Reduce or Remove Appraisal Contingency The third thing to do is to remove or reduce your appraisal contingency. The appraisal occurs when you are getting a loan on the home, a lender will order an appraisal and they will evaluate the value of the home to make sure that they’re not lending too much on the home. Well, in today’s hot seller’s market, it’s very common for homes to sell over ask price. And so sellers are concerned that the home may not appraise for the value that you’re offering out. Be prepared for doing one of two things: first is to reduce the appraisal contingency. The standard is 17 days. You want to get that down closer to 10-12 days ideally. The second thing is to remove that appraisal contingency entirely! Meaning you are willing to come up with the cash to cover the difference between what the home appraises at and what you are buying it at. That can be difficult for a lot of people. But that is certainly a way to get your offer accepted. In fact, right now, most offers are not being accepted unless they have the appraisal contingency removed or at least some sort of a gap coverage in place. #4 Reduce or Remove Loan Contingency The fourth thing to do is to remove or reduce your loan contingency. The standard for a loan contingency is 17 days. You definitely want to get that down to at least 14 days, preferably 10 or 12 days. If you’re working with a lender that can move quickly during the escrow process, you can certainly do that. The lenders that I work with are able to do that. That’s going to put you in a stronger position, the shorter, the loan contingency, the better going back to the appraisal contingency, reducing contingency periods. It gives the seller more assurance that you’re going to close on the home quickly, and that you’re actually gonna be able to do it. They know within 10 to 14 days that you’re going to be able to purchase the home. This is why we’re reducing loan contingencies. The other option is to remove the loan contingency entirely. If your lender has given you a fully underwritten preapproval and they feel fully confident that you’re able to close on the loan, then you could go ahead and remove that loan contingency. You have to feel comfortable with doing that, but some of the lenders that I work with do give fully underwritten pre-approvals so that you can be confident knowing that you will absolutely close on that home. That can certainly be a winning strategy because it alleviates the fear that a seller may have. You may not be able to actually obtain financing and helping you compete against cash offers. #5 Reduce Inspection Contingencies The fifth way is to reduce the inspection contingencies. I generally would not recommend that you waive your inspection entirely. You always want to get in there with a home inspector to evaluate the home and find out what underlying issues there might be, that you’re just not aware of whether that’s foundation issues or problems with the windows or problems with the major systems. You always want to know what you’re getting into, but you want to make that as short of a period as possible, typically 7 to 10 days so that we can get through it quickly and move on to the loan contingency and the appraisal contingencies and close on the home. #6 Provide a Rent Back to the Seller The sixth way is to provide a rentback to the seller. This might be a combination of free or paid rent back. Now we can’t go over 60 days unless you’re coming in with a cash offer. Otherwise it turns into an investment property and investment loans, which is a whole other ballgame.It might be 2 weeks of free rent back or a month of free rent back. And then maybe a couple of weeks of paid rent back, some combination there up to give the seller a time for them to move out and onto their next home. #7 Call the Listing Agent The seventh thing to do is to make sure that your agent is calling the listing agent and building rapport with them. They should be finding out what is truly important to that seller. Is it a reduced escrow? Is it a paid rent back? What is it that’s important to them? Is it simply the highest price? Then they should continue to build that rapport so that they know that when you submit your offer, your serious, agent is super communicative and they know that it’s going to be a smooth escrow process and they’re going to get the deal done. That’s always the most important thing at the end of the day is to get the deal done or both parties. #8 Reduce Escrow Length The eighth way to get your offer accepted is reducing your escrow timeline. Typically an escrow is going to be 30 days. Oftentimes sellers want to get their money sooner. So you may want to go in at 21 days or maybe even 17 days. If you’re going cash, 10 to 14 days, and then this can come back into combination with that rent back. They get their money sooner, say, 17 or 21 days, and you close escrow. They know the deal’s done, they got their money, and then you give them the rent back. So they have time to move out. That can be a fantastic combination to get your offer accepted. #9 Pay over List Price The ninth way is to be prepared, to submit over list price in a hot seller’s market. It’s super common for the list price to just be the opening bid amount, be prepared on single-family homes to be paying $25k, $50k, $100,000 over the list price sometimes higher, but just be prepared for that. With condos, it tends to be less. Somewhere in the $15k to $25k, sometimes $50,000 range, but just be prepared to pay over list price, especially when you’re competing as multiple offers. If there’s more offers, there are the higher the price tends to go. #10 Escalation Clause The tenth way is to submit with an escalation clause. Say the home is $800,000. You come in with an offer at $845,000. Assuming there are other bids on the house, you get countered in a multiple counter situation. You come back with an escalation clause where you say, “I am willing to go to $875,000 but only if you can verify and prove to me that another offer comes in above my 845,000 purchase price.” Let’s say that someone comes in at $860,000, and you have submitted an escalation clause to $875,000 saying you will beat another offer by say, $5,000. And someone offers $860k. You’re saying you’re willing to pay $865,000. So it’s a way to still come in strong, but hedge your bets a little bit. #11 Purchase in As-Is Condition The eleventh way is to purchase in an “as is condition”. Any purchase technically is “as is”, however you always have that home inspection and you can negotiate on the back end. Be prepared in general that you’re not going to get a whole lot in those negotiations. When you’re negotiating for Requests for Repairs through a home inspection in today’s hot seller’s market, you’re not going to get a lot. I’m very good at getting my clients as much as I possibly can. More than what most people will get either through credits or repairs, but just be prepared that sometimes you’re not gonna get it. Sometimes you can just go in and say, “Hey, I’m willing to purchase this as is. I’m still gonna get my home inspection, but I’m guaranteeing you. I’m not going to ask for a dime from you, whatever I find the home inspection.” Now, if you find something that’s really bad, really costly, your recourse is simply to walk away at that point if we can’t work it out. #12 Non-Refundable Earnest Money Deposit (EMD) The twelfth way is to submit with a non-refundable earnest money deposit or EMD. The earnest money deposit is typically 1 – 3% of the purchase price. You put this in up front, and it guarantees the contract. If you cancel without exercising one of your contingencies, your loan contingency, your inspection contingency, or appraisal contingency, you forfeit that money, but you have a lot of ways to get that money back. If you go in with a non-refundable earnest money deposit right out of the gate, this is saying, “I am so confident and sure that I will purchase your home. I am willing to give you this sum of money right up front, no matter what, if I walk away, it’s yours.” Now you could go in and say, “Hey, I want three days.” And then it’s non-refundable it becomes hard. It’s what they call a “hard earnest money deposit”. And so this gives you a little bit of time to kind of have some second thoughts about it once your offer gets accepted, but then it becomes “hard”. you would forfeit the deposit if you walk away from the contract. So what that means if you bought that $800,000 house, 2% of that purchase price is $16,000. And if you say, “Hey, I’m willing to give you a nonrefundable earnest money deposit.” The seller is basically guaranteed. That they’re going to make $16,000, whether or not you purchase that house. If you walk away, they get the money, but it can be a really good way to get your offer accepted. If it’s a really competitive situation. #13 Pay Sellers Closing Costs The thirteenth way is to offer to pay some or all of the seller’s closing costs. This is not necessarily increasing the price of the home, which gets into appraisal issues. Another way is to just say, “Hey, I’m willing to cover a closing cost for you.” That might be covering title, escrow, transfer fees for the seller, real estate commissions, so that the sellers have to come out of pocket for those things and they get more in their pocket. It’s going to cost you money, certainly upfront versus some of these other methods that are just giving reduced timelines and removing contingencies, things like that. It is going to be costing you money, but it can be a way to help put more money in the pocket and increase the likelihood of your offer being accepted. #14 Look for Homes That Didn’t Sell Right Away The fourteenth way is to look for homes that did not sell over the weekend. Even in hot seller’s market sometimes it happens. If there’s something kind of going on with a home, for some reason, buyers just weren’t quite into it, but maybe it’s the right home for you. The best time to look for those deals is on Tuesday and Wednesday on a middle of the week, because that is the no man’s land of selling real estate, and agents and sellers get really nervous from the home doesn’t sell over the first weekend. They’re thinking, what’s going to happen as they head into the next weekend or the next week? So that can be an opportunity for you to jump in and potentially be the only bidder on the home and get your offer accepted for a reasonable price. #15 Bonus: Backup Position Offer And finally, I’ll throw in a bonus the fifteenth way is that if all else fails, make sure to get your offer into a backup position. There’s actually a form for that, where you can be the formal backup position as an offer. So that if that number one buyer backs out, then you’re the first one in line to get your offer accepted with the terms you already negotiated, and you can get rolling on purchasing that home. Those are all the different ways that you can get your offer accepted in today’s market. If I can help you buy a home in a competitive market or help you sell a home as well, please reach out to me via phone, text, or email, and let’s have a conversation. Curtis Chism, Realtor858-281-2568 | Mobilemailto:info@sandiegohomes.ioChism Team | DRE #02105113brokered by eXp Realty | DRE #01878277
Read MoreWhat Happens when an Appraisal Comes in Low
What do you do when an appraisal comes in low? First, let’s talk about “what is an appraisal”? An appraisal is a third party’s opinion of the value of the home. When you are getting a loan on a property, the lender will require that an appraisal is done. An appraiser will come out, they will evaluate the home. They’ll look at comparable sales, make adjustments and say, I think that this home is worth this amount. The lender will only lend based off out of amount. If you have a $1 million home and it appraises for $980,000, that means that the lender will only lend on that $980,000. We have to look at that difference, that $20,000 and find out what our options are. If you went in with an appraisal contingency, this typically only happens in a softer market, more of a buyers market, then you have a lot more options at your disposal. When you have an appraisal contingency, that means that you can back out of the contract using that appraisal contingency without losing your earnest money deposit. This also gives you a lot of leverage to negotiate, because if you’re able to back out of the contract, you can go to the seller and say, “Hey, I want you to reduce the purchase price down to that $980,000 or I’m walking away.” Another option might be in this situation is to split the difference with the seller and you paid $10,000 and the seller pays $10,000. Typically you’re not going to pay that full amount when you have your appraisal contingency, because you have that contingency to back out. So the seller is going to be willing to negotiate with you. Appraisals in a Hot Seller’s Market Now let’s look at a hot sellers market, which is really typical right now, and probably for the foreseeable future. You’re probably going to go into the contract without an appraisal contingency. This means you still have to have an appraisal conducted. That lender definitely is going to require that, but you’re eliminating that contingency. In other words, you’re saying “no matter what happens here, I am not going to back out of the contract using an appraisal contingency”. What this looks like in reality is; you might go in and say, “I am willing to pay any difference in that appraisal gap.” If there’s a $20,000 difference, I’m paying that difference. If it’s a $50,000 difference, I am paying that difference. Or you could go in and say, “I’m willing to cover an appraisal gap of a certain amount so that a gap might be $20,000.” So if it appraises $20,000 low, you are willing to pay that $20,000. If it appraises $50,000 low, you’re only willing to pay an additional $20,000 over that appraised value. If it appraises at $950,000, you’re willing to pay $970,000 in the seller would then drop the sales price to that. Now, if you decided that you don’t want to buy the house anymore, because the appraisal gap was so large and you walk away and you don’t exercise a contingency because you don’t have that appraisal contingency, you’re going to lose your earnest money deposit that you put in. That’s going to be the earnest money deposit is 1% typically the 3% of the purchase price that you put at the beginning of the contract within three business days, and that secures the contract for you. You’re going to lose that money on the $1 Million home. That’s going to be between $10,000 – $30,000. There are some strategies we can employ to protect you, even when you’re going in without an appraisal contingency that we can discuss in person in a strategy session. But that’s an overview of what would happen if an appraisal comes in low. If you’re looking to buy a home and you want the best strategies to get yourself into a home with the fewest offers and the best terms possible, then please reach out to me via phone, text, or email, and let’s have a conversation. And let’s strategize about how we can help you get into your dream home. Curtis Chism, Realtor858-281-2568 | Mobilemailto:info@sandiegohomes.ioChism Team | DRE #02105113brokered by eXp Realty | DRE #01878277
Read MoreWhat’s it Like to Live in University Heights
If you’re looking for Spanish-style and craftsman-style homes look no further than University Heights. I am helping people buy and sell homes here in San Diego. I’m a third generation San Diegan. I know all about all the neighborhoods here in San Diego. If you’re looking for a place to buy, let’s deep dive into all the different neighborhoods and what it’s like to live here in San Diego. Let’s get into everything you need to know about University Heights. University Heights is home to so many Craftsman-style and Spanish-style homes. First let’s talk about where is University Heights located. University Heights is located in Central San Diego, in the neighborhood of the uptown neighborhood. Uptown comprises a number of neighborhoods that includes the University Heights, Normal Heights, Kensington, North park, South Park, Golden Hill, Hillcrest and Mission Hills. And specifically, it’s in the 92116 zip code, which comprises University Heights, Normal Heights and Kensington. It’s bordered by El Cajon Boulevard to the south, Texas Street to the east and the 163 freeway to the west, and then Mission Valley to the North. The homes that border the Mission Valley have incredible views and are a little bit more expensive, but they have awesome views that are definitely worth checking out. El Cajon Boulevard is definitely the main drag through this neighborhood and essentially divides University Heights from North Park. A lot of people really think of University Heights as part of North park, but it actually is its own separate community. A little bit of history here about University Heights is that it was originally named University Heights cause this was the original location for San Diego State University. However, it never actually moved in here, but the name stuck. Then the other main thoroughfare through University Heights is Park Boulevard. It is just a two-lane street, but this is where all the shops and restaurants are located in University Heights. Walkable and Bikeable University Heights is also super walkable and bikeable. It’s very flat for the most part, just a couple of little hills there in University Heights. But if you’re close to the Park Boulevard and where the shops and restaurants are, you can walk there very quickly. My preferred method in University Heights is actually to bike; that gets you around the University Heights, Normal Heights, North Park very, very quickly and much more efficiently. And they’ve actually installed a lot of bike lanes in University Heights. In fact, there’s actually a bike corridor now on Meade Avenue, they’ve installed a series of roundabouts to slow traffic and there’s dedicated bike lanes and the bikes can actually share the entire road on Meade so that gives you that east to west corridor as well to help you get through San Diego in that uptown area much quicker. As I mentioned, University Heights is located right next to North Park, which a few years ago was named a 3rd Most Hipster Town in America. If you’re not super into that, then maybe this isn’t the right town for you. But honestly, it’s really not that hipster as there are some hipster elements to it. I actually used to live right next to University Heights in North Park just a couple blocks away. I’m not that hipster, I’ll be honest, but I absolutely loved living there. And I really enjoyed my time, lived there for about 8 years. Trolley Barn Park University Heights has a really fantastic park right in the heart of it called Trolley Barn Park. There are summer concerts here, so people will come and lay out on their picnic blankets or bring their chairs and listen to some amazing music during our wonderful summer weather. Also a huge grassy fields there and a wonderful playground for the kids. University Heights has so many great restaurants as well. Breweries, Restaurants, Coffee Shops University heights is home to several breweries, and lots of great restaurants, bars and coffee shops. One of my favorite breweries is SD TapRoom. It’s actually located right on El Cajon Blvd. It has amazing American pub food and absolutely incredible craft beer brewed right on site; award-winning craft beer. It’s definitely worth checking out, grab a brewski with your family or your friends and enjoy that great food as well. Most of the restaurants are actually located on Park Boulevard. Like I said, this is the main drag through University Heights. You’re going to have Kairoa Brewing, which has pretty good beer, not quite as good as SD TapRoom, but really good beer. And it has New Zealand-style pub fare as well, which is really great. It has a huge outdoor patio on the top deck, which is definitely worth checking out, some really great views as well. There’s a few other restaurants there. Park & Rec is a really great restaurant; great cocktails. It actually serves food from next door, Madison on Park, but it’s actually a music venue as well. So definitely worth checking that one out. And then also checking out Parkhouse Eatery. It has a huge outdoor patio, fantastic brunch, but they’re also open for breakfast, lunch, and dinner. There’s also a few coffee shops. When I mentioned Kairoa, there’s a coffee shop located right in Kairoa called Yipao. It is owned by a Colombian couple and it specializes in Colombian coffee. I absolutely love this coffee shop, it has fantastic coffee, specialty drinks. And then there’s Lestat’s and Twiggs, which are kind of more your classic coffee shops and go in, sit down, have a pastry and enjoy your cup of coffee there. No music at this Lestat’s, there is a Lestat’s in Normal Heights that is a music venue as well. Types of Homes Let’s talk about the types of homes that you’re going to find here in University Heights. Right now, the median price for the 92116 zip code is $1.4 million. University Heights is going to be a little less expensive than Kensington, which is also in the zip code. They’re going to be on the little bit lower end of that price range compared to Kensington. However, that being said, your 2 bedroom, 1 bath homes, they’re going to be about $900,000 – $1.1 Million. They’re going to be about 750 to 1,000 square feet. Your 3 bedroom, 1 bath or 3 bedroom, 2 baths homes, those are going to be anywhere from about $1.1 – $1.4 Million. And these are going to range from about 900 to 1,400 square feet. Then you get into your 4 bedroom homes and these are going to be about $1.4 – $1.8 Million. And they’ll be around 1,200 up to about 2,000 square feet, potentially a little bit larger, but those are kind of your ranges. Now, as you look at homes that are on the Canyon Rim, looking over that Mission Valley, some of them have ocean views, absolutely incredible views. These are certainly going to bethe higher priced homes in University Heights, pretty much starting around $1.5 million, kind of going up to there into the $2.5 Million range. Now you will find some condos in University Heights as well, certainly be a little bit more affordable. They’re going to range right around the $600 – $700,000 price point. You’re mostly going to be finding 1 bedroom and 2 bedroom condos. So that $600,000 to $700,000 price range is going to pretty much buy you a 2 bedroom, 1 bath or 2 bedroom, 2 bath condo. Most of these condos were built in the 1970s. And the complexes tend to be a little bit on the smaller side, anywhere from 4 units up to about 30 units. Not going to have a whole lot of amenities in these condos, but they’re certainly nice affordable condos you can find right in the heart of the city. No matter what you’re buying in University Heights, whether that’s a single-family home or a condo, you certainly want to make sure that you have off street parking. Parking comes at a premium in University Heights, very hard to find at night when everyone home from work. So you certainly want to make sure that you have off street parking at least 1, but preferably at least 2 off street parking spots, but it makes it a lot easier when you’re coming home from work and want to just drive up to your home and head in instead of having to circle and find parking for awhile. Age of Homes – Get your Inspection Done! Something to keep in mind with these homes, because they’re older, you definitely want to do a home inspection on these types of homes, because there are things that can come up that you want to be aware of and it’s best to know going into it now, when you’re looking to purchase what these things are going to be, so you’re not surprised. So these things are going to be a few different factors. Number one is going to be foundations. Because these homes are about 100 years old, the foundations are old and they’re going to be unreinforced. So what that means is they don’t have rebar running through the concrete. They may not have the post and peers strapped to the house. So you definitely want to have a home inspection done and then possibly a foundation inspection and be prepared to potentially spend some money fixing those foundations. Now, if it’s as simple as strapping, the post and peers, that’s not too bad, a few thousand dollars, you’ll be set. If it’s much more extensive, there’s actually damage that has occurred to the house because of settling. You could be in for $60,000 – $100,000 to do repairs on these homes. So when you’re looking at homes, you want to make sure that either of those repairs have already been done by one of the prior homeowners or that there are no major repairs needed. Or if there are major foundation issues, be prepared to spend that order of magnitude of cost to fix the foundations. The other thing that you’ll run across in these homes is cast iron piping. So these definitely corrode over time because they rust out. You also have old piping in the house as well. So these are a couple of things that hopefully they’ve been replaced by a prior owner, but potentially they have not so you might have to be prepared to come up with significant amount of money to replace these scenes. Sewer lines, these can run anywhere from $8,000 – $12,000 to $20,000 depending on how long the line is and what’s needed to do. You can’t oftentimes realign the sewer line with an Epoxy filler that coats the interior of the pipe and that can be a cheaper option as well. And then these older homes, because they have old pipes sometimes in the house itself, sometimes they need to be replaced. Do you want to replace those either with copper piping or with a pex plastic style piping as well? The other thing is the electrical on these homes. Sometimes these homes have old Knob-and-tube wiring. So if they have that, that’s definitely something you’re going to want to get upgraded soon to the traditional electrical panel with circuit breakers. Also, something to look for on these homes is going to be the roof. Sometimes it’s not readily apparent when you see it, but this will come up in a home inspection. Sometimes the roofs can be rather old as well. They’re not going to be a 100 years old of course, they just want to check the age of the roof and make sure there’s still useful life or potentially you may need to do some repairs on the roof as well. These are just things to look out for. Sometimes these homes have been completely upgraded and they’re ready to go, but other times you’re gonna need some of these repairs done well. That is a complete overview of University Heights. If I can help you buy or sell a home in University Heights or any of the surrounding areas here in San Diego, I would love that opportunity to help you. Please reach out to me via phone, text, or email, and let’s have a conversation about that. I have proven strategies to get your offer accepted as quickly as possible. So we don’t waste a lot of time looking for homes and making offers and not getting into a home. And you miss out on a great opportunity here in San Diego. So reach out, let’s talk and let’s have a conversation about how I can help you find a home. I would love that opportunity. Curtis Chism, Realtor858-281-2568 | Mobilemailto:info@sandiegohomes.ioChism Team | DRE #02105113brokered by eXp Realty | DRE #01878277
Read More
Categories
Recent Posts