The current market is bottoming out and real estate performance continues to be highly localized by zip code and neighborhoods. To say the entire market is good or bad is like saying the average temperature in the United States is 79 degrees, when obviously that is not accurate. Here in San Diego we have seen tremendous activity and interest in the lower price ranges. Over the past two weeks I have written offers for clients on properties that had received 20, 13, 11, and 8 offers in the first week on the market. In the past, properties were usually listed slightly above the target price and sellers would come down until a sale was made. But that has given way to a newer strategy. Now, these properties are now being priced with "energy pricing" which means they are probably listed about 10% under the target sales price in the hopes of generating aggressive activity, and it's working! Homes in the lower price ranges, especially in the equity or bank owned sales, are showing market times of a week or so, while the short sales and anything that is not energy priced is staying on the market longer. I am now recommending to my clients that we set their search maximum price about 10% below their target to allow for the over-bidding that will probably occur. Activity in the upper end, especially in any home that requires jumbo financing, is slower.
Buyers: Don’t be surprised by a hierarchy on loans while sellers compare your offer to others. Obviously cash is king, but be prepared to put as much money down as possible, as sellers right now are favoring conventional loans with high down payments over FHA & VA funding. Also, be prepared to lose the right to maintain an appraisal contingency on any bank-owned (REO) home. Sellers are requesting that buyers pay the difference between the appraised value and the purchase price. You can view all homes for sale, including foreclosures, online at www.SanDiegobythesea.com.
Sellers: “Energy” pricing your property will produce the most showings and offers. Not all buyers can make all-cash offers, so it’s very important to understand and scrutinize the type of loan the buyer plans to use as well as their initial deposit amount. Now, more then ever, it’s important to employ a professional real estate agent to negotiate your most favorable terms as you head into escrow. This way, you can verify that the buyer’s funds and loan type are legitimate. A prudent and thoughtful marketing strategy is always crucial to make your property standout from the rest. Remember, homes do not sell by happenstance. Visit www.SanDiegobythesea.com to see how we would sell your property.
