Sacramento Real Estate Blog

Welcome to the conclusion of this three part series on getting your offer accepted! The basics we have covered so far if you are a home buyer making an offer on a bank-owned property are to come across as a “normal” buyer, increase your good faith deposit, let the seller decide which title company to use, increase your down payment, get preapproved with a direct lender, offer over asking price, shorten timelines, clear contingencies as soon as is reasonably possible and not to ask for repairs. These are the specifics. There are other general conditions that help get your offer accepted and I will be going over them today.

Don’t get Greedy

The real estate market can be a lot like the stock market at times in that it is constantly driven by greed and / or fear. If you base your decision not on those two feelings but instead concentrate on inherent value and your own pocketbook, you will do just fine in your purchase. What do I mean by that? Greed runs buyers in a buyer’s market just as it did sellers a few years ago at the top of the real estate market. Fear also runs rampant in buyer’s markets as well as seller’s markets, except it’s quashed pretty easily. Don’t be one guided by panic or folly. (I know, I know - easier said than done.)

But more specifically, don’t offer an amount ridiculously low with the wildly optimistic hope that the bank will take it, because, hey, they have to get rid of the house anyway! Also, many home buyers like to get closing costs rolled into the loan so they don’t have to pay them out of pocket. In this case, don’t guess at the amount and ask for a ton of money back to close. If the cash back to close is not supported by the appraisal and the final HUD-1, both lenders (seller and your own lender) will be unwilling to give it to you. So, at all times, keep your cool.

Respond Quickly

Here’s a time when it pays to be opportunistic. If you find the right home and you think the price works for you, make an offer. When you hear back and the counter seems fine, sign it and send it over. It might be a good idea to sleep on it for a while, but if you take too long to decide, the house might very well belong to someone else by the time you get back to the bank. I know what you’re thinking: isn’t this a buyer’s market? Absolutely. But that’s why you’re seeing homes selling for so little! And even if you don’t see the value in some of these houses, I can guarantee that other home buyers are. Sales have been up for a while now - a sure sign that demand is beginning to catch up with supply. Wait too long, let fear overcome you and your window of opportunity might be lost. So make up your mind before you make the offer; think hard and long before, but when it’s time to act, well… act!

Be Prepared!

Of course, to be able to perform, you must be well-prepared. And preparation is more than saying, “I’m going to buy a house this year,” or listening to a relative talk about his real estate fortunes made when he bought homes in the 70s. While both these can be great incentives to your buying a home, you should have at the very least (1) done the math to know if you can buy a home and how much it’s going to cost you every month and (2) figured out a way to get the money to buy a house - whether it is begging, borrowing or stealing. Just kidding. Keep the stealing out of it.

I feel the need to reiterate this because I once met a client ready and willing to buy a house - she even wrote an offer on it and then realized she had jumped the gun. Why? The money she was going to use to buy the second home had to come from a refinance of the first one. She had waited to refinance because she was afraid to keep money lying around, lest she get tempted to go shopping with it. Do you know the conclusion to the story? Everything fell apart - the entire plan. Waiting to refinance the first home had been the mistake. Prices had fallen further and her first home now didn’t appraise for the amount she needed out of it. So, to use a cliche, get your ducks in a row before you sign the contract!

Get Good People on your Side

This should go without saying, but I feel the need to spell it out because, I’ll admit it, there are too many people out there who think they can make a good deal with a bad person. If you are not comfortable with your real estate agent or lender and you get a sense of not being able to fully trust that they have your interests at heart or that they are otherwise - well, shady - find honest ones. There are plenty of honest, hardworking Realtors® out there (ahem, notice the toll free number at the top right corner? There’s a hint!) with their circle of hand-picked good lenders they can refer you to. There’s no reason to stay in an untrustworthy relationship. Also, ensure that besides being nice and honest, the professionals working for you are also competent. No sense in having an honest lender who can’t perform at a critical time!

I hope this series has been helpful to the home buyers out there. Feel free to send it your questions through our contact form and if it’s something we have not addressed, I’ll be glad to answer on this blog!