Until a couple of years ago, finding a bargain home in the East Bay was easy. Most of the available homes for sale were either bank owned foreclosures or short sales and prices were at rock bottom. The market was flooded with inventory so sellers had to accept what buyers would pay or their homes could sit on the market for months.
How Times Have Changed!
Flash forward to 2016. Listings of distressed properties (the real estate term for foreclosures and short sales) have almost disappeared and home values are back where they were in 2006 / 2007, just before the market went into free fall.
Many homes that get listed for sale have been attracting multiple offers and selling significantly over list price. It really is a great market for sellers. But sellers are often homeowners who want to buy in the same market and a fear of not being able to find a home without overpaying for it is keeping many potential sellers on the fence.
Yet there are still good deals to be found. All homes are not selling in a week or so with multiple offers. Quite a few sell below list price, particularly when they have been on the market for a few weeks. And there are definitely signs that the San Francisco East Bay real estate market is beginning to stabilize in many areas.
So the first step in a savvy home buyer’s search should be to consider homes that have been on the market for a couple of weeks or more. A real estate agent should be able to advise on why this is the case, and the most common reasons are either because they were over-priced to begin with or some improvements are needed (cosmetic or worse). It is very easy for an agent to prepare a market valuation on any home for sale (in fact most good agents will do that as a matter of course) and while you may not want to buy a home that needs structural work, some of the best buys on the market are often homes that just need some cosmetic improvements. Many buyers do not have the imagination to see how inexpensively a home can be brought up to date.
Paint and carpets, re-textured ceilings, dual-pane windows and internal doors are all very affordable improvements that should add more value than they cost. And most agents maintain a database of contractors who can do all of this work at very affordable prices. Even a good quality kitchen remodel can often be done for far less than people realize. Wood cabinets, granite counter tops and appliances can be found at great prices if you know where to go.
There are other ways to find a good deal without the risk of getting into a bidding situation. Consider homes that are “For Sale By Owner” for example. It is a well-known fact that “By Owner” sales go for much less than agent-represented ones. According to the National Association of Realtors’ survey in 2013, such homes sold on average for nearly $50,000 less than agent-represented sales. Agents usually know about “By Owner” sales in the area they cover and in most cases, your agent can still represent you in this kind of transaction with the direct seller paying the buyer agent’s commission.
And although I mentioned that distressed properties have almost disappeared, there are still some out there. And many buyers say they don’t want to have the hassle of waiting for a lender’s approval on a short sale. The reality is that many of the banks now have streamlined systems in place and what used to take months can now take just a matter of weeks for approval.
Another way of getting the home you want, could be a more pro-active approach. If you tell your agent exactly where you want to buy a home, then provided you are prepared to pay true market value, it makes sense for your agent to go out and knock on the doors of homes that could suit you. Many agents have found this to be very effective.
To hear more strategies for getting you into the home you want or if you would like to have an assessment of the current market value of your home, with cost-effective suggestions for increasing it, please call me on (925) 997-1585 or send me an email to firstname.lastname@example.org. There is never any obligation and I am always happy to hear from you.