As a Mid Silicon Valley home seller, the first thing you want to know about an offer is: How much is it?!? Right? Me too!
Enjoy the moment. Then let it go and let’s get down to business.
1. Buyers are stretching beyond their comfort zone.
What comfort zone? The median home price right now is over $1.4 million for Mid Silicon Valley homes. Who is comfortable plunking down that kind of money for a house? Let me tell you, Mid Silicon Valley home buyers are not – until the shock and disbelief wears off and reality sinks in.
Their realtor tells them they can do it; the bank tells them they can do it; but do they believe they can do it? You want to know that before you get too far into the process with a home buyer. Knowing if they have owned a home before will tell you if they’ve been down this road. Been there, done that is a more comfortable place than “OMG. Can I really do this? I’ve never done it before.”
Also, have they written any offers prior to the one on your home? Cold feet will knock your hot sale into the abyss. If a buyer is new to the process, they’re more likely to have sleepless nights which could make them wonder all the things buyers wonder: Like, can I afford this? Is this the right house? Is this the right time? Should I keep looking? Am I doing the right thing? Do I really want a house? If they’ve been around the market for a while and they’ve written a few offers, you’re more likely to have a stable buyer.
2. Buyers stretching beyond their financing capabilities.
So the Mid Silicon Valley home buyer has a pre-approval letter, that’s great. But it’s not as good as being underwritten. How much does the bank really know about this potential homeowner? How much documentation have they reviewed? You want the bank to feel just as solid about the offer as possible. The buyer can promise the world, it’s the bank that’s picking up the check. Your realtor needs to make sure the lender is on board with this client and this purchase.
A lot of buyers are stretching right now. Look carefully at their down payment. The more down payment, the more secure the bank will be in lending them the money. Their interest rate will be lower too. That’s good for you because that’s less stress when the buyer thinks about that new house payment they’ll be making.
3. The buyer writes an offer so high that the house will not appraise for the price offered.
Mid Silicon Valley home sellers regularly see low appraisals in a rising market. That’s okay if the buyer has the money to make up the difference.
If the house sells for $2 million but it appraises for $1.8 million, the buyer has to have that $200,000 in cash to make up the difference between the money the bank will loan them and the sale price. If they don’t have the money, you’re screwed.
Most agents will know approximately what the house will appraise for and will voice concern to you when they review the offer with you. The next step is to see if the proof of funds the buyer provided is enough for that difference. If the buyer doesn’t have the cash to make up the difference, don’t even think about it – even though it’s the highest. It sounded good for a second, right? But if they can’t close the transaction, there’s no point in getting started.
4. Is the buyer real?
I always have several conversations with that buyer agent before they submit their client’s offer. I’m listening to how much the buyer loves your house, how long they’ve been looking, how many offers they’ve written, blah, blah, blah. In those conversations, I’m also listening for how realistic the buyer is. Let me tell you, agents spill it when they’re frustrated with a client who won’t listen to them and may embarrass them with an unreasonable offer. I can learn who else is involved in the purchase. Will the parents have to approve the sale? That brings a whole new complication to the process. Now we have two more people to please – at least two more. Hold your breath if the family is from out of the area. When they see the price the kiddies want to pay they’ll put the brakes on this purchase.
5. The buyer is getting a loan where you’re required to do a lot of repairs.
Some loans require the property to be in a specified condition. VA loans are great for the veterans; the problem comes in when you find out you have to do all the pest inspection Section 1 work. Section 1 pest work is anything that is a problem now: dry rot, leaking, pest infestation.
So if your house needs to be tented to mitigate a termite infestation, you’re going to have to not only pay for it but have the work done before the house transfers to the new owner. With a non-VA loan you wouldn’t have to do that. And vets get the shaft again.
Today’s Real Estate article “Should you always accept the highest offer when selling your Mid Silicon Valley home? 5 reasons why the highest offer isn’t always the best.” was written by Vicki Moore, Today Sotheby’s International Realty.
You’ll find Vicki selling homes in Mid Silicon Valley, San Mateo County, in the cities of Foster City Homes and Condos For Sale, Pacifica Homes and Condos for Sale, Redwood City Homes and Condos For Sale, Redwood Shores Homes and Condos For Sale, San Carlos Homes and Condos For Sale, San Mateo Homes and Condos For Sale.
Call Vicki at 650-888-9268 or email [email protected] if you have questions about boosting your home’s value.
Vicki Moore, a licensed California Real Estate Agent, CA BRE 01234539, serving Mid Silicon Valley | San Mateo County since 1998. Today Sotheby’s International Realty, San Carlos, CA.
You can speak with Vicki by calling/texting her at 650-888-9268 or you can email her at: [email protected] if you need to sell your Mid Silicon Valley home.