First Time Through A Seller’s Market For Many
Many first time buyers in San Carlos have never experienced a seller’s market. For those just trying to break into the market over the past few years, the market has been anything but intimidating. 2012 has ushered in a change in our real estate market. While many of us thought the market would transition back to a seller’s market in 2012, no one predicted just how abruptly the market would be jolted in favor of sellers. For many active buyers in San Carlos, this sudden change has left them a little dazed. For many, the dazed feeling has given way to one of intimidation…and here’s why:
(1) Open Houses
Most new listings in San Carlos that surface with a list price under one million dollars can expect anywhere from 150-250 people at the first open house, depending on the location. This means that for most buyers viewing the open house, they are doing so with several other groups at the same time. If the house is something that buyers want to pursue, sizing up the competition at open houses can be a bit unnerving for many buyers.
(2) Previous Loss in a Multiple Offer Situation
With the amount of multiple offer situations that have happened in San Carlos over the last few months, many buyers have found themselves on the losing end in at least one multiple offer situation. Perhaps they have been beat by a price that was completely unexpected, or by a buyer who had all cash. These types of losses can make many buyers re-think their viability to compete at the target price point.
(3) Loss of Market Opportunities
With the amount of properties moving off-market in San Carlos right now, some buyers are left wondering how some have been able to obtain a property not on the MLS, while they are left to hit the “refresh” button on the San Carlos MLS page numerous times each hour. Some buyers are frustrated, feeling that they are not being totally exposed to everything that is truly available in San Carlos
The situation above matches the feelings of many, if not the overwhelming majority of buyers in San Carlos right now. My advice for buyers in this situation is the exact same advice I have given my own buyers:
First, deep breath. San Carlos isn’t going anywhere. You are not going to be priced out forever. I realize that some of this may sound a bit blunt, but I have to call it as I see it, so here goes:
With regard to the masses at open houses, understand that at least 50% of the buyers you see at our open houses will have absolutely no chance at all at landing the house in a multiple offer situation. This will happen, not because they do not have the resources, but simply because they are unfamiliar with just how strong the San Carlos market really is right now. They will not understand working on short time lines or how to go about making an offer in a fast moving, competitive situation. Of the remaining 50%, at least half, should they choose to move forward with an offer, will have at least one unattractive term in their offer that will most likely be an immediate dismissal for the seller. This term can be related to strange financing, odd credits in the offer, a contingency sale or a host of other strange terms. That leaves you really competing against 25% of the people you see at open houses, and even that number is assuming that everyone will make an offer. Want to improve your odds even further, match yourself with an agent who is extremely experienced with multiple offer situations. The agent does make a difference under these circumstances. There are certain agents that I look for in multiple offer situations with my properties because I know they will present the offer well, their clients will be informed and they are prepared. As a listing agent, your odds of closing the transaction for your clients goes up exponentially if the buyer’s agent is on their game.
Previous Loss in a Multiple Offer Situation.
Odds are that you will lose a least one multiple offer situation. Not a big deal at all. Maybe you were comfortable in your price point and someone else just paid more….let them have it. It can certainly be discouraging, but understand that there are many factors in play with determining who wins a multiple offer situation and you can’t control all of them, including who your competition. I have certainly lost my share. My experience has been that with most buyers who lose out on a multiple offer situation, they later find a house and are thankful the previous home did not work out. It’s tough, but keep pressing forward.
Loss of Market Opportunities
This is a major source of frustration for many. This is also going to sound a little self-serving, but the reality of the situation is that the following is absolutely true: In a market where the inventory is so low and the market is transitioning so quickly, it is to every buyer’s advantage to survey every possible available property. This being said, it is unlikely that discovering additional properties that are not necessarily being advertised to the public are going to come from an agent outside of San Carlos. San Carlos is a small town. San Carlos agents tend to know what is coming up on the MLS and which properties are available for an off-market purchase. As I have said before, this is not a knock against agents outside of San Carlos at all, but there is something to be said for agents that deal almost exclusively in San Carlos and live and breath San Carlos real estate on a daily basis. Most San Carlos agents can offer their clients more opportunities than agents who are outside of their home city of concentration.