We got a lot of positive feedback from Part 1 of this series. Many people found the tools helpful in getting offers accepted on Long Beach homes for sale and it seems to only be getting tougher! Here we will go over the next step.
OK, our expectations are set. This is crucial in any market, let alone one that is as competitive as our local Long Beach market. Now lets talk about selecting properties and prior to showing procedures.
When selecting properties to show, here are a few tips.
- Consider looking at older listings! You might be thinking, “Why would I want to see stale listings that have been sitting?”. Well the reason is that there is far less competition on those properties. Why are these Long Beach homes still on the market? As in all real estate it all come down the price. No matter how bad the home or how many negative factors it may have, there is a price it will sell for. There are also many beautiful homes that are just over priced and not generating any activity. Now there is a strategy for getting an offer accepted for a lower price and it involves getting the listing agent/seller on your side. When you find a qualifying property, have your agent do the market research and then open discussions with the seller. Have your agent ask how they arrived at the list price. We usually get two responses from this question. They may give you some comparable sales to support the value, in which case you can review the data and use your own comparables to justify your value. More commonly we hear, “Well, that is just what the seller wants. I keep telling them we have to reduce the price!”. If this is their response, you got em! Most listing agents will take any help they can get to sell al listing that has been sitting. Work together to come up with a game plan to present to the seller. If you can, have your agent present the offer to the seller in person, although this is very rare in todays Long Beach real estate market.
- Do not look at homes more than 90% of your pre-approval amount. This tip will help immensely as it solves a few problems. One is leaving room for negotiating. Two is that when you see a great home that just came on the market for your max qualification amount and it gets overbid, you take on a new perception. Let’s say you see a home for $450,000 which is your max. It gets overbid to $500,000. What do you think now? You think that home is what you should be able to buy for $450,000! The truth is that home is worth $500,000. Now when you look at homes for $400,00 you are stuck on the nicer properties out of your range. This leads into my next tip
- Should you be seeing the nicest, newest listings as they come on the market? My perception is that it depends on finances. How many of you have gotten beat out of an offer by cash or a large down payment? I have seen many cases where even though an agent overbids with their FHA client, the listing agent still chooses the conventional 20% down offer. There is an apparent hierarchy of offer strength in the Long Beach real estate market. VA/ Down payment assistance programs are at the bottom, FHA is next followed by conventional in order of the size of their down payment and top dog is always cash. So why should you consider not viewing the gorgeous remodeled listing the day it comes out if your purchasing power is not very strong?. It follows the thinking outlined in tip 2. When you get beat out or overbid you take on a perception that the beautiful new listing is the type of property you will end up with when in reality that type of home may be unattainable or our of your price range. Now of course this is a case by case basis and the main point is that you need to manage your expectations. If you don’t you are putting yourself in a tough position.
- Make sure your agent calls for availability. This should be standard operating procedure but there are certainly a few tips to gleaned here. I have actually received offers on listings where the agent does’t even call let alone follow these pointers. I call more than once to confirm availability, especially if I am not showing for a couple of days. As an agent we can use this time to build rapport with the listing agent. The longer an agent is in the business and the more transactions they do the easier it gets to get an offer accepted when it is someone you have worked with in the past or who you have some sort of relationship with. They know from past experience that I will get the job done! When your agent calls, they should ask the following: Do you have offers? Are they strong? (most listing agents I have worked with will not tell you the price, Even though the listing agreement says they can! I will save that for another blog post) Are we looking at an overbid situation? (If the agent won’t tell you the price, the last 2 questions can get you close enough to make a strong offer), What can we do to make our offer stronger?, Why/when/where is the seller moving?, FHA approved condo?, 90 day flip rule? These questions should help you structure your offer for acceptance.
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