In 2022 San Diego County ranks as one of the most competitive housing markets throughout the Country. The Month’s Supply of Inventory across all home prices has not exceeded 3 month’s supply in the last 3 years, and homes sell on average with a sale price for no less than 99% of the listed price in the last 3 years. Translation: If you’re writing an Offer on a home in San Diego there is a good chance you will be competing with multiple buyers for that home. Here are 9 easy tips to help get your offer accepted here in San Diego in 2022!
Start with a Pre-approval not a Pre-qualification
That’s right if you’re serious about buying a home you should consult a lender that you trust before talking to a Realtor and shopping for homes on Zillow or other popular home search engines.
You will also want to start with a Pre-approval which reviews and verifies your credit history, employment, bank statements, and tax filings as required. The Pre-qualification simply estimates a loan amount without verifying any of the data entered. Often the Pre-approval amount will be significantly different than a Pre-qualification.
By starting with your Pre-approval, you will save yourself potential disappointment of falling in love with a home that is out of your price range.
Most importantly if you have, you’re Pre-approval Letter and are competing with buyers without one this will help move your offer ahead of the others.
Showing is Better Than Telling
Ronald Reagan once said. “Trust but verify” Attach a Proof of Funds (Current Bank Statements) with your offer. Let’s face it buying a home is expensive and the sellers know this. If you can show the sellers that you have the resources available to cover the expenses incurred during your home purchase this can help move your offer up the stack as well.
Consider Increasing Your Earnest Money Deposit
Sellers know that buyers have many Contingencies in the contract that allow them to back out of the deal after they accept the buyer’s offer and escrow opens. Increasing your Earnest Money Deposit shows the buyers you are more committed to purchasing the home and will be less likely to back out of the deal.
Offer a Seller Rent Back
In a multiple offer situation offering the sellers a few extra days after closing before they are required to complete their move out and turn over possession can help move your offer to the top of the stack. This strategy comes with some risk, however, and many brokerages may advise against it. If a rent back is offered be certain to complete a post occupancy agreement in writing that addresses insurance issues and a possible security deposit.
Shorten Some Contingency Periods
The Residential Purchase Agreement commonly used in San Diego gives the buyer a 17-day period to complete all the inspections, and investigations, as well as their home appraisal, and a 21-day period for the buyer’s lender to guarantee their home loan. Consider shortening these buyer contingency periods to 10 and 17 days respectively. This lets the sellers know you are serious about closing the sale and willing to do so as quickly as possible. Keep in mind you will need to be very proactive in scheduling all of your inspections and reviewing the seller’s disclosures to ensure you have a clear picture of any potential defects in the home and surrounding area, and you’re comfortable moving forward with the sale before these buyers contingencies expire.
Write a Clean Offer
Don’t ask for the sellers’ personal items and don’t ask the seller to pay your closing cost. Writing an offer that does not ask for special concessions from the seller, or lengthy escrow periods can help move your offer to the top of the stack.
Sell Your Current Home First
Whether you are upgrading your home, downsizing, or simply relocating, sell your current home before writing offers on the home you would like to buy. This does come with some logistical challenges, however fully furnished vacation and short-term rentals makes this option a much more viable solution then in years past.
Sellers and listing agents will always prefer an offer without a “Home Sale” clause, so the short-term inconvenience of selling your home prior to your next purchase will give you a leg up over buyers who don’t.
Write Your Best Offer First
Nobody wants to overpay for home! However, don’t expect to negotiate in a sellers’ market, especially if you’re in a multiple offer situation. Make your first offer, your best offer. Sometimes you can avoid a bidding war and get your offer accepted right away by simply writing a clean offer that slightly exceeds the seller’s expectation on price.
Always ask your agent for a comparative market analysis to ensure your offer is in line with current market value. Sometimes sellers deliberately offer a list price below comparable home sales in order to generate multiple offers. Paying a little over asking price doesn’t necessarily mean you’re paying over market value.
Connect with the Sellers
Many sellers have an emotional attachment to their homes. It may be where they grew up, or where they raised their children. Seller’s often want to know their home will be cared for by the new owners in the same manner as when they owned the home. Consider writing a letter observing the attention to detail and care the sellers have shown the home. Tell the sellers a little about yourself and your home search, and how you will give their home the same care and respect when it is yours.
Depending on your market it may take several attempts before your offer is accepted. Don’t be discouraged. The best cure for a home you love, is another home you love. If you’re offer isn’t accepted politely ask for feedback as to why and use that information when crafting your next offer. Quite often not getting the first home you want leads to a much nicer home down the road. Best of luck with your home search.