Recently I had the opportunity to represent a buyer who bid on 26 Birch Ave in Corte Madera. Our offer was one of four offers. Needless to say my clients were not quite ready to spend the kind of money needed to get the home they really loved. And I hate to say it, but it's well documented since January of 2012, the market has shifted to a seller's market.
What exactly is a seller's market? From what I'm seeing with listings in Marin, and with examples like 26 Birch, a seller's marktet occurs when appropriately priced properties receive multiple offers and are usually sold for over the list price. Why are properties receiving multiple offers? This is the law of supply and demand. Too much demand, low supply and cheap interest rates create a seller's market aka multiple offers. And to make matters worse, often these offers are combined with a high offer price, short or no inspection contingencies and in some cases no appraisal contingencies. Although these offers are competitive and attractive to the seller, they come with a fair amount of risk to the buyer.
Understanding the product your buying and being clear on what your priorities are can mitigate this level of risk. However, it usually takes two or three failed offers (and many more months of time) before a buyer is willing to do the upfront work needed to win the bid. My advice to any buyer who looking to purchase a home in Marin's seller's market today is COMPROMISE, and;
1) Make a list of your priorities - what you really want. Would that be neighborhood? A garage? Maybe you can't live without floor to ceiling windows? Perhaps schools are most important. Know that when you start your priority list, those priorities will automatically cause you to start eliminating potential homes and neighborhoods. For instance, if a garage is really important to you, Sausalito and Mill Valley are not a good choice as many of those homes were built before garages were standard.
2) Be clear of what your top 3 priorities are (yes, only 3) because you may not get them all and knowing what you're willing to compromise will hasten your ability to purchase. For instance, if you're moving to Marin for the schools are your priority and you have limited funds (under 800K) then you'll need to compromise on the quality of school. Your choices will be more about which school system can provide you with what you want through grades K-12.
3) Be willing to spend between 25K to 75K over the asking price which will likely force you to look in a lower price range. Looking in a lower price range will solidify what priority is a deal breaker for you.
4) Compromise! It's better to buy a house that is close to what you want than wait for the perfect house, as it will likely be the house you and everybody else are bidding on.
And lastly, 5) Know the product you want to purchase and the process so well that you are willing to investigate up front and take some risks when submitting your offer. For instance, you're clear you want a house in X Marin neighborhood and you know those homes sell on average 50K over asking. Be prepared to do some investigations up front and bid the appropriate amount of money. If you shorten your investigation time frame, close of escrow time frame, or pay all cash, then you're offer has just become competitive.
As always, I hope you find this information useful and I am happy to represent you in the purchase or sale of your Marin County property. I recommend if you are thinking of buying in Marin, give me a call and let's meet to discuss how to get you into the kind of house you want with a strategy designed to eliminate waste of time.
Annalise Demuth, Realtor