Q: Right now we are in bay area and planning to move to elk grove area in 3 months. We are looking for Single Floor ~2300 Sq feet in Gated Community. This home you have listed seems to fit for us. Ideally, we are looking for $275K house, If we really like it can you give us an idea how much we could bargain. We have the preapproved letter for 285K. We are working with an agent who is planning to show us few houses in Elk Grove area. We will most likely come in couple of weeks. Do you know if you are going to show this place till then?
A: Hello, this home is a 4 bedroom 2 bath. The market price in the area for those parameters at 2300+ sq ft begins at $290-295K in the gated communities, and I’ve also seen a few outside the gated communities that are still selling at that price.
Has your agent shown you comps so that you know what type of home you can get for your loan amount? Unfortunately $285K will not be enough for this area, prices are actually going up in certain pockets within this area and there is alot of competition out there for these homes. This home will likely sell for a little over $300K.
I just sold another home in the area for $285K and we had five offers on the home and continued getting calls and info requests on the home throughout the entire transaction.
At your current price range you should probably be looking at homes no more than $280K so that you have negotiation room. Unfortunately and contrary to what you might be hearing, this is not a “bargain” market. The banks are in no hurry to let the inventory go for less than fair market value because they have already lost so much in the decline. The banks take great care in using various methods (quarterly appraisals/BPOs) to ensure they are getting the most for the homes that they sell whether in short sales or as foreclosures.
This is not a buyers market, it’s a bank’s market. The banks call the shots. If it is a short sale, the bank determines the price and the terms of the sale, and will change the terms of the sale if they desire, and not negotiate those terms, if they desire. If it is an REO sale, same deal. Then there is the buyer’s lender. You may qualify for the loan, but once that loan starts processing, they will ask you for things you nver even knew you had. Tightening of rules and regulations are the cause of the extra hoops and last minute funding conditions causing buyer’s last minute headaches.
On average, it is taking a buyer 6 months to get into a home. Partly because many buyers come into the process uninformed and blame the lack of getting an accepted offer on their agent when the truth is the buyer had unrealistic expectations. Sadly, as a result, it isn’t until months later (and 2 to 3 agents later) that the buyer finally learns the market and conforms, and regroups, comes with a new strategy, and gets an accepted offer.
This is a tough market and it will take some time and some rejection. So listen to your agent, make sure that he/she is well experienced in this market and in the area in which you plan to purchase, and you will do well. Don’t look for a bargain, look for a home you can afford and enjoy for years to come.