Shopping for a home in this fierce and competitive market? Bay Area wide we are seeing unprecedented trends, multiple offers generating a frenzy of bidding wars, and buyers waiving contingencies in effort to win over the seller. Especially in times like this it is important to remember that a Napa Valley real estate purchase is an investment. Whether you are shopping for your “forever home,” relocating to a new area, or purchasing a second home in a location you have always dreamed of, it is critical to make sound decisions and not get caught up in the haste of the market.
In a competitive situation, you may ask yourself or your Realtor®, “What do I need to do to make this my home?” Under the current market conditions, decisions are often made quickly so you will want to make sure you are prepared to act promptly, be well prepared and organized to position yourself as the buyer.
Start by making certain the property fits within your price range. The last thing you want is to have an offer accepted and find out it is beyond your budget. Know what your “must have” criteria is and perhaps more importantly, what your “deal breakers” are. It is also essential to have your financing options in place before you go home shopping. Your mortgage professional will be able to work with you to determine what loan programs are available to you. If you will be paying cash make sure to find out the timeline and process in which funds will be made available to you.
When the time comes to make an offer, you will want to make sure your offer stands out. So, what makes an offer enticing?
Price is a big factor. You want to go in at a price that is attractive to the seller, without overpaying. Your offer price will need to be aggressive if you are competing with more than one offer. Find out what similar homes in the area recently sold for — what Napa Valley real estate agents call “comparable” — and use those as a guide.
What is the seller looking for? That depends on their situation, under conventional circumstances the ideal offer will feature:
- Few contingencies and/or tighter contingency time frames.
- A closing date AND possession date that is convenient for the seller.
- A deposit amount that shows you are a serious buyer.
- Acceptance of any of the seller’s “personal property exclusions”. (For example, they want to take the fridge and stove with them.)
- Evidence you can get financing, your lender will provide you with a pre-approval letter.
Although an offer with few conditions is attractive to the seller, you will want to make sure that you as the buyer have exercised your due diligence in advance, this can include the review of any disclosure documents and/or property inspections that have been obtained. Additional contingencies may include a loan contingency, an appraisal contingency and ability to obtain insurance (especially important for those properties designated in high fire zones). Offers are also sometimes made subject to the sale of a home if a buyer needs to sell something to proceed with their next purchase.
There is no perfect solution to an offer structure and no one transaction is alike. It is always important to seek the advice of a trusted Napa Valley real estate professional in your area. If you want to increase the likelihood that you will find — and, more importantly, get — your next dream home, call us today.