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Finding the right home in El Dorado County isn’t getting easier as the number of available homes for sale continues to decline. As an example, if you were in the market to buy a three-bedroom, two-bath home priced less than $350,000, there are only 245 in the whole county to choose from. A year ago there was about three times that number. Let’s say that you only want to consider REOs or short sales. Well, there are 50 REOs and the number of short sale listings in that price range is less than 40.
Buyers often breathe a sigh of relief after finding that one perfect home, mistakenly believing that the most difficult step in the homebuyer process has finally been completed. It hasn’t. As difficult as finding the right home has become, getting an offer accepted once that home is identified is often the most difficult part of buying a home.
Most homebuyers don’t wake up one morning deciding to buy a home. It’s a process that can take months. Typically, homebuyers have been thinking about buying a home for months and have taken appropriate steps moving in that direction. They have likely discussed buying a home with family and friends. Perhaps they have been saving over several months for their down payment. They have collected and furnished all their financial information to their lender and have been pre-approved for a mortgage. They have selected an agent and start anxiously previewing available listings, first on the Internet and then personally visiting properties.
While previewing, they discover homes are selling quickly at or above the listed price. They begin to get discouraged, thinking they may have to pay more for a home than they had planned or settle for less. Each day they diligently check the new listings.
Finally, a home pops up that appears to be a perfect match. They drive-by the home first. It appears to be everything they wanted. They excitedly call their agent. The home’s interior is perfect. Finally, after months of preparation and searching they have found their home. They hurriedly sign a full-price offer. They believe the process is finally over. At last they can relax and let their agent and their mortgage lender take care of the remaining details.
“When can you present our offer?” she asked.
Converting a buyer’s offer into an accepted purchase contract these days is like hitting a moving target. Often, just submitting the offer to the listing agent is like running an obstacle course. By the time an agent and clients preview the property it could easily have two or three offers already. If it doesn’t, you can bet it will have by the time the offer reaches the decision maker.
Converting a buyer’s offer to a signed contract was much easier last year. I would have simply e-mailed the offer to the listing agent along with a “pre-approval” lender letter. If the home was owned by an equity seller, I would likely have an answer by the next day. If this was a bank owned REO, it may take two or three days for an acceptance. Things have changed a bit.
The listing agent and the seller dictate the course an offer must take before it reaches a decision maker. Their required procedure is usually found in the agent’s confidential remarks in the listing. Here are the most common requests.
“Buyer must be approved by seller’s approved lender.”
Regardless of which lender has already pre-approved the buyers for a mortgage, if the buyer wants their offer to be considered, they will need to have another approval from the seller’s approved lender. This redundancy can cost valuable time.
“Buyer must have POF.”
It is no longer good enough for the borrower’s lender to verify that the buyer has the necessary down payment in the bank. Now, they must submit satisfactory “Proof of Funds” to the listing agent and seller. Submitting a copy of the buyer’s bank statement may be unsettling but is becoming a more frequent requirement.
“All offers must be submitted online to www.lostincyberspace.com.”
Back in the Stone Age, a buyer’s offer was actually presented in person to the seller jointly by the listing and selling agent. Then the fax machine allowed offers to be transmitted to the listing agent without driving across town to their office. Up until this year, most offers were scanned and e-mailed. Now agents must go to a variety of Internet proprietary platforms, complete a registration and follow instructions on submitting the buyer’s offer.
“Include buyer’s information and signed disclosures and addendums with offer.”
An old real estate adage in a fast-paced seller’s market was to get the property under contract first. Afterward, there was always time to review property disclosures and conduct inspections. That’s changing. Now, some sellers want their property disclosures signed by the buyer up front before they consider the buyer’s offer.
“Buyer must complete buyer’s questionnaire.”
Traditionally, a buyer’s personal and often confidential information has been guarded by their agent. Today, buyers are strip searched of information before their offer is considered. Modesty is not a virtue. If a buyer wants their offer accepted, they must reveal more information about themselves than has ever been required before or pass on previewing a significant number of homes.
Ken Calhoon is a real estate broker in El Dorado County. He can be reached through his Website at kencalhoon.com.