Well appointed, newer home has a spacious kitchen with cherrywood cabinets, island with pendant lighting, and granite countertops. Large family room with fireplace and separate living/dining room. Bonus room could be converted to 4th bedroom. Nicely landscaped yard, covered patio and built-in grill. Broker’s Tour on Thursday, June 6th from 10:00 to 1:00. Open house Saturday and Sunday, 1-4.
In short, they are time specific clauses in a real estate contract. Their purpose is to hold the buyer or seller accountable to perform certain duties within a given timeframe. Not all contingencies will be in play, and the time periods may differ depending upon how the contract terms are written, but for a California purchase contract in general they are:
Seller has 7 days to provide to buyer documentation with known material facts about the property. This consists of several contractually required forms, but can also include seller ordered inspection reports and county or city reports. Buyers are eager to learn this information as soon as possible, and look favorably on sellers who have it readily available.
All inspections and existing reports must be completed and acknowledged by buyer by the 17th day. Many buyers will shorten this contingency time, getting their inspections immediately. This helps the seller know sooner rather than later whether the buyer will move forward with the transaction.
HOA or PUD (Planned Unit Development)
Seller has 7 days in which to disclose if the property has this designation. If it does, a package containing association documents, meeting minutes, financials, bi-laws and rules and regulations will be provided to the buyer.
PreLiminary Title Report
Usually provided by the title company, this confirms to the buyer that the seller has the legal right to transfer the property, free from liens. It will verify the property address, any easements and show the seller of record on the report.
If the buyer is obtaining a loan, they have a total of 17 days in which to confirm final loan approval. If a buyer is purchasing all cash, this would not be a required contingency. Shortening this contingency should be done only with the knowledge and commitment of the lender.
Required by the lender provide the buyer’s financing, it too has a contingency period of 17 days and is typically tied to the loan approval. In a highly competitive market, it’s not unusual to see buyers remove the appraisal contingency understanding that appraisals may not be keeping pace with pending sales and market activity. These buyers in essence, take a risk that by the time the property is appraised, newer comps will support the sales price. Or, in cases where it does not, they make up the difference in cash.
Sale of Property – this is only applicable if the buyer must close on the sale of a primary residence to fund the purchase of the home they are buying. Contingencies on a home sale first, are more common during a market that is balanced, or that favors buyers, not sellers.
In the fast-moving, multiple offer market we are in now, contingencies are often shortened, or sometimes removed all together to make offers more appealing to the sellers. All parties should have a keen understanding of how contingencies affect the transaction and be well advised to potential risks.
First time ever on the market, this Bay O Vista beauty has had just one owner. With a prime location, this one story home sits on the corner lot on a court, with magnificent views of the East Bay and San Francisco. Views from the two back bedrooms and family room, the semi-enclosed deck allows you to enjoy the vistas any time of year.
Master bath has newer tile shower, new cabinet and granite countertop. Kitchen has light cherry cabinets, white tile counters and ample cupboard space. Original hardwood flooring. All windows are dual paned. Professional landscaped and maintained the house has great curb appeal.
Open for Broker’s Tour 10-1 on February 6th. Sunday Open House, February 10th from 1-4 p.m. Check out the virtual tour for 2601 Vista Grand Ct, San Leandro.
Offer deadline dates. Busy schedules aside, buyers and their agents may need to react quickly to see a property right when it comes on the market in order to do their due diligence and prepare an offer. Especially when there are very specific offer due dates.
Financing in Order. Other buyers will be very prepared, especially if they have been in the marketing and competing for awhile. If your pre-approval isn’t up-to-date, and you don’t have proof of funds for down payment and closing that will make your offer less strong than others.
Contingency Removal. Contingencies are in place for the buyer’s protection. But it’s a fact of life right now. Some buyers are removing one or more contingencies in order to win over other offers. In a fast-moving market, one of the hurdles to overcome is the property appraisal. Those sold properties (comparable sales, often lag behind what’s happening in the trenches. Some buyers have the ability to pay any difference in appraisal price and the price offered, so they remove this contingency.
All Cash Offers. There are a lot of all cash buyers out there. Some are investors, but others are recent sellers who now have money in hand for their next purchase. These buyers are realizing that the all-cash offer is attractive, but in a multiple offer market, price still matters to the seller.
It Takes Stamina. Sellers are overwhelmed by the amount of attention and traffic their homes attract. They schedule specific showing days and times, to minimize the disruption to their household. Buyer’s have to be ready to roll once a new listing hits the market, and their agents along with them. And when the stars don’t align for the buyer, property and agent, everyone must roll up their sleeves and begin again.
Like anything, those with a can-do attitude, perseverance and realistic expectations will prevail.
I get questions frequently from first time investors that are interested in purchasing REO’s (foreclosed properties) in Livermore or surrounding cities. The general perception is that they will be the best deal. That may or may not be true. Certain factors need to be considered when making this type of purchase.
Inventory. This is the most critical piece of the equation currently. There are very few homes on the market in Livermore in general. 58 total as of today, 8 of those being attached homes. And buyers are plentiful. There is fierce competition for homes in most price ranges. The idea of lowball offers is one of the past. Banks are certainly aware of the turn in the market. While nationwide some cities are still feeling the pinch, the Bay Area of California is not overburdened with excess inventory, foreclosures or otherwise.
Price. REOs are no different from traditional sales in one regard. The list price may be under value, at market value or actually overpriced for the condition and location. As with any other property purchase, it’s important to have your agent run a comparative market analysis to assess the list price.
Condition. Some REO’s have been vacant for a very long time, and that may have had adverse effects on the property’s condition. There are some banks that will prepare the home for sale, and do a very good job, but it’s not a given.
Investor Friendly? Some properties are part of special programs to get homeowners back into neighborhoods. In these cases, offers will be accepted by owner occupants first. If no suitable offers are accepted within a given timeframe, then offers are accepted by non-owner occupants.
As Is Condition. Banks expect properties to be accepted in their as-is condition. Your impression of value may change greatly if and when you learn about property defects and deferred maintenance items and their associated costs.
Disclosures. Banks are exempt from many seller-required disclosures. They have never lived in the property, nor have knowledge of previous alterations or repair items. Buyer beware has significant importance for this reason.
Anticipate Inspection Costs. This is a critical part of a successful investment purchase. The only way you will know the true cost of owning this house will be to do thorough investigation of the house. Whole house inspection, roof inspection, pest inspection, chimney, pool, HVAC – there is no one to tell you what works and does not, so it’s best to know upfront.
Timing – When you make an offer to the bank, you may not hear back as quickly as you would from a regular seller. They can be slow to respond, just due to sheer volume. That said, they will more than likely ask you to perform quicker than a typical escrow on some of the time sensitive due dates. (such as inspection contingencies).
Contract – In addition to a regular purchase contract, you will receive a separate REO advisory to alert you to many of the differences between an REO purchase and a regular sale. You should read and understand these thoroughly. In addition, you will receive a counter offer from the bank (even if it’s not about price), showing their terms and conditions which are apt to be very different from a standard purchase contract. Again, it is important that you read and understand them.
Bank’s Motivation. The bank cares about two things – what they will net, and how fast the transaction can close. They have a non performing asset, so the quicker they close, the better. They may also offer incentives if you use their lender.
No Two are the Same. Banks have their own internal processes, thousands of employees and a plethora of agents who list their foreclosed homes. The nuances of the transaction can be very different from one bank to the next, and many of their processes are subject to change. With banks as sellers, every time is a new experience.
One of the things we discussed at a recent office meeting was the two kinds of Smoke Detectors on the market. I found this both eye opening and very disturbing; I strongly recommend you take a few moments and watch the video at the link below. There are actually two types of smoke detectors – Ionization detectors which are more responsive to flames, and the photoelectric, which reacts more quickly to smoldering fires. According to the National Fire Prevention Association, having both is the best protection.
Watch the video to see for yourself why it’s prudent to have both. Types of Smoke Detectors
Attached home prices in Dublin have jumped 12% over last year, and even more so over the previous month. First time buyers and investors compete to grab these properties before interest rates and prices go up.
As we saw in detached homes, this category too has fallen in terms of Days On Market. Market time is running on average, at just two weeks, necessitating buyers and their agents to react quickly when properties come on the market.
This chart shows that supply is down, and that demand is as well. But this can be a little misleading. Demand isn’t measuring those buyers who are trying to buy, but are getting beat out by multiple offers. The supply shortage is a common complaint from consumers and agents alike.
Down 62%, supply is only one factor leading to buyer frustration in this highly competitive category. Many of those trying to buy condos find that the complexes are not FHA approved. And investors are often disappointed to learn that HOAs aren’t accepting any additional non-owner occupants. These things can change though, so it’s always prudent to make further inquiries.
With the exception of April, the median sold price for San Raman detached homes has been up every month this year, showing a 5% gain over the same time last year.
Days on Market for detached San Ramon homes are down 31% over this same time last year, primarily to do inventory shortages.
Supply is down 58%, and demand shows that it is down by 31%. But is it? Ask all those buyers still trying to purchase homes, but there are few to choose from. Demand is not appropriately represented in closed unit sales.
And there you have it. With the supply of homes down 76% over a year ago, there is the biggest answer to the question – “How’s the Market?” What market? We need buyers and sellers for there to be a market at all, and the sellers are few and far between.
Attached home sales prices are up nearly 18%, always welcome news for sellers. For buyers? Maybe not so much.
Days on Market is down to nearly half the time as a year ago. Just 19 days on average. Hear that sellers? You can get your house sold now, with the low interest rates and inventory levels that are prompting buyers to take action now.
Supply is down more than half and demand is flat. Or is it? It’s hard to measure demand when buyers are out shopping, but don’t have much to choose from. How many would actually buy now if inventory was more plentiful?
So this is the most drastic of charts for all of the Market Reports in the area for the month. A drop of 89% in supply, based on current sales rates. I have one client who would certainly agree with that as he’s been waiting for a townhome to purchase. Here’s how that translates – at the current rate of sale, we’ll use up our existing inventory in less that 2 weeks!
The Median Sold Price inched down a little bit over the same time as last year. This category has been very volatile throughout the year, but more stable as we entered the summer months.
As with the other neighboring cities, Days On Market dropped here as well too. Not as significantly, but down never-the-less.
Supply and Demand in this category have fallen about equal amounts, indicating that we shouldn’t see any significant changes in price.
Month’s Supply of Inventory is way down, showing less than 1 month’s supply. Subsequent months will show if demand is flat or down due to lack of inventory. It’s much easier to spot trends when we see a couple of months forward and back from any particular month.