April in Marin: Market Springs Forward From Winter Hibernation

After a very rainy March (and February, and January…), the skies finally cleared up at the end of the month for one of the first clear weekends in a long time. Out popped the buyers like flowers in a Super Bloom as the Open Houses were bustling and busy. Were they curious neighbors, casual lookers or serious buyers? That will be determined in the days to follow as we wait to see if listings change from Active to Contingent or even straight to Pending, meaning no contingencies. That’s a smart strategy for some, offering to buy with no Loan or Inspection Contingency. But is it for everyone? Let’s talk about that.

If you’re buying your first house or your last house, you have to offer a price, but you also have options when it comes to a couple of major negotiating points: the contingency periods for Inspections and for Financing. You want to be the successful bidder, whether or not there are other buyers and multiple offers. If it’s early in the going, the seller may want to take a pass if your offer feels weak, or less than what they’re expecting. This doesn’t just mean on price, which is only one component of your offer. Even at full price (or more), most CA real estate contracts are written for the buyer and really just an opportunity to “tie it up”, as you hear often. Given nearly all buyers are well-approved in advance for a mortgage these days (unless they’re paying all cash), this mostly comes down to an Inspection contingency, lasting usually from 7-14 days.

The buyer secures price and terms, then proceeds to do inspections. Once receiving their reports, they can opt to move forward, back out or renegotiate the terms of the deal. Sound like the buyers hold all the cards? They do. But sellers know that and often can hold a few cards of their own.

First way to avoid this as a seller? Get all your reports up front: Termite, Home, Sewer Lateral, Roof, Pool if you have one. The buyer can take a week to review all these prior to writing an offer, or ask for a 3 day “Review” period as part of their Inspection Contingency. But either way, you know what you’re selling and they know what they’re buying right up front. The chance of the deal being renegotiated or the buyer walking away are now basically zero.

The other option is to just sell it As Is, with no reports or inspections, but you may just get lot value, or low offers, neither of which benefits the seller, only the buyer.

That’s it for now. Let me know of any questions, but enjoy April, wherever you are. Stay safe, thanks for reading.

Ted

415.377.5222
ted@gomarin.com

Filed under: Marin Real Estate Blog by Ted Strodder