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Regular folks transform into cash buyers to compete in hot housing market

Sat, 29 Jun 2013 14:16:58 +0000

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“Cash is king” is an all-too-true cliche in today’s Bay Area real estate market, where all-cash offers can beat out those with mortgages, even when the financed offers are higher. That’s motivating some folks — even fairly regular people who don’t have Silicon Valley mega-bucks — to go the extra mile to be able to make cash offers.

Whether it’s borrowing from relatives, taking out a home equity loan, tapping retirement funds, or a combination, having that cash in hand can vault a buyer to the front of the line. For a detailed look at how some ordinary people took extraordinary steps to become cash buyers, click here.

“It’s an oft-told tale right now,” said Stuart Maus, an agent with Red Oak Realty in the East Bay. “The market is super-competitive. A cash buyer can afford to lay up a little bit, knowing that the terms of all cash and the ability to have a short close may counter a slightly higher offer with a longer escrow period. A buyer with all cash can sharpen their pencil and come in more aggressively with price.”

Consider 3361 Victor in Oakland’s Redwood Heights neighborhood (pictured above). The modernist home closed in late April for $820,000, 19 percent over asking.

“The winning buyer paid all cash with no loan or appraisal contingencies and a three-day inspection period,” said Aman Daro of Red Oak Realty (Red Oak’s Deidre Joyner was the listing agent). “There were three offers. The highest offer had inspection, appraisal and loan contingencies, so the listing agent got the lower, all-cash offer to up their price and the sellers accepted it.”

Shana Negin and her husband, who both work as technology creatives, got financial help from her parents for an Oakland home, in which all four of them put their names on the deed.

“They wanted to put some of their retirement investments into something stable and also wanted to help us out,” she said. “Even though we have a pretty decent income, we were never going to have an opportunity to buy a house without that kind of help,” she said. “In a broader picture, people’s parents have been helping them throughout history. If this is a trend, people are just returning back to the way it was.”

Even people who buy with all cash may very well want to get a mortgage afterwards so they can pay back the source of the funds or simply have more liquidity. There are a number of issues cash buyers should consider in structuring their purchase to make sure that their cash-out refinance will go smoothly. For advice from mortgage pros on this, click here.

“A responsible buyer will not only have their cash lined up for the purchase, but will have a plan for how to manage ownership of the property in the year ahead,” said Dianne Crosby, senior vice president of RPM Mortgage in Orinda.

Carolyn Said is a San Francisco Chronicle staff writer. For news and insights on Bay Area real estate, follow her on Twitter: @csaid

Article source: http://blog.sfgate.com/ontheblock/2013/06/07/regular-folks-transform-into-cash-buyers-to-compete-in-hot-housing-market/

San Francisco Real Estate Market is Competitive, Strong and Increasingly …

Wed, 03 Apr 2013 20:17:22 +0000

San Francisco, CA (PRWEB) April 03, 2013

The housing market in San Francisco is leading the country in growth with a large demand for housing and a limited supply of inventory. Latest statistics from San Francisco Association of Realtors are showing February year-over-year single-family home inventory dropped by 38 percent while condo inventory dropped 33.3 percent for the same period. In any seller’s market, buyers work hard to be more appealing in making an offer. This begins with an increase in offer price, changes to financing parameters, and occasionally, waiving contingencies in extremely competitive markets, such as San Francisco.

Contingency-free offers bring risks. This is especially true in a city where many of the homes are older. People are not requiring the same inspections, repairs and other safeguards put in place to protect the home buyer. The calculated risk can pay off for some buyers but others, whose financing requires these contingencies, end up losing in the multiple offer situations.

“Cash is still king. More buyers are not only submitting offers well over list price, typically in the 10 -20% range, but the market place is seeing an increase in contingency-free offers,” says Dahle. “This has made the buying environment even more competitive. What are the risks for the buyer with financing versus cash buyer and how does one mitigate those risks? Especially when the offer involves limiting or ditching the safeguards of contingencies? It’s called calculated risk. Each property is different.”

Only the most informed real estate professionals can guide you through the ups and downs of the San Francisco Bay Area real estate market, and Kirk Dahle has been doing just that for buyers and sellers for several years. A relentless advocate for his clients, Kirk is constantly networking with real estate professionals to find the best listings and to bring a property to market. Contact Kirk directly at sfkirk(at)gmail(dot)com or call 415.203.8638.

Read the full story at http://www.prweb.com/releases/2013/4/prweb10586144.htm

Article source: http://www.digitaljournal.com/pr/1165943

Real Estate "Flash Sales" Prove Market Is Hot

Sat, 23 Mar 2013 11:57:45 +0000

If you’re looking for a home in the Bay Area, you will probably need two things on your side: luck, and a lot of cash.

Those who aren’t willing to compete with up to dozens of other offers on a home are now trying to buy it – hours after it’s listed on the market.

The new trend has been dubbed by realty experts as “flash sales” – any sale that happens within 24 hours.

For example, a home in East Palo Alto on Gates Street was put on the market on March 19. It got nine offers the same day and sold for above asking price within 24 hours.

Glenn Kelman, CEO of online real estate brokerage Redfin which is set up in 19 U.S. markets, said that trend is growing in the Bay Area and calls it “Ground Zero” for an incredibly hot housing market, one that experienced an incredible boom at the start of 2013 in January.

“In the Bay Area in the past six months, we’ve seen 1,000 homes get under contract in less than 24 hours. It used to be a fast sale was three days – now, it’s three hours,” Kelman said.

Ken DeLeon, a realtor, said his latest listing is a 1200 square foot home in Palo Alto that he just put on the market Thursday. “The amazing part is just within 24 hours, we already had a client with a Chinese all-cash buyer offer us more than 300,000 above and we said, ‘No thank you, please wait,’” DeLeon said.

He and other realtors said they’re still catering to those wealthy foreign buyers, mostly from China and Russia; however, with historic-low mortgage interest rates and an inventory that’s also hitting record lows, they said the competitive cash offers are no longer limited to the high-end homes.

“That’s the main trend. It’s spreading out to other neighborhoods that once weren’t so hot,” added Kelman.

The Silicon Valley Association of Realtors compiled data from MLS listings for the South Bay. According to its numbers, for single family homes between February 2012 and February 2013, inventory was slashed by 52 percent in Santa Clara Country and 44 percent in San Mateo County.

Both experienced more than 30 percent in increase of median sale price. Redfin’s numbers show just how competitive it’s gotten in the last couple of months.

A San Francisco home in the Sunset District had 29 offers, a townhouse in Oakland got 15, and one on Dauphine Avenue in Fremont was hit with a stunning 65 offers. That house eventually sold for at least $100,000 more than the half-a-million asking price.

“There are sometimes traffic jams outside open houses,” said Kelman. “Folks get worried they can’t wait for the offer deadline on Sundays, so they make a preemptive strike to try and buy it on the spot.”

He said Redfin and other companies offer “mobile alerts” that let customers know almost immediately after there’s a new listing on the market. He believes that has also contributed to the high competition and quick sales.

Both he and DeLeon agreed on one more thing: the only relief, if it comes, will be when people decide to start selling, and when you’re talking about the Bay Area, there is no way to predict when that will happen, or if prices will go up or down.

“I hate it when people ask me about Bay Area real estate because it defies all the laws of physics,” Kelman lamented. “When you look at Chicago real estate, Atlanta real estate, you know what goes up must come down. It’s going to act like a normal economic market, but in the Bay Area, it seems there’s all sorts of money from the tech economy. There’s all sorts of people who want to move here for the sun. I can’t way when it will ever let up.”

Article source: http://www.nbcbayarea.com/news/local/Real-Estate-Flash-Sales-Prove-Market-Is-Hot--199652731.html