Buyer Question 1: Does ‘Winning’ Mean Overpaying?!

2018 is flying fast… and as usual so are the homes! We don’t envy buyers today; supply is low, prices are high and multiple offers are the rule rather than exception. In last week’s blog, we promised you we’d address the state of the market here in Silicon Valley by exploring the three questions that we hear the most – from both buyers and sellers. We thought we’d start with what is on EVERY buyer’s mind: How can we get our offer accepted…without paying too much for a home?!

The hardest part of this question is that ‘value’ is a pretty subjective term. Every home has a list price, an appraised value, and a final sales figure. The difference between those can vary tens of thousands of dollars… if not much more! So first we’d like to acknowledge that the value of a home in Silicon Valley is anything but straightforward.

We always remind our buyers to ask themselves TWO questions:

1)      What is the home worth?

2)      What is the home worth to you?

#1 is something we have a pretty defined formula for; for EVERY home you make an offer on, we will perform an extensive market analysis including pulling recent comps, assessing current market conditions, researching pending sales & upcoming listings and more. The result is a very tight range of what we believe the home will appraise for.

#2 is something that depends on you – the buyer. Only you know the value of the neighborhood, the floor plan and the location to YOU. Could you pay less for something somewhere else… and would you want to? Is there a cost to you of waiting – in terms of your other life circumstances and plans. We can work through all of this with you and make sure your offer feels like an accurate representation of what this home is worth to you.

The last major factor in value is what we call ‘the dinner party factor’. It’s much like deciding what you are wearing to a dinner party based upon who else is going to show up at the table! If it’s just Grandma and Uncle Stan, jeans might be fine. But if Oprah’s gong to be in the house… you’ll bust out your finest apparel, right?

This same concept applies to the value of the home, which is largely dependent on who else shows up at the offer table. This is where our research and relationships will come into play. While no one can control who is going to make an offer – we’ll do our best to help you scope out the competition and what winning means in THIS game.

There are other components of a winning offer that have nothing to do with price. Some have to do with strategy (can you offer the seller a term that no one else can?) Some have to do with home condition and inspection results (are you willing to push your budget limits if the home is in tip-top shape?)… While picking the number is never easy, it also isn’t magic. It’s experience…. And that is what we are proud to offer every buyer we work with, every time.

In sum… you CAN win without overpaying, if you let us serve as your barometer when things get heated. We aren’t going to push to get you into just any home, we are going to give you a reality check or two along the way. If we didn’t – we wouldn’t be doing our job  to get you exactly what you want & need in your home here in Silicon Valley!

Check back next week for the 2nd most asked question by our buyers... we know you are wondering about it too!

~ Mark & Jason