Real Estate FAQ

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In the housing market in the Bay Area, a seller's market occurs when there are more prospective home buyers actively making offers on homes than available homes on the market. The demand for homes exceeds the supply of homes that are on the market.  With the limited number of homes on the market, and more willing buyers competing for these homes, buyers are willing to pay more to get the homes, pushing up the price of the homes and creating a seller’s market.  A seller’s market also occurs when an influx of new prospective buyers enter into a certain area or neighborhood and adjusts the balance of the demand in relation to the supply of homes.  

In the housing market in the Bay Area, a buyer’s market occurs when there are more homes available on the market than active prospective homebuyers.  The supply of homes listed for sales exceeds the demand of prospective homebuyers in the market.  With the limited number of buyers, and more homes competing for these buyers, sellers are willing to lower their price points to attract these buyers and a buyers market is created. 

A stratified market in the Bay Area Real Estate market is when you look at a whole area and then break it down and identify different patterns and trends in the market.  For instance last year in September and October of 2020 Pinole and El Sobrante had the greatest increase in value for single family homes in Contra Costa County.  You literally could see the same comparable home in Pinole Valley sell for the mid $5’s in May and then that same comparable home sell close to the low 8’s by October.  During that same time if you took the pulse of the condo townhome market in Emeryville you would see condos and townhomes sit for over 30-60 days on the market and then go through constant price reductions to procure a sale.  In one case we were witnessing one of the craziest times in West Contra Costa for single family homes while at the same time seeing condos and townhomes taking a dive in Emeryville.  

In the Bay Area, it is standard practice for the seller to pay the commission for both the seller’s agent and buyer’s agent.  This is agreed upon at the time a listing agreement is signed between the listing agent and the seller of the home.  So, if you’re buying a home, you may get all the benefits of working with a Real Estate Agent for free! The commission is paid at the end of the transaction as part of the closing costs  and comes out of the sales proceeds at the close of escrow.  In some cases there are homes that are marketed where the buyer pays a premium to pay for the commission fees.  Always check with your agent if any of the homes you are making an offer on there is a premium to be paid that you are responsible for.  A great agent will give you the heads up beforehand if there is and then will help you factor into the offer to compensate for the added cost.

Now that you are asking yourself this question, this is the perfect time to speak with a lender.  I work with JVM Lending as my preferred lender Click Here to start the conversation.

 JVM Lending will:

  • Discuss your goals and answer ALL of your mortgage questions
  • Walk you through the homebuying process​
  • Provide you with​ valuable info on market conditions, monthly payments, loan types, cash to close, tax advantages, and more!
  • Help you gather any supporting documentation needed for your loan application.

Now that you are asking yourself this question, this is the perfect time to speak with a lender.  I work with JVM Lending as my preferred lender Click Here to start the conversation.

 JVM Lending will:

  • Discuss your goals and answer ALL of your mortgage questions
  • Walk you through the homebuying process​
  • Provide you with​ valuable info on market conditions, monthly payments, loan types, cash to close, tax advantages, and more!
  • Help you gather any supporting documentation needed for your loan application.

Depending on your goals and situation, Coin Davies can help you sell your current home at the same time as you buy one.  Schedule a 15 minute consultation with Colin Davies now: Click Here

Typically, each customized tour we will view anywhere from 1-4 homes.  Getting familiar with the neighborhoods, the market values, and the homes can happen pretty fast.  Giving yourself three to four weeks to zone in on what your desired area and home is pretty standard.  After determining your target, it is typical to make 3-5 offers before getting your offer accepted.  This can range between 2-3 months.  Some areas with limited inventories can adjust the timeline.

Earnest money Deposit, also known as EMD or good faith deposit, is deposited by a buyer into an escrow account by wire, personal check, or cashier’s check.  It is demonstrating the buyer’s intent to purchase on their offer. Essentially, it’s a way for a buyer to secure a contract with a seller to demonstrate they’re serious about making a purchase.  Standard to the California Residential Purchase Contract provided by the California Association of Realtors,  it is to be deposited within 3 days after acceptance.  In today’s market the contract is typically adjusted to be within 24 hours of acceptance.  In the Bay Area it is standard practice to set the emd to 3% of the purchase price of the offer.  

Additional money may be placed into escrow by the buyer, beyond the earnest money agreed to by both parties before close of escrow. Typically, in this case, the balance of the sale is financed through a loan—secured by a trust deed on the property—unless the purchase is made in cash.

In our state, California, for example, the maximum risk a buyer faces in an earnest money deposit transaction is three percent (3%) of a given parcel’s purchase price whether used or brand new construction, under California Civil Code, section 1675.  The earnest money is applied to the downpayment and closing costs at the close of the transaction.  If the transaction does not close and the prospective buyer uses the contingencies to cancel the transaction the earnest money is refunded to the prospective buyer from the escrow account through mutual written instructions of the principals.

In California a seller will have 3 days to respond to your offer after the offer has been signed, by you and your agent, and has been received by the listing agent.  This is standard to the Residential Purchase Agreement provided by the California Association of Realtors.  However you can adjust the contract to an earlier expiration on your offer depending on the strategy you and your agent discuss.  

If your offer was rejected, take some time to recap the rejection and take it as a lesson to improve on the next time.  Did you listen to your Realtor on terms and price points?  Did you get beat out by an all cash offer.  A lot of times your agent can get information from the listing agent on why your offer was not accepted or insight to where you were on the ladder.  This information is detrimental to tap into real time competition and where you stand and how you can adjust to get your offer accepted on the next go around. 

The simple answer is YES!  These days many sellers will order and provide a home inspection upfront to provide prospective buyers with insightful  information on the condition of the home.  Even if they do provide an inspection, make sure you take your time reading and reviewing the inspection report.  Calling the home inspector directly and asking them further questions will only help your understanding of the condition of the home.  Did the home inspection report recommend further inspection by a plumber, electrician, structural engineer?  If so, take their recommendation and contact these professionals for further inspections.  These further inspections will help reveal the significance and cost of the item from the report and help you decide if it is a deal killer or something that can be budgeted and scheduled into the timeline if you decide to purchase the home.  another home inspection or consultation with another home inspector.  Inspections allow prospective buyers to learn about major and minor issues with a home before going through with the transaction.  They are also great to put on a clipboard and hang in the garage as an itemized checklist for you to take care of as the new homeowner.   

YES!  A final walk-through allows you to walk through the home before it closes and becomes yours.  Although it is not a contingency on the purchase it gives you a final opportunity to make sure everything is right with the home.  Are all the repairs done that you might have agreed to with the seller?  When the home was being destaged did one of the sofas cause a huge hole in the wall?  Is the large bookcase and dresser still in the living room that was supposed to be removed? 

 This final walk through, will allow you to do one quick final walk through and make sure nothing significant has happened or didn't happen that was supposed to since the last time you were there.  It is usually pretty quick, about 5 minutes, and also provides a bit of final excitement before the home becomes yours.  You are not looking to see if it is dirty or the walls have smudges, but a chance to address any large issues that may need to be addressed  before the home closes.