Have you ever wondered about the phrases Realtors use when describing properties? Sometimes the meanings are obvious, like the phrases ‘diamond in the rough’, ‘earn sweat equity’, ‘contractor special’ and ‘fixer opportunity’. In my book, those phrases actually have several meanings. First and foremost, I am trying to sell the property, and I use these as marketing beacons to attract attention from every contractor and investor in the Bay Area. These should also be warnings to the inexperienced buyers that hey, you better know what you are getting into. Ever see ‘The Money Pit’ with Tom Hanks? Sometimes we sell money pits.
When it comes down to it though, most houses are money pits. They all need something. Sometimes they need a lot of big somethings, and the pits become deep and wide. If the pit appears shallow and the property has been properly maintained and updated, don’t be deceived. It’s still going to cost a bundle right out of the gate. Plus, you are likely going to be competing with other buyers for the ‘remodeled and updated’ homes. Contingencies will be short or non-existent. Cash will be king and queen.
Speaking of overpaying, multiple offer situations can mean any situation where more than one offer is received. No multiple offer situation is alike. Sometimes there are multiple offers below the asking price, but not typically in this market. Most often, multiple offers are received on a designated offer date, 7-14 days after a property comes on the market. However, it’s not unheard of for a property to be on the market for a month or longer with no activity, and then attract more than one offer. Economists will tell you that when a property is bid up over its asking price, it was priced under the market value. The market always reveals the true value of the home.
Sometimes when someone purchases a property, people think they overpaid. But the next thing you know, other homes around them are selling for even more! This dynamic happens a lot in our Marin markets, because there’s so little inventory and too many buyers fighting over whatever they can get their hands on. We are seeing a lot of that right now in early 2022.
There are lots of ways to attract buyers. I learned about the real estate profession from my first broker who used to say things like, “All pools are sparkling.” Except of course the green ones. She also liked to say, “All schools are award winning". They all won some kind of award at one time or another.” But did you know you can’t say that anything is within ‘walking distance’, because some people can’t walk? You also can’t describe a house as a perfect ‘family’ home, because there are people who might be interested in the house that don’t have a family.
I heard from someone recently that we aren’t supposed to use the word ‘potential’ anymore. That’s crazy because everyone and everything has potential. Potential to be great, or be a great failure. You could potentially spend a lot of money on a house and end up selling at a loss. We don’t see that much these days because appreciation has been so great.
I remember when I was a first-time home buyer, my Realtor told me, “The market in Marin always goes up. It never goes down.” I knew better of course. I got my license in 2004 when the market was going gang busters, then after the Great Recession, I reminded my first Realtor of what she told me. She replied, “What I meant to say was, real estate prices in Marin always go up in the long run.” But that’s not what she said, and too many people bought homes before the Great Recession with the impression that prices would never go down.
Come to think of it, these days it feels like prices will never go down. Don’t believe it though. The market will always move in cycles, and there will always be down periods. My Realtor was right the second time though, prices have always gone up in the long run in Marin. It’s only a matter of time.