Buying in a pandemic

In the podcast, Fred and Mistry discuss buying during a pandemic.

Fred says that the first question he asks prospective clients is “Why are you trying to buy during the pandemic?”And the answer has been basically, “Hey, we’re in a one-bedroom apartment. We got one baby and another on the way we got to get out of here anyway, we spent plenty of time, because we had it getting pre-approved looking for Redfin finding places. So we figured we might as well.”

The problem is to multiply you by 1000. Roughly, depending on the house, you know, and also understand that other people have the same taste you do. So when there’s really a nice tastefully done house with nice equipment in it on a good location on a great street with a good school district. Everybody wants that. So it’s like there’s one banana left in the supermarket. 50 people are outside, they all want a banana. That’s the way it is. And it’s like the banana republic of real estate at this point. So there are a whole bunch of things. Now let me just tell you, every single house is not like this, that desirable ones are and you know what they are, as I kind of just described, there’s another property that’s just sitting, and I’ll discuss that after because that’s kind of the secret sauce of finding a house if you can’t get into the crazy bidding process.

Okay, so let’s start, let’s take your typical four-bedroom, two-and-a-half-bath suburban house on a 7000 square foot. Lot. It’s a 2800 square foot house. It’s located in a great neighborhood with a school district that has a nine on it. And it’s price let’s just for fun, say a million dollars. So here are the two things that happen. Number one, either the listing agent is going to say on this date, we’re going to take all your offers. That’s your worst case. That’s your worst scenario. And why is that? Why is that your worst scenario because everybody is bidding at once? So you have all the competition. Now if there’s a property that is available for sale, but they don’t have a date on it, here’s the number one thing you have to understand and know no matter what, go and see that house as soon as you possibly can to determine if you’re going to want to buy it. I mean as soon as possible.

You’re on Redfin, you have the alerts going, you get that alert. You’ve to slack me tell me “Let’s see this today, between four and seven.” Fine, we’ll make the appointment as quickly as we possibly can. So that’s number one. And if you get it, you like it, you write it. And I don’t care if there are disclosures or anything because I just lost two houses client was going to see him on Saturday. Today is I made the appointments on Wednesday morning, Wednesday afternoon, I got an email. It was the same listing agents a matter of fact, and both are under agreement. Gone, because the seller, thinks about the seller. It’s really important. It’s got nothing to do with you, but it’s all about the seller. So the seller wants to be comfortable that they know they got a great price with great terms they can accept like nobody trying to do 15,000 inspections after you’ve done inspections and termites. They’ve waived the mortgage or paying cash or they’re getting a loan super quick. They’re going to close in a very short period of time. So there are reasons that this thing went off. Basically, the seller said, Oh my god, I have to take this offer. So you have to be prepared to do the same thing to have

The seller says, Oh my god, we’re going to take this offer. So let’s talk about that secondary problem if everybody bids at the same time. So here’s what’s going to happen by that point. You should, if you’re in Northern California, and you probably don’t, if you’re anywhere else, have inspections, termites, all that stuff done on the property. If they are, no matter what the results are, you just have to waive them.

I got the inspection. Okay, thank you very much.

You can buy a home warranty for like five or six hundred bucks, and it solves some of your questions about appliances and things that go wrong and water heaters. But as long as structurally, the property is good, and you know, there’s going to be minor repairs in every used house, think about buying a used car done. It’s always something. So as long as the homeowners have been, quote, unquote, changing the oil, and keeping maintenance up, you should be okay. And you could look at a house and kind of feel if there’s something wrong or not.

So anyway, you have to, when you bid multiple bid situations, waive the inspection, waive the termites, there are always termites in California because it doesn’t freeze, so you’re gonna have to get rid of them at some point in the ownership anyway.

So those are waived, the appraisal is waived if you’re going for a mortgage, and if you’re going through a mortgage, you’re going to waive the loan. So you’re gonna put up 3% of the sale price.

And if you don’t go to closing, you lose it. So you have to get pre-approved, super pre-approved or we could come up with some crazy name. But the point is, the lender has to be ready to just order the appraisal on the day you give them the agreement of sale. Having previously had an underwriter, look at the file, make sure your W-2’s, pay stubs, bank statements, everything’s excellent, cleared, clean, ready to go. So all they need is title insurance stuff, the appraisal back maybe an updated pay stub and bank statement and has to go back to underwriting one more time. So you could probably get a close and roughly 15 to 21 days. That’s an important question to ask your loan officer. Because they will be able to tell you and then you’ll be able to make an offer. Now price. I had a deal last week or two weeks ago, list prices, one three, something like 1379, my people bid 1498, or something like that. And the agent come back to me and said, We have taken an offer that was substantially higher. Now I don’t know what to close that because you don’t know until it closes. But it’s insanity out there. It’s just absolute insanity.

You have to be prepared to overpay and waive everything give up. Basically everything you normally would in a normal deal. So, scared yet? I have been successful with these. every deal is a little bit different. I have to kind of feel out what the agents are looking for.

There’s a lot of factors that go into it. So don’t be scared too much. But just realize you may have to do that. And I just did it with three clients and it worked.

They got the house they wanted. Yeah. They paid a little more. Yeah. Also, another thing I like to do is make sure I’m the backup offer. So if somebody can’t close for some reason, I’m right there. I got a house that way for a client in San Carlos a few weeks ago. People bowed out. They said are you still interested? Yep, we work right away, got the agreement, got it to escrow, boom, boom, boom, done. So backup offers, that’s another way.

That happened with a home we did here in LA that they said was already in escrow. And then I just followed up with the agent. And turns out it was back on the market before it was was even back on the market and our buyers got it.

Exactly, exactly. So that’s our job is to you know, keep pushing these things. So there’s a bunch of little things that we actually do. So for people who say, Oh, I don’t need an agent. Well, sometimes you do and there are some good reasons for it. Especially in this crazy market. Well, you don’t need by the way that thanks, jack behind there. My cat. He’s fine. It was so good. You don’t need an agent. You need an Arrivva agent. You need to know you don’t need an agent. You need Arrivva. Yeah, there’s a better route. We’re coming up with fun stuff today. You’re welcome. Yeah, thank you. So anyway, let’s now let’s go back to the rest of you that are crying in a pool of tears because you can’t buy a house.

Yeah, pandemic-wise, you actually can. Let me give you a couple of ideas on what I’ve done. And again,
it’s going to vary between the market and everything else. The first thing I do is I have, I’ll give you example the client. He was looking around, let’s say million dollars help here in Foster City and Redwood City in Northern California in the mid-peninsula. So we were getting frustrated, some things I’ve been talking about getting overbid, etc, etc. We finally figured something out. Let’s look at everything on the market for at least 30 days at this point. Because but hadn’t sold them 30 there’s something wrong. Mostly they’re extremely overpriced. And usually, there’s a combination of there’s something wrong with the place in addition to it being overpriced. So we found one of these. It was a townhouse that the backyard faces the street that you think would be busy. But we actually figured this out. It’s a corporate area near where Cisco’s headquarters is. And it’s only busy. You know, at nine-ish and five-ish. And these people are going slow anyway. So we went there two different times. We listen, we made sure. And he was fine with it. It was a townhouse. nothing too exciting, and we got it for about I think $75,000 less than what they were asking. We went in thinking, yeah, we’re not kidding, get this, but we did it and we got it. So and it closed. So the idea is that you got to look at stuff that may not appeal to you or may not appeal to most people. And that’s the key. Got to get a little creative. My favorite thing is real estate. And I quote me all the time on this. There’s nothing a sledgehammer and money can’t solve. Okay, very simple. So if you go into houses laid out stupid you can ask any of my buyer clients when I go with into a house and we go into an older house and the first thing I say is to take this wall down. Why did they put this wall up? I mean, there are walls that just show up for no reason. So get that sledgehammer out and get the engineer to make sure it’s structurally sound first, but it can be done so get a little creative it might have been an ugly layout house but go in there and knock some walls down you got yourself a flow it’s just gonna depend on the house by house. So look at the stuff that’s on the market and isn’t selling you know if you think you have a twinkling of offering something on it, go ahead go for it. It’s crazy out there but you never know what somebody is also going to be motivated by.

It’s you know, like the old boy scout badge of “Be prepared you to have to be beyond prepared.” I think this is the new word for it. So sledgehammer money beyond prepared. That’s what Arrivva can help you do.

Posted in ,

Buying a Home? Get Cash Back.

Curious to see how much you could save? Our intuitive rebate calculator provides an estimate of the cash back you could receive when buying a property with Arrivva.