San Diego Housing Markets Require Different Types of Offers and Negotiations

San Diego Housing Markets Require Different Types of Offers and Negotiations

Article by Rob Presley

San Diego Housing Markets Require Different Types of Offers and Negotiations – Business

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It’s been a wild ride in the housing market for the past 10 years, it was “up, up, and away” as San Diego home prices went through the roof for five glorious years, quickly followed by a collapse in home values in the grips of a deep recession. After all (or most) of the dust has cleared or begun to clear in the housing market we begin 2010 with the tale of two San Diego housing markets, the “Under $ 500,000” market and the “Over $ 500,000” market.

In today’s market you have 2 distinct segments of the market. These two segments are divided by price with homes priced below the $ 500,000 range generating multiple offers, often with one or more above the list price, and then homes priced above the $ 500,000 range that have just begun to show real buyer interest, but are by in large a buyer’s market.

These market variations require completely different offer and negotiation strategies to be successful at the best possible price for you, the home buyer. In San Diego one market segment is “on fire” and the other has just begun to awaken.

Compare the two:

Under $ 500,000 San Diego Homes

(1) Pre-Approval Req’d – ABSOLUTLY (2) 1+ Offers Over List ->50% (3) Typical # of Offers – 3 to 4 (4) Avg. # of Days Listed – Few (5) Who Decides Escrow Terms – Seller

Over $ 500,000 San Diego Homes

(1) Pre-Approval Req’d – YES (2) 1+ Offers Over List – <5% (3) Typical # of Offers – 0 to 1 (4) Avg. # of Days Listed – Many (5) Who Decides Escrow Terms – Buyer

The reasons for the market divide are simple. Many homes priced under $ 500,000 make fundamental sense and attract a lot of buyers because they are equal or better than the alternative rental costs. Additionally, you can still obtain high LTV financing and get 100% (V.A.), 96.5% (F.H.A), and even 99.5% financing for most homes under $ 500,000. These components combined create ideal purchase situations for the majority of the population.

San Diego Homes priced over $ 500,000 begin to require significantly more down payments. They also were slower to come down in price enough to make decent fundamental sense when compared to the rental alternatives. This market has recently begun to bring out more San Diego and out of state home buyers as headlines about increasing median prices and sales numbers signal a bottom of some degree in home prices. Mostly cash buyers, especially since “Jumbo” loans are harder to qualify for, these buyers are long term buyers that are comfortable buying while prices are low as opposed to attempting to perfectly time the market. The right home is typically a hair more important than the final purchase price.

Negotiating a good offer for an under $ 500,000 home means creating an offer that is not only better than the competition but also one that the seller (often a bank) can accept outright and without the need for a counter offer. Knowing what most banks want and don’t want on a contract is critical to writing an effective offer in today’s distressed market environment.

Negotiating the purchase of an over $ 500,000 San Diego home typically means the comparable sales and listings, the sellers situation, and being willing to walk away if you can’t get what you want. Most sellers in this market segment have a lot of competition compared to number of buyers and accept that they currently have little to no negotiating power. Coastal San Diego and other “Prime” San Diego properties may however vary.

As a disclaimer, this article was written on 1/24/10 and markets change, sometimes quickly, sometimes slowly.

About the Author

Rob Presley is a 20 year San Diego Real Estate Expert with over a billion dollars of San Diego Real Estate Purchasing, Sales, Financing, and Construction experience. To view all San Diego Home and foreclosure listings or get more information on how to purchase a San Diego home visit: http://www.PrestigeRealtySanDiego.com

Use and distribution of this article is subject to our Publisher Guidelines
whereby the original author’s information and copyright must be included.

Rob Presley



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Rob Presley is a 20 year San Diego Real Estate Expert with over a billion dollars of San Diego Real Estate Purchasing, Sales, Financing, and Construction experience. To view all San Diego Home and foreclosure listings or get more information on how to purchase a San Diego home visit: http://www.PrestigeRealtySanDiego.com












Use and distribution of this article is subject to our Publisher Guidelines
whereby the original author’s information and copyright must be included.

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