New Silicon Valley home buyers sometimes wonder how long the process is going to take before they find the right home. A lot of the answer depends on the motivation & commitment of the would-be home owners.
Some home buyers are extremely clear on their priorities and budget and are highly motivated to get into a property and strongly want to start enjoying their new home. For them, seeing 5 or 10 homes that meet their basic criteria will be plenty. Often this takes only a couple of weeks, maybe three weeks if inventory is a little scarce. They will be pre-approved and are ready financially before really looking in earnest. If they are willing to come in with a strong offer (since multiple offers are continuing to happen), they may even be successful with the first offer attempt. These highly motivated and highly organized buyers can go from looking at Silicon Valley real estate to moving in within 6 or 7 weeks in many cases. A few buyers see just one house and are ready to buy. That is the extreme!
At the other extreme are folks who are interested in purchasing a home but don’t want to push themselves too much and aren’t willing to make compromises on their wish list. They may want to see an excessive number of properties. (I once had a buyer tell me that they may need to see 100 or more houses. Talk about scary!) These buyers are pre-approved and have money in the bank, but if they write an offer, it will not be highly competitive. Most of the time, they look, read disclosures, and opt to pass. If they spend a year or more doing this, the odds are that they will not buy at all, but instead will become permanent renters. Why is this? The home prices often continue to rise and outpace their ability to save and also outpace their income growth, so as they wait, their “buying power” shrinks. Ultimately they get priced out of the market.
There are a lot of buyers in the middle of these two approaches. They may see 20 homes but it’s spread out over 6 months or more. Sometimes the cause is a lack of priorities (or shared priorities if there are 2 buyers). At other times, the seriousness of the quest may be missing (or again, perhaps only one of the two may really be devoted to the idea of finding and buying the condo, townhouse or house). When that happens, one buyer will like many houses or condos, and the other will veto most. It’s stressful for everyone when this happens (and is extremely awkward if the couple fights in front of their agent, I might add!). They may have to write many offers, either because one is much more conservative than the other (and less motivated) or because they just have trouble accepting how challenging the buying conditions are and aren’t willing to push themselves. (In a hot sellers’ market, conservative buyers will usually be unsuccessful, unfortunately.) Many home buyers will end up bidding on one or two properties before being successful. If that happens to you, realize that you are not alone!
In many cases, the longer you search for a home without buying, or especially without even making an offer, the less likely you are to buy at all.
What can you do to shorten the amount of time you spend looking and bidding (unsuccessfully)?
- Do your research online regarding locations – this is the #1 most important decision you make
- Be clear on your priorities, and get equally clear on the non-negotiables and things you would like to have versus those you must have
- Have your finances in order, your cash in the bank, your credit cleaned up and be pre-approved with a reputable lender
- Study and accept whatever the current market conditions are. If you behave like it’s a buyer’s market when it’s a seller’s market, you are very unlikely to be successful with your home buying attempt. Or if it’s a buyer’s market, be realistic on how many concessions the seller will be making on price and terms.
- Work with a strong buyer’s agent who will educate, guide and coach you – and who will tell you what you need to hear, not what you want to hear
If buying a home in the San Jose, Los Gatos or Saratoga areas is something you are wanting to do, please contact me for a free, no-obligation consultation. We can discuss the market, the process, and your plan.