Published in July 6, 2006 in 9 Bay Area Newspapers’ Sunday Supplement.

Buyer Be Aware:
Great deals arise from market slump

Taking a stroll down a charming tree-lined residential lane in an East Bay city recently, I couldn’t help but notice the proliferation of “for sale” signs. While real estate turnover has always progressed at a healthy pace in the bewildering yet exciting realm known as Bay Area the real estate market, an unusual phenomenon, a slight downturn in sales, is, somewhat ironically, generating quite a stir amongst potential buyers. Are the little rectangular lawn announcements literally signs of the times? If so, they seem to proclaim that while the market has yet to sustain any critical wounds, the longer these physical manifestations of the sluggish rate of home sales remain in plain sight, the harder Bay Area home sellers will have to work to attract buyers. Conversely, the visual reminders are beacons of hope for buyers. As they dot the local landscape with an uncharacteristic longevity, potential home buyers should capitalize on the eagerness to sell. 

Mary Merrick, an Oakland based realtor with the Grubb Company, counsels clients to employ a range of techniques to finesse the best possible deal. “The opportunities are with the homes that are sitting on the market a bit longer,” she explains, “With these homes, buyers have the luxury of taking more time to have thorough inspections completed.” And inspections are paramount to ensuring that costly home projects will not become major financial burdens in the future. “Before, with seven or eight other potential buyers competing to place bids, people were not going to ask [the seller] about a drainage problem,” Merrick suggests. Another example would be pest inspections for termites, roaches, rodents or, gasp, even bats. Other inspections may encompass anything from checking the home’s foundation for cracks to the ensuring that there are no leaks in ceiling and roof. If any substantial problems are brought to light, the property owner may elect to have the issue resolved before the sale is complete (while it’s in escrow) or to pass the responsibility onto the future owner along with credit, money taken off the asking price, for the deficiencies. “Now that buyers realize that the seller may be in a more urgent position to sell, they are asking for credit for the problems. They realize it may represent a large monetary situation for them down the line,” says Merrick.

One of the recent developments that may be an underlying cause of the sales slump is the rise in mortgage interest rates. “With a lot of the rates starting to reach seven percent,” Merrick says, “it is starting to affect the market, especially the ‘starter home’ buyers.” They are particularly aware of the increase in rates because, “they’re very conscious of their monthly rates. Home owners who may want to upgrade are another group affected by the rate increase,” she continues, ”People are choosing to stay with their houses [rather than upgrade] in order to keep their lower interest loan locked in.”

The tendency to inertia, the impulse to just stay put, may be detrimental in the long run. “The nature of the buyer may be ‘let’s wait and see,’ but while you’re waiting, the interest rates just continue to creep higher and higher,” Merrick cautions. She also ascribes to the notion that buyers shouldn’t just, “fall asleep at the wheel. After all, it’s all serendipity. You might just be at the right place at the right time and be the only or the first buyer there and so you’ll be the one to get a great buy.”

For more information about Mary Merrick, visit www.grubbco.com.

Are you a Bay Area realtor, interior designer or architect? If you would like to be featured in Local Outlook, please send inquiries to carolefreelance@yahoo.com.

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