The real estate market has been going crazy for months now, and it is clear it is not settling down in the way buyers would like. Maybe you haven’t even looked online yet, because you were waiting for a sign that it was time to begin your search for a home in San Francisco. The recent buzz around Twitter’s IPO is that newly minted millionaires will create even more pressure in neighborhoods like Noe Valley and the Mission — and because all real estate trickles down, the rest of the City, too. This plus interest rates bumping up a point or so, and it looks like for some buyers it may be now or never to begin a search for a home.
The first stop for a home search for most people is online at one of the many real estate websites. Within a few minutes of searching you will be saying to yourself, Gee wiz, it looks like there are a few places available in my price range. This is better than you thought, so you click on the “Contact an Agent” button and in no time you are talking to an agent, or you sent an e-mail to an agent and in a short while you have a response.
The news is often not what you expected. The property that tempted you is in contract or possibly even sold. How could that be? You just found it online! The answer is that on many websites it is up to the individual agents to update their listings, and sometimes that does not happen quickly. Even in good faith there is so much information changing hands that no matter how fast people work, listings may not be up to date. The obvious question you will ask is, “How can I make this work for me?”
Here are things buyers need to know about searching online.
One: When you first begin searching online, search for properties that have been on the market only a few days to avoid disappointment. This is known as “Days on Market” or DOM. Your first online searches are educational, and you are not going to miss anything if you don’t look at properties that have been on the market longer. Properties are selling so quickly there is no reason to spend time on listings that are for sale a week or more until you are up to speed on your search.
Two: Understand what it means when a property is listed “active,” “active continued,” or “pending.” There are other sub-categories, but knowing what these three mean will get you started in your search.
Active: Property is for sale. It is not in contract. The seller is actively seeking offers.
Active continued: Property is in contract. Buyer and seller have ratified an offer agreeing on price and terms. The seller may still be showing the home until all contingencies are removed.
Pending: All contingencies have been removed. Buyer and seller are awaiting funds to be transferred and escrow signings to be completed before escrow closes. Cash offers may close escrow in as little as three days, while buyers who need financing will normally close escrow in as little as 25 days or as much as 45 days.
Three: Do not assume information you find online is correct. The best thing is to consider the information you find to be a lead that will be the first step in learning about the property.
Four: Believe it or not, the fastest way to find out correct information is to ask your agent. It is never too soon in your search to have an agent. Part of a Realtor’s job is to provide information on properties for sale, and you will not be wasting their time. If your agent is too busy to help, maybe it is time find a different agent.
Five: When you contact an agent about a property online, do not be surprised if the agent asks if you are working with an agent. Agents do not get paid until their buyers close escrow and do not want to spend time with buyers who have agents.
We have all heard of deals being completed start to finish online with agents never meeting buyers or even sellers in person, but for the most part this is limited to investors or the very wealthy, not the average person looking for a place to call home. The Internet is without a doubt the place where just about everyone, at least in the Bay Area, begins a home search. To make the best use of your time, follow the guidelines I have suggested, and eventually the invisible pieces of the real estate puzzle you are working on will come together and you will own a home.