Chic vs. Geek: Non-Contingent Offers

Contingent offers have been on the rise of late, indicating an increase of buyer power. But sellers still have the leverage to accept non-contingent offers. So what do buyers and sellers need to know?

CHIC (PEARL)

First and foremost with a non-contingent offer, a buyer may risk losing their deposit or paying other damages if they decide not to purchase after the offer is accepted. The buyer also loses their right to an inspection contingency, which could uncover issues that need correcting but become the buyer’s problem. The good news is that even with non-contingent offers, buyers have the right to cancel an offer if the seller does not provide a Transfer Disclosure Statement (TDS) beforehand or the TDS is updated or modified during the transaction.

GEEK (KEVIN)

It may be tempting for a seller to accept a non-contingent offer in order to have a quick turnaround, but there are plenty of snags that can get in the way. For example, it’s wise to verify if the buyer has the funds to make the down payment or buy the property outright. There’s no guarantee the buyer can get a loan or that an all-cash buyer can come through. And buyers who feel powerless in the purchase process are more likely to file claims and disputes that could hold up a sale for months, or worse, force you to take the property off the market entirely.

Geek's Number Talk: Market Snapshot - Santa Clara County

As expected, Santa Clara County home sales were down in July, dipping nearly 50% under last year. Meanwhile, prices remain high, though with little change year over year. One thing to watch is the time properties spend on the market, which is stretching out and providing more opportunity for negotiation.

Geek's Number Talk: The Impacts of Rising Mortgage Rates.

It should come as no surprise that rising mortgage interest rates have a direct impact on home buyers and sellers. These two charts help make those impacts crystal clear, especially when it comes to purchasing power, inventory, and selling price. As you can see, an interest rate increase of just 0.5% triggers a 4.4% increase in home price but also a 4% decrease in active listings.

Meanwhile, the median house price is down 4.7% month-over-month but still up 4.5% over last year. This means home affordability is tracking down, so the time to act is now, or you risk waiting out the current economic fluctuations.

Geek's Number Talk: Market Analysis for You

As we discussed in this week’s Chic vs. Geek, our job as real estate agents is to provide buyers and sellers with nuanced perspectives on their properties. One key element in setting home values is a Comparable Market Analysis that looks at sales activity for similar homes. Send us an email to request a report today!

Geek's Number Talk: Foreign National Homebuyers

It’s hard enough remaining competitive in the housing market when inventory is down and interest rates are up. It gets even harder when many homes are purchased by foreign nationals and businesses. Typically, these homes sit vacant, taking up space while their owners wait for a chance to flip for a profit.