Home Truths, a quarterly report on the state of the Berkeley real estate market, is brought to you by Red Oak Realty.
By Paul Hagey
Berkeley buyers, like all East Bay house-hunters, want to throw their hands up in the air and curse the gods right now.
Homes are scarce in Berkeley, making the few that come available as competitive as a last-minute Chez Panisse dinner reservation.
The numbers around single-family homes back up this scream-at-the-heavens challenge for Berkeley buyers. (Sourced from the local MLS and analyzed by Red Oak Realty).
- Berkeley’s scraping the bottom of the listings barrel. The city had 2,000 listings in 2015, down 2% from 2014 and nearly 25% down from 2012’s 2,647 total.
- In 2015, the median Berkeley home sale price jumped to an all-time, eye-popping high of $1.05 million, a 19% leap from 2014, and a 66% skyscrape from the 10-year low of $630,000 in 2011.
- Bummed yet?
- On average, Berkeley homes went for 17.1% over asking in 2015, by far the highest measure in a decade. That’s a jump of 3.2 percentage points over 2014’s list-to-sale price. In 2011, homes went 2 under asking.
- Homes flew off the market quicker in 2015 than they have in a decade, remaining available for an average of just 20 days. This speed was most closely matched in 2013, when homes lasted an average of 22 days.
To win a home, Berkeley buyers must be persistent, diligent, a bit lucky and have a great agent.
Offering top dollar is the chief factor in winning a home, but Berkeley buyers can employ a number of tactics to gain a competitive edge over the many hungry competitors poring over homes like undergrads tackling blueberries on Berkeley Bowl’s discount rack.
A few Red Oak Realty agents shared how they and their buyer clients won homes in 2015.
1. Offer gifts to the seller
If you have a cool, appealing skill or service, lump it into the offer. Red Oak Realty agent Charity Ankrum — member of the Leif Jenssen, Charity Ankrum and Tamir Monsour Team — has had buyers who are massage therapists, chefs, photographers and personal trainers include their services in their offers, which helped them win homes.
Sellers have rarely taken buyers up on the offer, she said. But it serves as a personal gesture that sometimes sways sellers staring at multiple competitive offers.
2. Find your own listing
Inventory is so low that if you find a neighborhood you love, you might not ever get in unless you start knocking on doors.
That’s exactly what a buyer client of Red Oak Realty agent Terri White’s did last year after scouring the market for several months from El Cerrito to Oakland. The couple fell in love with a neighborhood on the Kensington/Berkeley border and one day decided to just start knocking on doors.
It took about a dozen knocks, but they found someone willing to sell. They bought the home for $870,000 last fall.
This tactic can work, because some homeowners don’t want the hassle of preparing their homes for sale even if they’re amenable to selling, White said. This proactive move short-circuits that process.
3. Show some love
Many sellers have a strong emotional tie to their homes, having raised families and built profound memories in them.
While money is king, buyers in competitive offer situations can gain a little extra edge by writing letters to the sellers describing how much they’ll love living in the house, and specifics about who they are and why they want to live in that house.
All it takes is one detail to resonate with a seller who has multiple competitive offers.
4. Start thinking of Berkeley as anywhere between Richmond Annex and San Leandro
Inventory is so low that successful buyers aren’t just honing in on specific neighborhoods as they have in the past. Instead, they’re scouring the whole East Bay for homes that meet their prices and other needs, White said.
The typical Berkeley-focused buyer who expands their range does so from Richmond Annex to the north and Oakland to the south, White said.
5. Convince sellers you’re a neighborhood fit
Some sellers care deeply about who buys their home. Whether they want the new buyer to be a good neighbor for their block, raise a family or, as one of Ankrum’s buyers last year agreed to do, continue caring for a brood of neighborhood cats that the seller had nurtured.
That buyer won the home.
6. Know you’re not going to get a deal
Sellers are king in this market, and they know it. Buyers should be willing to pay their top dollar for a house they want. “This should be your offer coming out the gate,” White said.
Sellers don’t negotiate, there’s no second chance, she added.
7. Have your agent get personal
Red Oak Realty agent Heidi Long had buyers who wrote an offer on a Westbrae duplex last year.
Long asked to present the offer in person, because she knows that meeting with the listing agent in person can help sometimes: it gives her a chance to pitch her client’s story and also to show that she’s a competent, professional agent and will be a good partner on the other side of the transaction.
She and the listing agent met at Elevation 66 Brewing in El Cerrito, declined the drink and presented her client’s offer. She described the young buyers who wanted the home and how they would use the duplex to host their parents from Asia periodically.
Her buyers won the $950,000 home. The listing agent told Long that her buyers were among a few with competing offers and that her in-person visit swayed the deal in their favor.
8. Get creative in the offer
Consider a “relative offer,” an offer that states you will go X dollars over any competing offer. Typically, these are capped at a certain amount.
While an appealing idea in competitive markets, these offers can be a tricky strategy to do well. In instances where buyers reveal their cap to sellers, sellers have an incentive to counter their offer at a price that matches or approaches it, with or without competing offers that are in the ballpark.
9. Love, lose, move on and keep your eyes on the prize
The most relentless buyers win, White said.
Those who are able to quickly wipe away the pangs of losing a home they fell in love with and get right back on the house-hunting horse, are the ones that find their home in the quickest, smoothest way.
To read four additional successful Berkeley buyer strategies, visit the related post on Red Oak’s blog, where you can also learn more about the Berkeley real-estate market.
Home Truths is written and sponsored by Red Oak Realty, one of the largest independent real estate brokers in the East Bay, serving the community since 1976. Read more in this series. If you are interested in learning more about the local real estate market, or are considering buying or selling a home, contact Red Oak at email@example.com, tel: 510-250 8780.