Inexperienced and even some seasoned buyers have anxiously asked "How long does it actually take to buy a house?". In truth there is no perfectly right answer. Being that everyone (both on the agent and client side) is different, the experience varies. Funny enough it is not always people's buying power or pre-approval amount either. Different responsibilities come in to play when making a purchase and everything doesn't necessarily fall on the realtor. Buyers are encouraged to be as involved as possible to ensure they get what they want. And that doesn't mean taking over as the realtor buyer and bombarding your realtor with Zillow Zestimates and Trulia  homes either.

Be Prepared to Buy

As an interested buyer, if you don't already know that getting pre-approved by a lender is one of the first things you must do, even just to write an offer to purchase in most cases, you do now. But that is not all if you really want to be prepared. To have a few extra bases covered consider:

A few months to at least a year prior to getting pre-qualified start taking steps to raise your credit score. There are a number of things one can do to strengthen their credit score in a short amount of time. I won't go into much detail in this post but to name a few; make sure you have checking and savings accounts with average daily balances and not $0.00 routinely; if you don't have any, get a credit card or two being sure to continuously pay down your balance to 30% at most of your max credit limit each month; start a department store credit line at Macy's or a like store and keep the credit balance at most 30% of the max, DO NOT GO OVER 30 DAYS WITHOUT PAYING ANY CREDITOR INVOICE.

Start a savings plan in which you are putting extra money aside to assist in your buying expenses such as down payment, inspections, closing costs, appraisal, title and escrow fees etc. It's not cheap buying a house and the more money the better. When you start your savings plan don't be frugal. Without a down payment assistance program you normally need to have at least 3% of the purchase price, and that is only the down payment.

Figure out a good schedule with your realtor to routinely go and look at homes.

Go and Look!

Aside from paperwork and qualification, a buyer needs to realize the emphasis that needs to be put on the basics, which include footwork and actually going to look at homes. We are all very busy and that is to be understood from all angles. But when it comes to the decision to buy a home in today's extremely HOT market one needs to realize that regardless of how busy people are, the smart ones go after one of their most prized possessions aggressively. If you don't go and see homes then you won't get a home (unless you are an absentee investor buyer or have some other situation going on). This means that whenever your schedule permits and your realtor has shared homes that interest you, you should go and check them out. If you are working nights go during the day and vice versa or even try going at lunch. Now in many cases offers will not be accepted until a specified date. If this is the case then fine, you have an excuse. Otherwise do not hesitate to get out there. These days homes go fast, and sometimes even sell below a price that you would have offered.

Thoroughly Study Your CMA and the SOLD Trends in the Area Before Determining Your Offer Price

I know it sounds elementary but I've noticed where a thorough market evaluation isn't being done prior to submitting offers for many buyers. It has become common practice to write offers over asking price in the Bay Area market and people have been under bidding for high priced fixer uppers for as long as I've known. However, research of the present market is still pertinent to coming up with the best and most competitive offer price. Our market is definitely very tricky right now, especially in the East Bay as sold prices are going well above the appraised value in many instances. With just that in mind buyers do not want to bite off more than they can chew and should have knowledge via their Comparative Market Analysis and any other reports that may be provided, of what has recently sold and what can likely be expected when the appraisal comes back. Good realtors should be able to guide buyers and decipher between a situation where there was a buyer with deep pockets on a SOLD home that was able to afford to make up the difference in appraised value and offer amount or not. Definitely do your homework as time is precious. 

Not much in decent areas is being sold for less than $400,000. And anything above $417,000 would be considered a jumbo loan which is a little more strict on terms and for some harder to qualify for. This means that many people buying these homes are getting loans for up to $417k and financing the rest with their own cash reserves or other assets. The harsh creeping reality of our market, at least in the East Bay, now is that you MUST have some considerable extra cash to put down or else you are almost certain to be outbid. The good thing is that the new wave of buyers in our market more and more have higher incomes. The bad thing is current long-time residents are being displaced.

"We didn't get it", "We were out bid", "The sellers accepted another offer".  If you are on the buyers side of a transaction in Northern California's Bay Area then you have likely had to tell your buyer one of the prior responses after submitting your clients' highest and best offer.  The market in this area is so on fire that some homes are going for more than $200k over asking price in some areas. A little longer ago than recently, these areas have been less desirable. The temptation to sell, to some homeowners is getting the best of them as they feel that they can get a marginal return on what they invested in their homes many years back and move to a location where there is a less expensive cost of living, and buy a home that they can retire in. The truth is they are actually right in many cases.

But what about the popular discussion of gentrification which is affecting so many across the U.S.?  It all seems to go hand in hand from the looks of things in the bay area. San Francisco is so expensive that even well paid renters and some homeowners (due to taxes and other expense hikes) have to move out to locations with longer commutes to work. Many of those people are moving to Oakland, which now, is not as less expensive as it used to be than San Fran, but definitely still less. What is this doing? Well, now many of those displaced due to rent hikes in Oakland and the surrounding cities are moving to those locations discussed earlier, where some were hoping to move to in hopes of retiring. Rent is very high and those diamonds in the rough in nice pockets in the further cities are being found. People have been forced to settle for and adjust to the nicer place but longer commute and like situations. The reality (not on a biased or racial level) is that some of those locations are now overridden by the displaced, which unfortunately in many cases isn't the crowd that those mentioned earlier (homeowners looking to get the marginal return and move) want to retire around due to increased criminal and other undesirable activity on the rise.

Now don't get me wrong, there are many retirement communities for those in there mid 50's and up where people can move to such as Dale Webb, Rossmoor etc. But one used to consider places such as Antioch, Brentwood (a little more pricey), Mountain House, Tracy and even Stockton etc. While good neighborhoods anywhere can get expensive, now that all of this is happening the alternatives to the pricier neighborhoods in those further cities are less and less desirable. This makes the gentrification discussion a lot more heated now, because many people aren't as willing to move out to those areas anymore. What is that effect? HOLDOVER TENANTS. There are so many properties for sale on the MLS with holdover tenants it's ridiculous! Oakland has rent control laws but rent is still too expensive for many. I personally just went through a situation with a holdover tenant that almost got out of control. What is unfortunate is that the tenant, a sweet young single mother with a serious medical condition requiring her to get several procedures done in southern California, had absolutely nowhere to go. And she wasn't in a situation to even move to one of the less desirable neighborhoods in the further cities due to her job. It was a sad situation for a while but luckily she was able to almost miraculously find something.

With the discussions above taken into consideration how does all of this effect one buying a home in the Bay Area? To keep it simple, it's not as easy as it used to be to get the victorious email/call saying that your clients' offer was accepted. So how does one score without being able to pay huge amounts over asking price? Though I still have buyers that I have been working with for a while that are yet to get an accepted offer, I have found that there are loopholes for the less picky buyer in this market. The even less desirable areas are now more desirable in the East Bay area and neighborhoods are changing considerably. It may be a good time to purchase a fixer in a pre-up and coming neighborhood. I can remember growing up in Oakland when the 20's avenues (20th Ave. through 29th Ave.) between MacArthur and E. 14th (now International) used to be areas that you may not want to take an evening stroll. Now days this area is extremely sought after with 2 bedroom/1 bathroom homes going for over $550k! Or how about West Oakland where those old victorian homes are now selling close to $900k! Creative sellers are dividing the likes of those large 4 bedroom 2 bathroom homes into two 2 bedroom 1 bathroom condos. Yes, even with all of the homeless, drug trafficking, and undesirable behavior. Slowly but surely Oakland and the surrounding east bay cities are turning into baby San Francisco's with less and less affordability when it comes to housing. All of this to say that the "up and coming" bug is moving to areas no one expected. It may make sense to strategically map out a good pre-up and coming area before everyone else does, and purchase a home with a holdover tenant (could be risky and/or costly, but cheaper and less desirable to everyone else), a fixer, non-staged, just an old home that needs upgrades or even a home in a pre-up and coming area with none of these issues. Sooner or later the shift will be to these neighborhoods. It's normally not the best idea to get into a holdover tenant situation as it can possibly be very complicated. However I have seen buyers come out on top with the right direction and a knowledgeable realtor. 203k or fixer and/or hard money loans are also still available and may be just what a buyer needs. After all, these are homes worth hundreds of thousands of dollars. If things don't work out, with all of the housing price hikes in the Bay Area one can always sell or rent, though easier said than done. The good thing is rented property benefits the owner when qualifying for a new home (75% of the rent in the area of their home is counted towards the owners income if the property is rented). So if the scenario of things not working out was to take place at least there are still options.

With our evolving market in the bay area realtors, buyers, investors etc. must also evolve and embrace the challenge to be more successful. Thinking outside of the box goes without saying. Investing in real estate has always been in a cyclical market. Let's try to stay on top of the curve.