What happened is that the inventory levels are now so low that virtually every agent who lists property finds himself with multiple offers on hand, and his seller selects the best one. This situation actually started to occur sometime in the late winter/early spring of 2009, long before the media began to report it. Those of us in the business found that the agents who had bank-owned property were treating everything as a “silent auction;” the offers would be made, and then later on the successful bidder would hear that his offer was accepted, with all the conditions the bank saw fit to place on the transaction. Shortly thereafter, the cash buyers came out of the woodwork, and then after that, the cash offers began competing with each other. So what’s a homebuyer to do?  Here are some strategies you can use to make sure that your offer gets a good hard first look:

1. BE SURE you are preapproved with a lender that actually checks out your income and your credit, and provides the seller with evidence that he’s done that. This doesn’t need to be a bank–there are many reputable mortgage brokers in the lending business, but do use someone who understands the current environment.

2. BE ABLE to prove that you have the funds to close your transaction whether it’s cash or not. You need to have the closing funds available to you when you make the offer (talk with your lender or Realtor about the exact amount you will need.

3. Make your offers with as few contingencies as possible; folks are now offering on property with no contingencies, close in 10 days (if they have cash). For a bank that’s lost $200,000 in the foreclosure and holding process, that’s “music they want to hear.”

4. Use a reputable, experienced agent. There are lots of us around. Pick someone who is compatible with your interests and needs, and pick someone who is aware of the process (it may take them 10 or more offers to get to “accepted” for you).

5. Be patient. It can take time right now. Inventories are low, offers are many, and buyers don’t understand that the market shifted into a seller’s market as of about February 2009.

6. Expect (at least for now) to offer more than the asking price. Nearly every offer made in the San Diego area is currently over asking price if it’s successful, and sometimes the offers are high enough to seem silly in the current climate.

7. Get out there with your agent and do something. This is not the time to wait for the market to “go down.” We are in recovery. Will it last? We don’t know–but we do know that prices now are still better (when affordability is considered) than at any time since the 1970′s. Don’t let today’s opportunity slip by as you hope for a better deal in the future. You will probably be sorry.