San Jose Real Estate * REALTOR ® * Richard Gonzalez

The very first question most home-buyers ask is “How much do I have to earn to buy a home in Santa Clara County?”. The answer may be found in the California Association of REALTORS 2009 Fourth Quarter Housing Affordability Index report.

• 52% of Santa Clara County residents currently qualify based on current housing prices and personal incomes.
• The Chart below shows that you have to bring home a combined total of $85,200 in order to make an average payment of $2,840(taxes and insurance included).
• Based on this criteria you should be able to purchase a home on an average sales price of $497,250.

There are more affordable homes in Santa Clara County and as such you can qualify for less. Consult your banks loan officer or mortgage broker to pre-qualify yourself.

Click here to read C.A.R.’s full report

I’m writing this post for those buyers who are looking to purchase a home under $300,000 in San Jose.  Affordable homes in this price range have not been seen since the late 90′s creating a flurry of potential real estate buyers in the San Jose area.

The shock for most buyers comes generally after making an offer for the 10th time only to hear the same answer “Sorry but your offer wasn’t accepted”. The challenge is that most buyers in this price range are competing with a larger pool of potential homeowners.

Investors are also taking advantage of the affordability and have no problem making all cash offers at this price range.

How do I compete in a hot price range?

I have compiled a short list of considerations when purchasing in this price rage. My goal is to help those buyers understand what we are experiencing and as such help you create a strategy to find your home.

The following list is in no particular order but should be considered if you are looking to buy under $300,000 in San Jose.

1. Low Ball Offers – Never try to low ball an offer in this price rage. Time and time again I have seen some of the ugliest homes end up with several offers. Remember that at this price range even the worst home can generate great returns as a rental.
2. Highest and Best – The fact that you may have cash is nice but your offers will be rejected every time if your competition is offering more. The bank selling the home is  interested in selling the home for the highest price a buyer is willing to pay.
3. Proof of Funds to Close – Anyone can make an offer, The key ingredient in making an offer is to convince the seller that you have the financial means to perform.
4. Approval Letter – I see more and more requests from listing agents looking for a pre-approval from a preferred lender. Having an approval in your hand may not be enough, in some cases you will be asked to submit your information to a preferred loan officer. You must be willing to do this quickly otherwise is will significantly reduce your chances of having your offer accepted.
5. Price Range – Look for homes in a price range that gives you the ability to offer over the asking price. Suppose you are approved for $300,000, my suggestion is that you look for homes under $250,000 giving you the ability to offer over the asking price. Many buyers are making the mistake of looking for a home at the maximum approved price. The competition will always offer more and it will make it extremely difficult if others are bidding above your approved price range.

REALTORS understand that the current real estate market is a moving target and implementing new strategies for submitting offers are  just as important.  Buyers who are willing to roll with the punches will eventually find a home. Are you willing to make the necessary adjustments?