One great thing about the San Diego real estate market today is that there really are opportunities for everyone. And when I say “opportunities” I’m not just talking about home buyers and investors who are taking advantage of distressed sellers in foreclosure or short-sale situations. Rather, I’m talking about win-win opportunities for home buyers AND sellers. I’d like to share an example from a recent La Jolla real estate transaction that just closed escrow last week.
The seller of this La Jolla beach house was taking advantage of an incredible opportunity to trade up into a larger home. They had purchased the previous home in 2005 and used it as a vacation home. During the past five years they fell in love with the Village of La Jolla and decided to make it their primary residence. They recently purchased a lot at a great price and in an excellent location near the beach in La Jolla. The price of the lot was about a half-million dollars lower than the market value several years before their purchase. It was a steal. So they bought it, and now they have approved plans to build their dream home. The only thing holding them back was the sale of their previous home.
Next, a successful business person who happened to be looking for a vacation home in San Diego was referred to me by a friend. This person was looking for a great deal on a house near the beach in San Diego. Location was not so important, and the initial inquiry was regarding small beach condos in North County San Diego. This client used my website to search homes for sale in San Diego, and identified a handful of condos that might work. We scheduled a time to tour those properties. But, quite frankly, the condos did not live up to expectations considering the million-dollar price tags.
As any good Realtor will do, I made a suggestion. “Let’s go take a look at this beach house in La Jolla.” My client was surprised, and said “I really don’t think I can afford to buy a house in La Jolla.” My advice was, “Well, let’s go take a look anyway. You never know. Maybe the list price isn’t set in stone.”
Sure enough, when my client saw the La Jolla beach house it was exactly what we’d been looking for. Very warm and inviting, with plenty of room for guests, spacious and relaxing outside living space, and within an easy stroll to the beach AND to the exciting activities, shops, and restaurants in the Village of La Jolla. But the asking price was at least $150,000 above my client’s price range. My advice: “Let’s write and offer and I’ll take it to the Seller to see what we can work out.”
We wrote the offer and I presented it to the seller. The seller had definitely been hoping for a higher offer. But, they replied, this is plenty high enough to allow us to cash out and build our dream home. They figured they had made around a half million dollars from their purchase of the lot for their new dream home. They could not build the home without selling this one. So they decided that rather than be greedy and hold out for a half-million dollar gain and risk losing their opportunity to build, they could definitely live with a $350,000 gain, and pass along another great deal to the buyer. So… they accepted the offer!
The moral of this story is that win-win opportunities do exist in today’s San Diego real estate market. The opportunities are lost by those who sit and do nothing, frozen by fear of the shift in the market. But others take action and are making great investment decisions. As a luxury homes agent in San Diego I’m glad to put together qualified home buyers with property sellers. It takes market knowledge and experience to identify them, but win-win transactions to exist and they leave everyone feeling happy and satisfied. It’s a very good thing!