Home buying/selling in a competitive market

[MDmomof2]

We were in a similar situation in the spring/summer of 2018. Very similar! We opted to make a non-contingent offer on a home even though it made me VERY nervous. If our home had not sold we would have needed a bridge loan to make the financing work. We have strong credit scores and good income, but not a lot of cash at the time - we really needed the equity in our home. We listed on a Thursday, hosted an Open House that weekend, and our realtor put an offer deadline on our home by Monday at 5 pm. We had 6 offers and were able to pick the one that had a good price but also solid financing and flexible closing. Ultimately, it all worked out. If you truly have a hot selling market I would bet your situation will work out too. It's a leap and it's nerve-wracking, but if you can set up some alternate financing you will feel better about making an offer before your house is on the market.

[ESF]

Is there an option to do a rent back? We closed at the end of October, the owners rented it back from us in November, and we moved in December. It was great to have the extra time on our end.

When friend of mine sold her house in connection with an international move, it was under a 4 month rent back. What they did was talk to the realtor to figure out a plan for listing later in the year. In the meantime, the realtor kept it in her back pocket without listing, but just spread the word through realtor friends. Word went through the grapevine, and somemone bit.

[onomatopoeia]

Jan 19, 2021 10:27:33 GMT -5 steamboat185 said:

We took a 401k loan when we bought. It’s not the best idea but we it only had a 100 dollar fee and we paid the money back as soon as our house sold. For us I think the money was out for about 30 days. If yours sells fast it could be out for less time. We knew DH’s job was safe and it kept us from having to add anything else into the contract.

This is what we did.  We found a house we liked and put in an offer in with no contingency on selling ours.  We did ask for an extended closing date, which the sellers agreed to, so that gave us some breathing room.  We immediately listed our house and it sold very quickly, and we closed on both homes on the same day.  It was nerve wracking but it all worked out.  We were upgrading to a bigger house in the same (small) town and inventory at our price point was very limited, so we didn't want to list ours then not actually be able to find a new house to move to.  

I have friends who have listed their house with the contingency of finding suitable new housing, but I don't think that's as common and might make it harder to sell. 

[boiler717]

I would take the idea of a contingent market off the table in a hot market.
I would either do a HELOC or 401k loan to make up the difference if it meant a dream home — we could have done a HELOC but it had to be taken out before our house was on the market, and we had already listed ours. I would definitely talk to your mortgage lender ahead of time for ideas.
We found the house we wanted, put in a contingent offer that they rejected. We ended up getting ours on the market and under contract before they accepted another offer and were able to make a non-contingent offer.
In a weird turn of events, we ended up selling for way more than we thought and our house had major inspection issues. We walked away and were going to do a double move but ended up finding a house at the last minute that we loved. Stressful for sure.
Good luck!

[rubytue]

Jan 19, 2021 8:10:51 GMT -5 k3am said:

Our market here is crazy and was absurd when we sold and bought. We knew our house would sell quickly and tried putting some non-contingent offers on houses while we were getting ready to list that our agent had previously told us wouldn’t be considered and he was.. right. It was such a sellers market that even if we were the highest bidder, just knowing that we had to sell our house, even though it wasn’t a contingency for our purchase offer and we had non-contingent financing lined up was enough to make sellers pass on our offer (many times).

Ugh. We are in a similar situation. We do not need to sell first. And have made 3 non-contingent offers. All rejected. And two have closed lower than our offer. I didn’t even think that the fact we currently own would affect things, since it’s not contingent. *sigh*  I do not understand why that should even matter. 

To the OP question... our strategy is to buy, move, sell. We’ve done it before (with a tenant between move and sell) with no issues. It didn’t even occur to me until right now that this would be a problem.

[magma]

Jan 30, 2021 16:35:38 GMT -5 rubytue said:

Jan 19, 2021 8:10:51 GMT -5 k3am said:

Our market here is crazy and was absurd when we sold and bought. We knew our house would sell quickly and tried putting some non-contingent offers on houses while we were getting ready to list that our agent had previously told us wouldn’t be considered and he was.. right. It was such a sellers market that even if we were the highest bidder, just knowing that we had to sell our house, even though it wasn’t a contingency for our purchase offer and we had non-contingent financing lined up was enough to make sellers pass on our offer (many times).

Ugh. We are in a similar situation. We do not need to sell first. And have made 3 non-contingent offers. All rejected. And two have closed lower than our offer. I didn’t even think that the fact we currently own would affect things, since it’s not contingent. *sigh*  I do not understand why that should even matter. 

To the OP question... our strategy is to buy, move, sell. We’ve done it before (with a tenant between move and sell) with no issues. It didn’t even occur to me until right now that this would be a problem.

We are in the same boat (although haven’t tested the waters yet, this is all on paper). Super competitive sellers’ market. We can make an all cash offer (parent will advance money to us.) Then we’d move, then we’d sell our current home and pay back parent.

So maybe this is a rhetorical question, but yes WHY would this be a ding against us in a competitive offer situation? How would the seller even know we have to sell our home, frankly, if we put in an all cash offer with no contingencies?

Again maybe preaching to the choir but I don’t get it. Thx for any real world insight.

[boiler717]

Jan 31, 2021 15:57:02 GMT -5 magma said:

Jan 30, 2021 16:35:38 GMT -5 rubytue said:

Ugh. We are in a similar situation. We do not need to sell first. And have made 3 non-contingent offers. All rejected. And two have closed lower than our offer. I didn’t even think that the fact we currently own would affect things, since it’s not contingent. *sigh*  I do not understand why that should even matter. 

To the OP question... our strategy is to buy, move, sell. We’ve done it before (with a tenant between move and sell) with no issues. It didn’t even occur to me until right now that this would be a problem.

We are in the same boat (although haven’t tested the waters yet, this is all on paper). Super competitive sellers’ market. We can make an all cash offer (parent will advance money to us.) Then we’d move, then we’d sell our current home and pay back parent.

So maybe this is a rhetorical question, but yes WHY would this be a ding against us in a competitive offer situation? How would the seller even know we have to sell our home, frankly, if we put in an all cash offer with no contingencies?

Again maybe preaching to the choir but I don’t get it. Thx for any real world insight.

Your address will be on the offer and they can look it up and see if it’s for sale. Or they will ask your realtor about your current living situation and wonder why you aren’t selling. We were in a multiple offer situation and our realtor called all the banks to get more details about their financing situation (DTI ratio, cash on hand, etc).

[magma]

Jan 31, 2021 17:14:50 GMT -5 boiler717 said:

Jan 31, 2021 15:57:02 GMT -5 magma said:

We are in the same boat (although haven’t tested the waters yet, this is all on paper). Super competitive sellers’ market. We can make an all cash offer (parent will advance money to us.) Then we’d move, then we’d sell our current home and pay back parent.

So maybe this is a rhetorical question, but yes WHY would this be a ding against us in a competitive offer situation? How would the seller even know we have to sell our home, frankly, if we put in an all cash offer with no contingencies?

Again maybe preaching to the choir but I don’t get it. Thx for any real world insight.

Your address will be on the offer and they can look it up and see if it’s for sale. Or they will ask your realtor about your current living situation and wonder why you aren’t selling. We were in a multiple offer situation and our realtor called all the banks to get more details about their financing situation (DTI ratio, cash on hand, etc).

Even if we have all of the cash for the purchase sitting in the bank?

[mccallister84]

Jan 31, 2021 21:08:15 GMT -5 magma said:

Jan 31, 2021 17:14:50 GMT -5 boiler717 said:

Your address will be on the offer and they can look it up and see if it’s for sale. Or they will ask your realtor about your current living situation and wonder why you aren’t selling. We were in a multiple offer situation and our realtor called all the banks to get more details about their financing situation (DTI ratio, cash on hand, etc).

Even if we have all of the cash for the purchase sitting in the bank?

I think an all cash offer is a completely different ball game.

[carrotsmakemefat]

I’ve been looking since April and glad I found this post. My advice :

-find the house you want to buy first - get offer accepted
-list your house right after. Have it ready to go !
-take a weekend away from the home so they can do showings etc.

As a BUYER I hate this. I’m now looking 10-20 miles outside my ideal area because I can’t afford Fairfax County anymore. Yet I know we need to get into the market. We may end up with a 5 year solution and try to rent it after. I don’t know yet honestly.

All I know is I need to be moved before this baby is born and my lease is up. We literally have to move by May. All is see are prices going UP UP UP. The supply and demand issue isn’t helping or going to change anytime soon. And if the 15k first time homeowner tax credit gets approved I expect this to get worse

[carrotsmakemefat]

Jan 31, 2021 21:08:15 GMT -5 magma said:

Jan 31, 2021 17:14:50 GMT -5 boiler717 said:

Your address will be on the offer and they can look it up and see if it’s for sale. Or they will ask your realtor about your current living situation and wonder why you aren’t selling. We were in a multiple offer situation and our realtor called all the banks to get more details about their financing situation (DTI ratio, cash on hand, etc).

Even if we have all of the cash for the purchase sitting in the bank?

Cash will always win a bid. I’d say half our offers have been outbid or declined because of all cash

[boiler717]

Jan 31, 2021 21:08:15 GMT -5 magma said:

Jan 31, 2021 17:14:50 GMT -5 boiler717 said:

Your address will be on the offer and they can look it up and see if it’s for sale. Or they will ask your realtor about your current living situation and wonder why you aren’t selling. We were in a multiple offer situation and our realtor called all the banks to get more details about their financing situation (DTI ratio, cash on hand, etc).

Even if we have all of the cash for the purchase sitting in the bank?

If there are multiple all cash offers, I’m sure the buyer will want to investigate more to differentiate is my point.

[carrotsmakemefat]

How are you hanging in rubytue

[mccallister84]

Feb 15, 2021 20:51:17 GMT -5 mofongo said:

I’m trying to understand why a non contingent offer from someone who owns another house makes a difference? As long as you have the pre-approval? Someone make this make sense to me. Lol

I just think that when people are getting multiple over asking offers they go for the one that is the simplest. So if their realtor tells them person A currently owns a house (even if they have been pre-approved and the offer is non contingent) and person B doesn’t if the terms are the same they are more likely to take person B - assuming that they will have an easier time securing financing.

[k3am]

Feb 15, 2021 20:51:17 GMT -5 mofongo said:

I’m trying to understand why a non contingent offer from someone who owns another house makes a difference? As long as you have the pre-approval? Someone make this make sense to me. Lol

Because sales still fall through, even if the offer was non-contingent. The sale isn't final until the wire has been received. At worst, the buyer loses their earnest money, typically, because it's not worth it for the seller to pursue other remedies. Our realtor explained this as non-documented contingency or something like that. 

So if a seller knows that there's a potential (however remote) that one bidder has to do XYZ to make the transaction a surefire success, and another one has all their ducks in a row, they'll take the one with less risk. We had so many offers on our house, we could afford to be picky. And there were over 20 offers made on the house we bought, so they could also afford to be picky. In a market where multiple offers isn't so common, it may not be as big of an issue (or even an issue at all!) 

[carrotsmakemefat]

WTOP said home sales in Northern VA are up 29% 😳

Yet in Maryland 1 in 10 homeowners are more than 6 months late on their mortgage.

[sakoro]

Feb 16, 2021 20:01:56 GMT -5 carrotsmakemefat said:

WTOP said home sales in Northern VA are up 29% 😳

Yet in Maryland 1 in 10 homeowners are more than 6 months late on their mortgage.

What happens when the foreclosure halt expires in June? Will people be motivated to put their houses on the market and turn it into a buyer’s market?

[seeyalater52]

Feb 17, 2021 0:18:22 GMT -5 sakoro said:

Feb 16, 2021 20:01:56 GMT -5 carrotsmakemefat said:

WTOP said home sales in Northern VA are up 29% 😳

Yet in Maryland 1 in 10 homeowners are more than 6 months late on their mortgage.

What happens when the foreclosure halt expires in June? Will people be motivated to put their houses on the market and turn it into a buyer’s market?

I’m doubtful it will actually expire in June. I expect it will be extended at least through the fall, possibly end of calendar year.

[Poppy]

Jan 31, 2021 17:14:50 GMT -5 boiler717 said:

We were in a multiple offer situation and our realtor called all the banks to get more details about their financing situation (DTI ratio, cash on hand, etc).

Wait, whaaaaat? I had no idea that a bank we (hypothetically) planned to get a loan from would share this information with a third party. That's disturbing.