RE: Buying in a hot market.

[Pom]

We are on our 3rd offer since August. Buying a larger and also waterfront home. It will be our live in it until we can't functionally be there any longer, home. The market here has been nutso but we are headed toward winter in the north so it might help us some. However, it is a very popular resort area. We did an offer with an escalation clause for a home that is part of an estate. It needs a garage since we would be year round, kitchen reno and 2.5 bath redos as well.

I feel like we went aggressive (all cash) and then hedged with escalation against better offers. Hoping to know something tomorrow, but no promises. We missed a neighboring house that we loved, but would have needed a mortgage and missed that opportunity. Womp. 


Tell me about your recent successes (or fails) in the recent killer sellers' market.
 

[goldengirlz]

We’re currently looking too, but we’re not forced to buy so we’re kind of taking a wait and see approach. There have been only two houses we were interested in over the past few months; both were complete gut renos (one was probably a tear-down) and both sold well over our budget — it wasn’t even close.

We also bought in a hot market five years ago (we’re in a perennially hot market here.) We got our current house because our Realtor knew the seller’s Realtor and she told us what the highest bid was and we topped it. I’m pretty convinced that’s the only way deals get done in hot markets. You either need to be very rich or have an in, or both.

[Pom]

Sept 26, 2021 19:10:55 GMT -5 goldengirlz said:

We’re currently looking too, but we’re not forced to buy so we’re kind of taking a wait and see approach. There have been only two houses we were interested in over the past few months; both were complete gut renos (one was probably a tear-down) and both sold well over our budget — it wasn’t even close.

We also bought in a hot market five years ago (we’re in a perennially hot market here.) We got our current house because our Realtor knew the seller’s Realtor and she told us what the highest bid was and we topped it. I’m pretty convinced that’s the only way deals get done in hot markets. You either need to be very rich or have an in, or both.

I think you are right on with that last sentence.

[sakoro]

I got approval to be permanently remote so I am moving from the SF Bay Area to San Diego. I’m staying with my folks while looking at for my first condo. The market is not quite as crazy as Bay Area but it’s still pretty competitive in the first time buyer category. I’m pleased to discover that it is feasible for someone making a decent salary but not uber-rich to buy (as long as you’re willing to live a bit inland).

Good luck goldengirlz — from what I hear it’s even more stratospherically expensive. Not for single women without trust funds/ cashed out stock options so reluctantly I had to move elsewhere.

[Susie]

oh man, good luck! 

We bought and sold this spring.  We got the first house we offered on, which I'm still amazed by.  Last time we also bought in a hot market and it took us 8 tries.  We couldn't do an all cash offer, but we came in clean, no contingencies, flexibility on closing date, etc.

With our sale, I know many of our bidders were not first time offerors, which made it hard to pick.  Who do you thrill and who do you disappoint?  The offers were all in a pretty tight range.  We had 3 offers for the same top amount. The buyers we went with, had lost on our neighbor's house the week before, so they came in strong.  We only moved 3 miles away, but I've made a point not to drive by.

As a seller I kind of hated escalation clauses, so when we did best & final we said no escalation clauses.  Any time you have >2 escalation clauses it gets so messy.

[awkwardpenguin]

We bought and sold in a hot market in 2019, and not to scare you, but we made a lot of rookie mistakes and took over a year to actually buy a home. We were way too hesitant because in our mind the price range was already bananas and it was hard to be like "fuck it, $50k more won't kill us".

You're already doing it more right than we were! All cash and bidding as high as your willing to go via escalation is about as aggressive as you can possibly get. We did something similar (not all cash though) when we finally got our current house. And even then we were the seller's second choice and got it when something came up on inspection. The main thing is that nothing is guaranteed and you have to just cross your fingers and hope for the best. Good luck!

[waverly]

We were causally looking for a vacation property. Dh looked at a lot, but in our price range they were mostly dumps or on flood plains. We did look at one together, but it didn't feel right, and it was still such a far drive. We decided to not look anymore and wait.

[Pom]

Sept 27, 2021 12:29:22 GMT -5 waverly said:

We were causally looking for a vacation property. Dh looked at a lot, but in our price range they were mostly dumps or on flood plains. We did look at one together, but it didn't feel right, and it was still such a far drive. We decided to not look anymore and wait.

I get that. We are in the price point here. LOL

We have a cottage to live in but its really small. Luckily we renovated last year but I repeat SMALL. We can wait it out, but we want to keep a boat at our home. So, we keep at it. I feel unsure if waterfront properties will ever drop in the market like past dips.  

[purplepenguin7]

We just went under contract on a SFH in the NYC NJ suburbs (like, literally days ago). We got in minimally under asking after the property had been on the market for 10 weeks and had the price dropped three times. Part of me wonders why no one else was interested in the house or if there is something glaringly wrong that we didn't notice. But, I've been looking for a long long time and the market is noticeably cooling. Before this house we had put in two other offers, one we didn't get, one we pulled ourselves after really poor advice from our (now former) realtor. Most houses we looked at seemed only get 1-2 offers from the feedback we heard from our realtor, not something like 5+ or a massive bidding war. Looking at recently sold homes in our area, most went for asking and some even under. Anything that went over, was 2-5% over (about 10-20k) so again doesn't seem like there have been massive bidding wars.

I'm still waiting to see how much the one we lost went for. We offered 15k (3%) above asking and lost. This was about 2 months ago.

Pom, any update on your offer?

[waverly]

Sept 27, 2021 12:57:02 GMT -5 Pom said:

Sept 27, 2021 12:29:22 GMT -5 waverly said:

We were causally looking for a vacation property. Dh looked at a lot, but in our price range they were mostly dumps or on flood plains. We did look at one together, but it didn't feel right, and it was still such a far drive. We decided to not look anymore and wait.

I get that. We are in the price point here. LOL

We have a cottage to live in but its really small. Luckily we renovated last year but I repeat SMALL. We can wait it out, but we want to keep a boat at our home. So, we keep at it. I feel unsure if waterfront properties will ever drop in the market like past dips.  

I’m not even waiting for it to dip but more not to have the market so hot that offers have to be in 2 days later and with escalation clauses. Maybe it’s weird reasoning but I just don’t feel like paying equivalent or more than my primary home for a secondary home and our reasons are not super ironed out for having a vacation home.

[Pom]

Sept 27, 2021 13:58:26 GMT -5 purplepenguin7 said:

We just went under contract on a SFH in the NYC NJ suburbs (like, literally days ago). We got in minimally under asking after the property had been on the market for 10 weeks and had the price dropped three times. Part of me wonders why no one else was interested in the house or if there is something glaringly wrong that we didn't notice. But, I've been looking for a long long time and the market is noticeably cooling. Before this house we had put in two other offers, one we didn't get, one we pulled ourselves after really poor advice from our (now former) realtor. Most houses we looked at seemed only get 1-2 offers from the feedback we heard from our realtor, not something like 5+ or a massive bidding war. Looking at recently sold homes in our area, most went for asking and some even under. Anything that went over, was 2-5% over (about 10-20k) so again doesn't seem like there have been massive bidding wars.

I'm still waiting to see how much the one we lost went for. We offered 15k (3%) above asking and lost. This was about 2 months ago.

Pom, any update on your offer?

Congratulations on your new home! No news yet. 4 offers was what our REA said as of late last night and all were presented this morning.

[plutosmoon]

Good luck to everyone looking, it's really tough as a buyer! I'm looking without much success yet. My market is hot, there is super low inventory (my city of 15k has ~12 active SFH listings) which is going to get slimmer with winter coming. Anything decent goes quick. I sold my old house in January, it sold on day one and walked away with a decent chunk of cash after splitting it with my ex.

A lot of NYC and Boston folks fled here during the pandemic, and my city was extremely affordable compared to the other areas of the county, so they came here instead of some of the more ritzy neighboring towns. It's a rural touristy area. Investors have been coming in with buckets of cash too. My city was already gentrifying, but this has accelerated it. Prices are up a lot and I've upped my budget. My realtor is good and assures me she will find me something, it's just a waiting game. I have a decent downpayment, a good budget and I can't even put an offer in since there are no SFHs for sale. I feel like a bit of a downer about the whole market to buy right now. It's certainly a different landscape than when I bought in 2007 and 2017/18.

[vmars]

We are currently waiting to close on our sale/purchase. For our sale we didn’t have to put it on the market. We had one couple come and got the amount we wanted. We are making almost as much as what we paid for this house 9 years ago. On the purchase end, we got our offer accepted on the first house we put an offer in on. We offered full price and contingent on the sale of our place. Everything has gone smoothly so far and the house we purchased over appraised. It needs some cosmetic work but it’s more than worth it. It’s a neighborhood we have wanted to buy in for the past 2 years. We are very excited!

[Pom]

We bought a new River house with deep water dockage! Inland waterway to inland lakes and rivers and Lake Huron & Straits of Mackinac and Lake Michigan. In shock sort of… 4 offers, and we won with our offer. $31k over asking but no escalation.

[mrsd2006]

Sept 28, 2021 13:15:41 GMT -5 Pom said:

We bought a new River house with deep water dockage! Inland waterway to inland lakes and rivers and Lake Huron & Straits of Mackinac and Lake Michigan. In shock sort of… 4 offers, and we won with our offer. $31k over asking but no escalation.

Congrats! Post a pic when you can! 

[cuadrado]

Attempting to buy:

House 1- seller accepted an offer 12% above ask with no contingencies before we could make an offer
House 2- @@ offered 10% above ask with $65k earnest, seller accepted another offer because they loved that the other family had kids and a family would grow old there (pretty sure this is illegal)
House 3- seller accepted an offer before our showing on Day 1
House 4 - we made an offer 10% above ask with 65k in earnest money - we got outbid by someone who offered all cash and they also waived due diligence

We feel really defeated and are not aggressively looking right now.

Selling:
We just listed our rental property for sale. Showings start on Friday but it hit the MLS as coming soon yesterday. I'm keeping my fingers crossed that we get multiple offers considering everything we've been through trying to buy something.

[scm1011]

Congrats, Pom!

We really lucked out buying & selling this summer:

Buying:
Offer 1: We bid $100k (9%) over asking. Sellers got 12+ offers and accepted one for $310k over asking.
Offer 2: We only bid $25k (2.5%) over asking and won. It was a few doors down from where we were living and they liked that we were a family they "knew" and would be raising our 2 kids there just like they did. We were not the high bidder.


Selling:
3 offers within 24 hours of listing, we accepted one that was 12% over asking before the open houses.  

[Pom]

Thanks all. We are still in shock I think. LOL We had zero expectation of getting this home. It needs love and some fixes but the lot is gorgeous and a terrific location.

cuadrado, I am so sorry you are frustrated. I hope you and everyone here home hunting finds something perfect for your families. It's definitely a stressful process with the current market. Ugh. And if you are selling, hopefully you'll get a nice price and buyer.

Now to get renovations done and a garage built. Our last contractor was a complete nightmare. Ugh.

[purplepenguin7]

Congrats Pom, it sounds wonderful! Good luck with the rennovations.

[Pom]

Our realtor told us last night, that she had two other house buyers with big bidding wars this week. 17 offers on one and one that went $100k over asking. I feel lucky. That is insane for up here.

[carrotsmakemefat]

We were successful after almost a year of looking. All that said, in the DC area things are still strong but slightly slowing. You are more likely to get a contingency added to the contract now.

[Pom]

We close in 17 days and we already have an offer to buy our house. Apparently, one of the bidders that lost, wants to know If we will close on the house and then sell it to them for $50k more than we paid.

We said no thanks.

[Susie]

Pom, omg! that is wild.

[scm1011]

Wow, Pom - I thought I had heard it all! That's bananas!

[Pom]

Oct 6, 2021 10:05:56 GMT -5 scm1011 said:

Wow, Pom - I thought I had heard it all! That's bananas!

Our realtor called late last night and said… “It’s nothing bad, but this is a situation I’ve never had before.” Apparently, they called the seller’s REA to have them contact us like 3x.

Us too. Lol

[magma]

Just piling on to whine that yet again we weren’t even able to make an offer before the house was snapped up. (Despite an agent, again, insisting they’d wait until offer date to accept an offer.) This house went for $300K (19%) over list, all cash, within 48 hrs of being put on the market. So yeah, it’s still rough out there. ☹️

[Pom]

Oct 9, 2021 21:20:16 GMT -5 magma said:

Just piling on to whine that yet again we weren’t even able to make an offer before the house was snapped up. (Despite an agent, again, insisting they’d wait until offer date to accept an offer.) This house went for $300K (19%) over list, all cash, within 48 hrs of being put on the market. So yeah, it’s still rough out there. ☹️

That feels really crappy.

[scout8]

Oct 5, 2021 21:18:58 GMT -5 Pom said:

We close in 17 days and we already have an offer to buy our house. Apparently, one of the bidders that lost, wants to know If we will close on the house and then sell it to them for $50k more than we paid.

We said no thanks.

Broker here. I once had something similar where a guy offered my buyers $20K to assign their contract over to him. It was not a hot market then so it was really weird. He had some old family connection to the house so I think that is why he wanted it, but we were speculating that maybe he knew about some treasure buried in the back yard.

[sakoro]

I just had my offer accepted on a condo in San Diego county after 2.5 months of searching. (I’m a single woman first time homebuyer.) The seller did a counteroffer with an $10k appraisal gap guarantee and a concurrent closing 30 days after my closing paperwork is finished. The seller doesn’t have their next house so needs extra time to search and place offers. I probably won’t be moving in until early February.

It’s crazy out there— can’t believe the appreciation in 1 year.

[childofhiphop]

I’m posting (late) because we are in a similar situation.

We relocated in November.

House 1 - offered $15k above asking and came in #2. Accepted offer was $60k over asking. When asked if we wanted to counter, we had to decline knowing the house had a foundation issue and a roof leak and not knowing the extent of the repairs that would be needed. Completely crazy.

House 2 - amazing property. But not really practical for us (and is in a hill area with too much wildlife for me - I can deal with most but not rattlesnakes). We were able to see if before it goes back on the market and get dibs. At the price point, I don’t think it will sell fast. So it is still in the back of our minds.

House 3 - we found out about it the day an investor bought it to flip. We are trying to make an offer before he’s done so it doesn’t even go on the market.

If you are religious, pray for us. If you’re not, please send positive thoughts and vibes into the universe.

We are staying with a friend and house sitting so there is no major rush. I just want my own bed and kitchen and for this to be over with so we can really settle down.