Post # 1
Fiance and I are in the process of buying a house (townhouse/condo). We put an offer on a townhouse that had been on the market 3 days, with 20% down, and $7k over list price. Last night (5 days on the market), we found out that there were 13 offers so far, some $30k over list with 50% down and no appraisal contingency. This is so frustrating. We’re starting to see properties we looked at a couple months ago in our price range back on the market $100k higher. It’s so frustrating when the investors buy up all the properties that we can actually afford, and then flip them and sell them out of our price range. We’re in the LA area…
Is anyone else dealing with this?
Post # 3
@mrscali13: Kind of, my family is on the other side of this (my mom purchases rental properties, she’s in orange county). Unfortunately, when the price goes down, everyone wants to buy. You just have to keep at it and eventually you will find your perfect home. Best of luck!
Post # 4
- Wedding: May 2014 - Paradise Gardens
@mrscali13: AhhH it sounds like the market situation in California right now! Very VERY frustrating, but just keep your head up –act quickly, but not hastily and know that your property is out there. And when you find it it will all just feel right. Also you might want to look into forclosed properties.
Post # 5
Yep. I live in the Bay Area and it was the exact same for us in November. We had 20% down, 7% over asking, put in an offer on 2nd day of listing, and there were 10 offers, 3 of which were all cash. The only reason we got it was that the all-cash buyer that bid the highest backed out.
Every home we tried to buy before that was the same story. 10+ offers, with the all-cash investors beating everyone out.
Low inventory and record low interest rates = feeding frenzy.
Post # 6
wow… I’m going to be selling my home soon (in Wisconsin, moving for a different job), and I feel like I’ll be lucky IF it sells within a couple months and close to the asking price… We are looking to lose a lot of money, even though we’ve put nearly 20k into it in the last year. Sigh…
Post # 7
I saw this on a homebuying show and depending on the seller may be helpful. The realtor on the show recommended writing a letter to include with your offer that would allow the seller to connect with you and show that you would take good care of the home. ie: we’re an engaged couple/newly married and think this would be the perfect home to start our lives/family/ etc together. blah, blah, blah…It wouldn’t work in all cases, but some sellers would appreciate this and rather sell to a real couple rather than an investor that will be turning the house for profit/flipping, etc. It also may not work if the property is bank owned, but could be worth a shot and might set you apart from some of the other potential buyers and could give your offer an edge.
Post # 8
@petru003: We did that.
There is no amount of “connection” that competes with an all-cash offer 10+% over asking on homes in the $500-800k range. Nobody cares. It’s a business transaction, and a TON of money. We had literally backpacked through the rural Chinese hometown of the first 2 sellers homes we wanted to buy. Talked to them for an hour at the open house.
DID NOT MATTER.
All cash buyers win, almost always. Nobody volunteers to deal with a bank for 30-45 extra days, with the chance that the deal may fall through, if they can take a high all-cash offer and ride off into the sunset. No matter how cool the buyers are.
Post # 9
- Wedding: October 2011 - Bed & Breakfast
I’m sorry. That just plain sucks. 🙁
I will second a PP in that a letter definitely helped us in our multiple offer situation. But our situation only involved 4 offers in the first 7 days on the market. I can’t imagine our letter being that helpful with 13 offers and so much extra money on the table and no appraisal contingencies. BUT it doesn’t hurt to try, right?
It can be an extremely frustrating process. It took us 18 months to find the right one. 18 very long months. You just have to keep trying. Try to be as emotionally detached from the process as you can. When you get to the “this is business” mindset it makes it much easier to move on from the latest blow.
Post # 10
@petru003: We wrote the letter, too, on both properties we’ve put offers on so far. We thought we actually had a good chance with this one, because the seller showed us the property herself, and was wearing a polo with the logo of the business school my Fiance is going to this fall, and we talked a lot about that. And not to toot my own horn, but our letter was pretty awesome. It’s just so frustrating… ugh!
Post # 11
@mrscali13: I so feel you, 1000%. You’ll find a place, though! It’ll happen!! 🙂
Post # 12
totally ridiculous to buy right now!….. we are (hopefully) getting our place for a bit under asking (but they priced a bit too high so we are really paying normal market rate)- just did our inspection today and it seems all good but until its over I know that anything can go wrong….
for us everything was all good till we were signing the contract & putting down deposit then all of a sudden they need to rent back for a month, then 45 days then the closing needs to be moved up etc….
we decided to go for it even though most people told us its a potentially bad situation (if the owners don’t move out or cause damage post-closing then we will have to go to court & sue them etc which could be months and thousands of dollars) just because we really liked the place plus there is nothing else we would even consider on the market, renting is just as expensive and we have to move anyways (our current landlord is selling) so it makes sense for us.
my sister got a crazy deal like that too — they put in offer and bc of letter the owners gave them chance to counter but $55,000 over list (which is about 15% ish), no negotiations after inspection and if it doesn’t appraise for value you have to pay rest in cash!!!!
made my deal seem reasonable!
Post # 13
@mrscali13: I’m a Realtor in the Sacramento area and this market is definitely frustrating for many of my buyers! It sounds like you’re doing everything right with the love letter – if you meet the seller, I would include a picture of the two of you with the letter so they can put a face to the name. Also, it helps if you pay all of your closing costs & you can offer to pay a portion of the seller’s closing costs as a bonus. All of these things will help your offer stand out against the rest.
I just got one of my buyers into contract with a property that had over 60 offers on it!! They had to offer close to 20k over list price. I’ve been working with them since the beginning of January & we’ve written about 10 offers total. Keep at it & you will eventually get one accepted. Try not to fall in love with the house (I know this is hard) because it will be an emotional roller coaster, especially in this market.
You may also want to check into HUD properties (HUDhomestore.com) & FannieMae HomePath properties – they usually require a little more work (not all the time) but the nice thing is that they only allow owner occuppied offers for the first 30 days so at least you’re not competing with the investor all cash offers. You can usually get special financing for repairs with these homes as well..
Post # 14
We live in KY but went through the same thing! To get a house in the areas we wanted we had to buy a HUD/foreclosure/estate home. It seemed like it would be impossible because everyone had 100% cash and were willing to pay over asking. I was very frustrated and we started looking at homes a little out of our budget. But luckily we had a great realtor who kept us grounded and told us not to buy homes that she knew wouldnt be right for us. We were patient and we finally got an estate home for a VERY good price, and it absolutely perfect for us! We got this home because there was outdated finishes that turned off buyers, but everything was constructed so well that it didnt take much to update it.
You will find one when the right house is there! Usually it will happen right after you get to the point where you want to quit. Just keep your head up, when it is meant to be you will get a great home!
Post # 15
I totally feel you. We are facing the same. I wish they would add a huge surcharge or tax to non resident property investors since so many of them then let the properties sit empty or don’t take care of the places.
Post # 16
- Wedding: May 2014 - Paradise Gardens
@crayfish: +1 on the letter thing. I also saw on the news, some people are including pictures which is a little too personal and intrusive for me.
But my best advise is forclosures from Freddie Mac OR Fannie Mea… much less competition and that’s the way we landed our home in Cali.