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Thread: Real Estate is a Circus Right Now

  1. #1
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    Real Estate is a Circus Right Now

    Professor Dr. SWMBO and I are "more than casually" looking for our "downsize" property. The two of us do not need such a large home and property going forward as our older daughter is already living "independently" in town (she's a special needs adult, so isn't totally independent) and the younger, who is about to graduate from Penn State, is living at her boyfriend's parents' house more than half the time. So it's just the two of us and three birds most of the time in "this nest".

    The combination of low interest rates and very little inventory has created a virtual circus of the process. To-date, we've offered and lost on three properties...bidding generously and with an escalator as well as a larger deposit. We are also pre-approved for financing without selling our current property. Yet...no dice. Today's loss was to an offer that was actually less than our maximum in the escalation clause. Why? The successful bidder eschewed inspections, something we are not willing to do. We toured this house at 15:30 yesterday afternoon and our offer was in the hands of the selling agent four hours later...the only reason it took that long was our agent having one other client appointment on his way back to his office and the paperwork servers were dead slow for some reason. (it's all done electronic these days)

    We are very glad we don't have to sell first as it may be a very long time before we "score" on an attractive and appropriate situation that checks most of our boxes. Sheesh...
    --

    The most expensive tool is the one you buy "cheaply" and often...

  2. #2
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    Dec 2010
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    What's the rental market like, in your region?

    It's a good time to sell, and this can't last.

  3. #3
    Stay patient, easy for me to say. I don't even now how someone decides how to bid in these circumstances, especially when looking at a house that just came onto the market. You never know how many might be interested or what they will bid.

    Way back when we bought our house, houses were selling like hot cakes and people were bidding full price, but not over. We bid $1000 less than the offer while 2 others bid the asking price. They were FHA and we were conventional with income to get easy loan approval so they took our offer mainly because of no FHA.

  4. #4
    Itís helpful to have an agent so on the ball that he/she knows whatís coming on the market _before_ it actually does, and have the ability to swoop in with a cash offer. That avoids a hornets nest of impediments.

  5. #5
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    We decided to move 3 1/2 years ago and had a stressful process. We were buying in the same area as our vacation townhome but just needed to sell the main house first. We had been learning the vast differences around here for 5 years. I had to have an elevated house to get the garage space I wanted. Most of those are large and on the marsh or water and about $300 per sf. We found a 2700sf one on small tidal creek for less. It was for sale by owner and about 8 months before we would be ready and luckily we didn’t have a realtor yet because they weren’t going to pay a dime to a realtor. I thought it would be gone soon but their new house wasn’t ready and it was hard to get him to show it. Then it’s still on the market later and I did a flat fee listing on our house to get it on the MLS. I priced it high to leave negotiation room and in case it didn’t sell for a year or two the price needed to include appreciation since it’s not a good idea to raise the price. Got a cash contract for full price in a few hours but contingent on a school system to finish all their due diligence on their land to build a school. Luckily the guy didn’t get a better offer while we were stressing over the sale. We had to get out of our house before this one closed. Ended up selling a lot and filled up a 1000 Sf basement in the 2nd home, floor to ceiling with my shop and garage stuff. We are DIY people so we moved everything except the real heavy stuff we had it loaded on uhauls and we drove them down and had movers unload. Anything smaller than the 26ft super mover trucks are terrible for highway driving. Most stressful move of my life.

  6. #6
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    Oct 2006
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    Many homeowners don't have the means to buy a second home before their current home is sold. It is so hard to find a house to buy that people are avoiding selling their house. They are afraid of being homeless and having to find a place to store all of their stuff while they search for another house to buy.

    I look at what houses are for sale locally on occasion just for the heck of it. Most of the houses in the $200,000 to $400,000 range are listed as "active contingent" which means they are basically sold already. The suburb my parents in had one house for sale last I checked a week or two ago.

  7. #7
    Join Date
    Sep 2013
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    Wayland, MA
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    The last two houses we participated in buying (our current one and our son's) we skipped the formal inspections and purchased "as-is" with no contingencies. In a tight market it seems to convey a huge advantage, I guess enough sellers have heard about or already been burned by the buyers from you-know-where who come up with long lists of absurd demands and requests for price reductions after the initial handshake.

    Having rebuilt a couple houses and having read and studied for a number of years (at the level of reading Fine Homebuilding and Journal of Light Construction) for years, plus some accumulated common sense, I find that I can do at least as well, and often better at evaluating a house than most of the certified "inspectors" that people are hiring. (There are really great inspectors out there, and it's worth finding one; too many though just go through their checklist and don't really think about the building) Even if you don't have confidence in your own ability, there's nothing to prevent you from bringing a pro with you when you go to do the walk-through of the house prior to offer. Yes, you'll pay a bit for ones that don't work out, but it can make you a more competitive bidder. I suppose it helps that I've always been looking for houses in need of sweat equity, not a turnkey perfect property. I would never ask the departing owner to do any repairs; that's a virtual guarantee of a "lowest bidder" quality job. Instead I adjust what I'm willing to pay based on the conditions I find.

    I also simply assume that common problems will exist-- lead paint in an older house, unless there's evidence or documentation of mitigation; radon, depending on your local soil conditions; termites somewhere, you just need to find them and how extensive they are. Most houses need upgrades in air sealing and insulation. Fortunately problems with plumbing, electrical, wet basements, leaky bathroom fixtures that have resulting rot, structural issues, and roof water problems are typically self-evident, so relatively easy to account for. In MA you need to have a certified working septic to sell a house, so that's a big item off the list.

  8. #8
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    Quote Originally Posted by Doug Dawson View Post
    It’s helpful to have an agent so on the ball that he/she knows what’s coming on the market _before_ it actually does, and have the ability to swoop in with a cash offer. That avoids a hornets nest of impediments.
    We have an excellent agent. Cash offer isn't going to happen because that would cost 20+% in taxes.
    --

    The most expensive tool is the one you buy "cheaply" and often...

  9. #9
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    Quote Originally Posted by Brian Elfert View Post
    Many homeowners don't have the means to buy a second home before their current home is sold. It is so hard to find a house to buy that people are avoiding selling their house. They are afraid of being homeless and having to find a place to store all of their stuff while they search for another house to buy.
    Yes, we are fortunate to be able to do this without selling first. But even then, we are potentially needing to store stuff if the target property requires me to build a building for a shop. I could keep stuff here for some reasonable period of time, but the overlap between when we buy and when we sell isn't intended to be long-term. One we missed out on last week (nirvana...actually in-town "walkable")...would have needed a shop building, for example, and there was no covered space on the very small property to physically store tools. Rental space needed in that case. The one we lost yesterday had a shop building (24x24 which is smaller than I prefer, but workable) but still would have required storing my big tools, likely in the garage of the house with a later rental of a turf-capable fork lift or skid steer to get them "out back" to the building which had no driveway.


    I look at what houses are for sale locally on occasion just for the heck of it. Most of the houses in the $200,000 to $400,000 range are listed as "active contingent" which means they are basically sold already. The suburb my parents in had one house for sale last I checked a week or two ago.
    Stuff here goes Pending or Contingent within a day or two of listing. It sure would be nice to be able to find a $200-400K property around here, but that's just not going to happen! Sometimes, there's a property in the mid-300s that needs a ton of work, but those most often get scarfed up in cash deals to flippers. We have seen and bidding on a property at $480K plus escalator, but that sold for $510K which was above our ceiling for that offer based on the property. (would have had to build a building there and the logistics of that would have been "fun" due to the nature of access from the street)

    We are not free to relocate to a "less expensive" area because Professor Dr. SWMBO is still working and will be for a few more years and we do need to be close to our older daughter. Moving her to a different state would complicate her benefits, particularly health insurance.

    ----

    Ron, you are spot on about staying patient. It's stressful for sure, but having the comfort that we do not "have to buy a new place" helps with that. Honestly, the most disconcerting part about this is the requirement to act fast and bold...which is not something normal for use because we generally carefully consider major financial decisions. But we've at least figured out a system so that we know our boundaries. We could also very well decide to just stay here, hire help to manage the landscaping other than mowing, and just have a bunch of empty rooms.
    Last edited by Jim Becker; 02-13-2021 at 9:55 AM.
    --

    The most expensive tool is the one you buy "cheaply" and often...

  10. #10
    We own 2 mobile homes, bought the first in '09, we're renting it to some friends. The second we bought last October. But we almost didn't get it due to other offers, which I really wasn't expecting! (Ironically, both mobile homes are identical, same manufacturer, same model and size. Just minor interior differences.)

    When we got the first one I resigned myself to the fact that it was always going to be a depreciating asset. Instead, it's worth about 22% more than we paid for it.

    It iS a bit nutso in real estate land right now...
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  11. #11
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    Jim a family member is trying to buy a place here in the west region and is running into the same situation. Houses are snapped on the day they go on the market.
    Ken

  12. #12
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    Jun 2004
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    When 2x4 studs are approaching $10, building a new house is also scary, but that's what we have decided to do as we relocate nearer family. Hope to break ground in April and hope prices have begun to drop by then. On the plus side, real estate values were up over 20% here in Asheville last year and continue to rise 1% per month.

  13. #13
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    A few of our neighbors have sold there houses for more than ask, some with less than ideal layouts. Jim, is it possible to find land in your area and do a Pole Barn shop with an apartment upstairs?

  14. #14
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    Quote Originally Posted by Bryan Lisowski View Post
    A few of our neighbors have sold there houses for more than ask, some with less than ideal layouts. Jim, is it possible to find land in your area and do a Pole Barn shop with an apartment upstairs?
    Offers here always start at higher than list and with it so competitive, we have to use an escalation clause that increase the bid a grand at a time to whatever our upper max is for a given property. As noted, that didn't even work earlier this week...winner bid less than our max, but agreed to no inspections.

    Relative to your question...an acre of land here starts at 200K and there's very little available within the radius of D'town that we want/need to be in. You also add the expense of infrastructure including $25-35K for septic and whatever a well costs these days to drill. I don't believe that Professor Dr SWMBO would like a barndominum setup, either, and if that route would possible, it would more likely be a side by side rather than living quarters over. It's a nice idea, however, for the right situation.

    We're tossing another offer this weekend on an interesting situation. Cross your crossables.
    --

    The most expensive tool is the one you buy "cheaply" and often...

  15. #15
    My wife sold a condominium recently and sold it to a buyer who agreed to no inspections and no appraisal. Their offer was a bit less than one other but it offered a sale with no complications. That is, an inspector ALWAYS finds things wrong with a residence and that offers the buyer a chance to renege on the contract or attempt to re-negotiate. By the time the inspection comes in, the other bidders have moved on so you're left with the choice of negotiating or going through the selling process again.

    I suspect other sellers feel the same way. You could buy with the requirement that the seller purchase a good home warranty policy, one you approve of.

    Mike

    [Around here there are a lot of disclosure requirements when selling a home. If a known problem is "material" and not disclosed it's a reason to void the sale. One requirement I found interesting is that you must disclose if someone died in the home in the past three years (that is, physically in the home).]
    Last edited by Mike Henderson; 02-13-2021 at 9:02 PM.
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