Oso planning to go pro
My girlfriend and her parents are down in Columbia, MO house hunting for her new job that she will start in August. We just offered $40K over asking price on a house plus agreed to let the owners stay in the house 2 months beyond the closing date and they went with a different offer. We have 3 other houses in mind and plan to make an even more aggressive offer on one tomorrow, but our agent thinks the owners are just trying to set up a bidding war on it (Zestimate is $633K, in a desirable neighborhood, they’re asking $460K so doesn’t make much sense).We’ll both be first time home owners. Any tips for offers in today’s housing market? Besides putting in a cash offer, as that isn’t an option for us right now (we can put 20% down and are pre approved for more than what we thought we’d need). Our agent definitely thought we made a good offer on the one we didn’t get today.
I would consider waiting. It's completely insane right now.
Typically, as mortgage rates move up, there's a rush of buying for people trying to get in before rates go higher ... and then the market cools some.But this market is so crazy that it's hard to know what's gonna happen. Eventually the bubble will burst, at least in some parts of the country, but when and where and how "burst-y" it'll be nobody knows.
The problem is, a lot of this is driven by hedge funds, and big money investors. They know if they control the market, they set rates and can make a profit.This is what happened in California, Toronto, and many other places first. I'm not sure this ends soon. The goal is to control the market to the point that people have to pay absurd rental prices.
Over 20% now are bought by investors/ hedge funds. Just one more instance of the ultra-rich eating America.
Advice? As I alluded in the retirement thread...buy what you need today, not what you think you need in 5 years. If you can afford a crappy 1BR 1BA house (in an OK neighborhood), buy it now. In a few years of paying it off, you can probably buy another house that will suit your needs at that time, and rent out the first at more than more than your mortgage payment.Don't get trapped into buying too much house today for the unknown future. Most people move several times - don't throw money at the "forever" house that will only last a few years.
Recently, freakonomics podcast had 2 tips for current housing searches:1. Don't use a buyer's agent.2. Write a letter to the seller describing yourself and your situation/reason for wanting the house.No idea if either would help you, but worth a shot.I can imagine paying the ridiculous prices right now. Skipping inspection? No chance I'd ever agree to that
A couple that I know is combining this thread with the retirement thread. Unfortunately, they have not been good about their retirement planning. At all. So, they're selling their home right now hoping to make a killing. The person they're working with seems to think a bidding war is possible. For their sake, I hope she's right. It's way too little and way too late, but at this point it's what they've got. I feel for the buyers out there right now, but I hope that this couple gets a good price. Because if I was in their shoes right now vis a vis retirement...I'd be terrified. Hell, even if the house sells for well over asking, I'd be terrified, but that's another issue.