House Buying

[BM1090]

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.

We closed on a house last month. Made an offer nearly identical to yours. 40K over asking and 2 months post occupancy. They countered our offer and two others. We threw in an escalation clause up to 10K higher and ended up getting it for 42.5 over asking.

Turns out the family who sold the house is still looking for an upgrade. They haven't found a house yet so they are going to rent it back from us for a few months for our mortgage cost + more while we stay in our condo.

[warriorchick]

We closed on a house last month. Made an offer nearly identical to yours. 40K over asking and 2 months post occupancy. They countered our offer and two others. We threw in an escalation clause up to 10K higher and ended up getting it for 42.5 over asking.

Turns out the family who sold the house is still looking for an upgrade. They haven't found a house yet so they are going to rent it back from us for a few months for our mortgage cost + more while we stay in our condo.

Risky move.

[BM1090]

Risky move.

The escalation? Or the rent back?

[Dr. Blackheart]

Cash is king and has been in Cali for quite some time. There are cash brokers out there who will pay the cash upfront for you with a quick close and then you secure your mortgage after.
https://themortgagereports.com/77830/cash-offer-with-or-without-cash

Funny thing, all cash isn't always enough. Sellers are demanding Apple RSU's being signed over.

[Lighthouse 84]

The escalation? Or the rent back?

The rent back can be. Unless you get a good possession agreement with a bunch of cash held to (a) pay for damages caused during seller's possession, and (2) be forfeited of sellers don't vacate timely. There has to be an incentive for them to get out when they say they will. Of course, there also has to be enough rent held or paid in advance to pay for the  occupancy.

[BM1090]

The rent back can be. Unless you get a good possession agreement with a bunch of cash held to (a) pay for damages caused during seller's possession, and (2) be forfeited of sellers don't vacate timely. There has to be an incentive for them to get out when they say they will. Of course, there also has to be enough rent held or paid in advance to pay for the  occupancy.

Yep. They are paying for any damages, responsible for lawn care, have a hard deadline, etc

[warriorchick]

The rent back can be. Unless you get a good possession agreement with a bunch of cash held to (a) pay for damages caused during seller's possession, and (2) be forfeited of sellers don't vacate timely. There has to be an incentive for them to get out when they say they will. Of course, there also has to be enough rent held or paid in advance to pay for the  occupancy.

Exactly. Let's hope that you don't wind up having to evict them. I have heard real estate people much smarter than me say you should never let a buyer or seller occupy property when they don't currently own it.

[Lighthouse 84]

That's why you require a huge deposit that is forfeited if they aren't out. You have to make it more affordable for them to move out than to stay.

[Scoop Snoop]

There are several references in this thread regarding market corrections coming at some time in the future. While I agree the current price escalations are simply not sustainable long term, expecting that overheated housing prices will crash as they did this past recession may be unrealistic.

Here's my reasoning: In addition to much higher prices for materials, construction wages are also much higher and likely to escalate even higher. Contractors have had great difficulty finding skilled labor and many young people today want no part of earning their living via physical labor. After the housing market crash, some construction workers left the housing industry for good. When the market is hot, there is plenty of regular work plus overtime. When the market cools, you are under or unemployed sometimes.

While home prices may decline at some point in the future, the correction will, I believe, be very modest and probably short term. I am not saying that things in general cannot fall to prices below their replacement costs but the floor for homes in the next recession is probably fairly high. Recessions typically affect people with moderate to lower incomes more than those with higher incomes.     

[wadesworld]

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.

Ended up landing the house I reference at the end of the first paragraph here. Very excited about it. We knew we'd get something nice, but it's nice to know we for sure will have a nice house.

[lostpassword]

https://www.redfin.com/WA/Bellevue/6102-115th-Pl-SE-98006/home/414079

Calling the exterior of this house ugly would be a compliment.  It's 60% garage door.

[TAMU, Knower of Ball]

Ended up landing the house I reference at the end of the first paragraph here. Very excited about it. We knew we'd get something nice, but it's nice to know we for sure will have a nice house.

Congrats Wades!

[wadesworld]

Congrats Wades!

Thank you!

[4everwarriors]

Figurin' you won't hafta make that drive down unsafe Capitol much longer, aina?

[Scoop Snoop]

Ended up landing the house I reference at the end of the first paragraph here. Very excited about it. We knew we'd get something nice, but it's nice to know we for sure will have a nice house.

Nice!

I think many here can easily relate to the feeling of buying your first house. It's slightly like your first love. If it's too much like your first love, ummm....

Congrats on your new home. I'm happy for the two of you.

[cheebs09]

Ended up landing the house I reference at the end of the first paragraph here. Very excited about it. We knew we'd get something nice, but it's nice to know we for sure will have a nice house.

Congrats! Definitely not an easy accomplishment in this day and age. Good luck with the closing process.

[wadesworld]

Nice!

I think many here can easily relate to the feeling of buying your first house. It's slightly like your first love. If it's too much like your first love, ummm....

Congrats on your new home. I'm happy for the two of you.

Congrats! Definitely not an easy accomplishment in this day and age. Good luck with the closing process.

Thank you! Definitely a relief having the accepted offer part out of the way.

[MU82]

Ended up landing the house I reference at the end of the first paragraph here. Very excited about it. We knew we'd get something nice, but it's nice to know we for sure will have a nice house.

That's fantastic, wades. Very happy for you.

[wadesworld]

That's fantastic, wades. Very happy for you.

Thank you!

[Dr. Blackheart]

Ended up landing the house I reference at the end of the first paragraph here. Very excited about it. We knew we'd get something nice, but it's nice to know we for sure will have a nice house.

Congrats!

[wadesworld]

Congrats!

Thank you!

[MU82]

Calling the exterior of this house ugly would be a compliment.  It's 60% garage door.

Yep ... and it coulda been yours for only a little more than a quarter-mil over list!

[Lennys Tap]

Ended up landing the house I reference at the end of the first paragraph here. Very excited about it. We knew we'd get something nice, but it's nice to know we for sure will have a nice house.

Congratulations!

You'll never forget your first house. Hope you both fill it with happiness and fond memories.

[wadesworld]

Congratulations!

You'll never forget your first house. Hope you both fill it with happiness and fond memories.

Thank you! We're looking forward to it.

[Goose]

Wades

Congrats!!